Detailed calculation process of actual contribution index and pension for 29 years of contributions

1. Calculation of the actual contribution index

For the vast majority of people, the most important and difficult parameter when calculating retirement pensions is probably the actual contribution index.

But in fact, the mathematical knowledge used in the calculation of this actual contribution index is very simple: just use division, multiplication, addition, division in elementary school arithmetic, but it is a little troublesome. But it is also easy for those who want to pursue details.

As for my actual contribution base over the years and the local average monthly salary of the previous year, they can be found on the local social communication website. Of course, going to the counter of the local social security bureau can also obtain more credible data.

The following retiree is an example, he retired as an enterprise employee in a city in Shandong Province, and began to pay contributions in 1993, and by January 2022, he had paid contributions for nearly 29 years (with 8 months in between).

Steps to calculate the actual contribution index:

1. Divide my "monthly contribution base" by "average monthly salary of the previous year" to calculate the actual contribution "index" of each month:

Actual monthly contribution index for 1993 = 149.17÷213.67

≈0.698133≈0.698

Actual monthly contribution index for 1994 = 166.33÷262.33

≈0.634049≈0.634

Actual monthly contribution index for 1995 = 192÷366.67

≈0.523632≈0.524

Actual monthly contribution index for 1996 = 270.67÷422.92

≈0.640003≈0.64

Actual monthly contribution index for 1997 = 322.83÷466.92

≈0.691403≈0.691

Actual monthly contribution index for 1998 = 303.35÷505.58

≈0.600004≈0.6

Actual monthly contribution index for 1999 = 320.35÷533.92

≈0.599996≈0.6

Actual monthly contribution index for 2000 = 360÷588.67

≈0.611548≈0.612

Actual monthly contribution index for 2001 = 402÷669.92

≈0.600072≈0.6

Actual monthly contribution index for 2002 = 468÷779.75

≈0.600192≈0.6

Actual monthly contribution index for 2003 = 545÷907.92

≈0.600273≈0.6

Actual monthly contribution index for 2004 = 612.71÷1021.17

≈0.600008≈0.6

Actual monthly contribution index for 2005 = 718÷1196.83

≈0.599918≈0.6

Actual monthly contribution index for 2006 = 840÷1400.08

≈0.599966≈0.6

Actual monthly contribution index for 2007 = 962÷1602.33

≈0.600376≈0.6

Actual monthly contribution index for 2008 = 1142÷1904

≈0.59979≈0.6

Actual monthly contribution index for 2009 = 1320÷2200.33

≈0.59991≈0.6

Actual monthly contribution index for 2010 = 1484÷2474

≈0.599838≈0.6

Actual monthly contribution index for 2011 = 1618÷2810.75

≈0.575647≈0.576

Actual monthly contribution index for 2012 = 1900÷3166

≈0.600126≈0.6

Actual monthly contribution index for 2013 = 2129÷3547.67

≈0.600112≈0.6

Actual monthly contribution index for 2014 = 2383÷3971

≈0.600101≈0.6

Actual monthly contribution index for 2015 = 2623÷4371.67

≈0.6≈0.6

Actual monthly contribution index for 2016 = 2910÷4849.75

≈0.600031≈0.6

Actual monthly contribution index for 2017 = 3178÷5296.83

≈0.599981≈0.6

Actual monthly contribution index for 2018 = 3465÷5775.42

≈0.599956≈0.6

Actual monthly contribution index for 2019 = 3269÷5448.58

≈0.599973≈0.6

Actual monthly contribution index for 2020 = 3269÷5761.33

≈0.567404≈0.567

Actual monthly contribution index for 2021 = 3746÷6242.17

≈0.600112≈0.6

2. Use the actual payment "index" of each month mentioned above and multiply it by the number of payment months in the current year to calculate the actual payment cumulative index of each year:

Cumulative index of actual contributions for 1993

=0.698×12=8.376

Cumulative index of actual contributions for 1994

=0.634×12=7.608

Cumulative index of actual contributions for 1995

=0.524×12=6.288

Cumulative index of actual contributions for 1996

=0.64×12=7.68

Cumulative index of actual contributions for 1997

=0.691×12=8.292

Cumulative index of actual contributions for 1998

=0.6×12=7.2

Cumulative index of actual contributions for 1999

=0.6×12=7.2

Cumulative index of actual contributions for 2000

=0.612×12=7.344

Cumulative index of actual contributions for 2001

=0.6×12=7.2

Cumulative index of actual contributions for 2002

=0.6×12=7.2

Cumulative index of actual contributions for 2003

=0.6×12=7.2

Cumulative index of actual contributions for 2004

=0.6×12=7.2

Cumulative index of actual contributions for 2005

=0.6×12=7.2

Cumulative index of actual contributions for 2006

=0.6×12=7.2

Cumulative index of actual contributions for 2007

=0.6×12=7.2

Cumulative index of actual contributions for 2008

=0.6×12=7.2

Cumulative index of actual contributions for 2009

=0.6×12=7.2

Cumulative index of actual contributions for 2010

=0.6×12=7.2

Cumulative index of actual contributions for 2011

=0.576×12=6.912

Cumulative index of actual contributions for 2012

=0.6×12=7.2

Cumulative index of actual contributions for 2013

=0.6×12=7.2

Cumulative index of actual contributions for 2014

=0.6×12=7.2

Cumulative index of actual contributions for 2015

=0.6×12=7.2

Cumulative index of actual contributions for 2016

=0.6×12=7.2

Cumulative index of actual contributions for 2017

=0.6×4=2.4

Cumulative index of actual contributions for 2018

=0.6×12=7.2

Cumulative index of actual contributions for 2019

=0.6×12=7.2

Cumulative index of actual contributions for 2020

=0.567×12=6.804

Actual contribution accumulation index for 2021

=0.6×12=7.2

3. Add up the cumulative index of actual contributions for each year:

Cumulative index of actual contributions over the years and =

8.376+7.608+6.288+7.68+8.292+7.344+6.912+2.4+6.804+7.2×20

=205.704

Here, the annual minimum contribution accumulation index is the same as 7.2, calculated by multiplication.

4. Sum the actual number of payment months in the calendar year:

The actual number of months paid over the calendar year and

=12×28+4

=336+4

= 340 months

5. My actual payment index

= Cumulative index of actual payment in the calendar year and sum of the actual payment months in the ÷ calendar year

=205.704÷340

≈0.605011765

≈0.605

This detailed calculation process and results are exactly the same as the actual values in the table.

I have listed every value in the calculation process here, just to make it convenient for friends who are willing to verify the calculation and comparison.

2. Calculation of retirees' pensions

With the key actual contribution index above, the process of calculating pensions is much simpler, and there are too many examples online. I will simply list the equations here and will not explain them in detail.

1. Basic pension

= Calculation base× (1 + actual contribution index) ÷2× total number of years of payment × annual payment ratio

=6893×(1+0.605)÷2×29.58×1%

=6893×0.8025×29.58×1%

≈1636.25689

≈ 1636.26 yuan

2. Personal account pension

= Accumulated amount of personal account ÷ number of months of payment

=64196.48÷195

≈329.2127

≈ 329.21 yuan.

3. Transitional pension

= Calculation base× deemed contribution index (actual contribution index)× deemed payment period × transition factor

=6893×0.605×4.25×1.3%

≈230.4071

≈ $230.41.

4. Local subsidy: 33 yuan

5. Total monthly basic pension

= basic pension + personal account pension + transitional pension + local subsidies

=1636.26+329.21+230.41+33

=2228.88 yuan.

It needs to be explained that the above calculation is because the retiree calculated this retirement pension in January 2022, when the base of payment in Shandong Province in 2022 had not yet been announced, so the base of 6893 yuan in 2021 was temporarily used.

After the calculation base of Shandong Province is announced as 7182.5 in 2022, her basic pension can be increased by 78.39 yuan. Please interested friends, substitute 7182.5 into the formula of basic pension and transitional pension, verify it?

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