Recently, the topic of "pension merger" has rushed to the hot search of major online platforms, and has become one of the hot topics among the insured personnel of enterprises and institutions and even the whole people. So, what exactly is the "pension merger"? After the end of the 10-year transition period of the "pension merger," will the pensions of retirees of government organs and institutions shrink by a large margin? This article will focus on these issues in detail.
What is the consolidation of pension systems?
The so-called pension system merger, as the name implies, refers to the abolition of the pension "dual-track system", the government institutions, institutions and enterprise retirees jointly implement a unified basic pension insurance system that combines social pooling and personal accounts.
As we all know, before the reform of the basic pension insurance system in 2014, there were two sets of basic pension insurance systems in parallel within the system and outside the system. There is a big difference between the two in terms of who they can participate in, how they pay and how much they will receive after retirement.
(1) Payment object:
The participants of the basic old-age insurance system of government organs and institutions are civil servants and personnel of public institutions within the establishment, while the basic old-age insurance for employees of enterprises is the employees of enterprises.
(2) Payment method:
The personnel of the organs and institutions in the system do not need to bear the basic pension insurance costs, and the financial units will issue pension benefits after retirement; while the basic pension insurance costs for enterprise employees are jointly borne by the employer and the employees themselves, of which the pension insurance costs borne by the enterprise are included in the overall fund, and the part of the individual insurance contributions is included in the personal account, and the basic pension insurance benefits are received on a monthly basis after the retirement of the employees of the enterprise, and the source of funds is mainly the basic pension insurance fund for enterprise employees.
(3) Level:
Before the merger of the pension system, the formula for calculating and issuing the pension benefits of retirees in government institutions and institutions is: (the initial amount of basic retirement allowance + retirement subsidy + the standard of retirement allowance increased by retirees during the reform) x the growth rate of the old method of treatment, that is, the level of pension benefits is related to the level of professional titles and the level of wages before retirement, and the replacement rate of pensions can reach up to 90%; However, the sum of the three monthly per capita basic pension level was once only one-third of the basic pension level of retirees in government institutions and institutions, and the level of pension treatment under different systems is very different.
Obviously, the basic old-age insurance system of the dual-track system has aroused strong dissatisfaction from all walks of life, especially the employees of enterprises, and many employees of enterprises with relatively high payment bases are still inferior to the retirees in the system after retirement, and the personnel of government institutions do not need to bear the cost of old-age insurance.
Therefore, in this context, the call for the abolition of the dual-track pension system is getting higher and higher, and the state issued the "Decision on the Reform of the Pension Insurance System for Employees of Government Institutions and Institutions" in 2015, which clarifies that since October 1, 2014, the basic pension insurance payment method of government institutions and the calculation and distribution method of basic pension insurance benefits have been reformed. After the reform, the personnel of government institutions and enterprises jointly implement the basic old-age insurance system for urban workers, and this reform measure is called "pension merger", and the basic old-age insurance model of the dual-track system officially withdrew from the historical stage.
Pension merger "10-year transition period"
According to the reform objectives and basic principles of the "Decision on the Reform of the Pension Insurance System for Employees of Organs and Institutions", in order to ensure the smooth transition of the basic pension insurance benefits of retirees in government institutions before and after the reform, the state has set up a 10-year transition period (October 1, 2014 ~ September 30, 2024) for those who participated in the work before the reform and retired after the reform (i.e., retired people) to maintain the level of benefits. In addition, according to the different time nodes of work and retirement, the state divides retirees in the system into three types, namely, retired elderly, retired and retired.
(1) Retired "elderly": that is, retirees in the system who have retired and receive monthly pension benefits before the merger of the pension system, their pensions are still calculated and paid according to the old method, and enjoy the normal adjustment of the follow-up basic pension;
Calculation and payment method: pension in the old method = (initial amount of basic retirement allowance + retirement subsidy + retirement fee standard increased by retirees during the reform) x growth rate of calculation and payment of benefits in the old method
(2) Retired "newcomers": that is, the pension system after the merger of the system, the pension treatment after retirement will be calculated and paid in accordance with the new method, the high payment base, the long payment period, the pension level will be higher;
Calculation and issuance method:
Basic pension = (the average monthly salary of the province's on-the-job employees in the previous year at the time of retirement of the insured person + the average indexed monthly salary of the insured person) ÷2× payment period ×1%
Personal account pension = the cumulative amount of savings in the personal account of the basic pension insurance at the time of retirement ÷ the number of months in the personal account corresponding to the retirement age
(3) Retired "middle people": that is, those who participated in the work before the merger of the pension system and retired after the reform, their pensions will adopt the transitional measures of "keeping the low and the high" to maintain the level of treatment.
Calculation and issuance method:
If the standard of treatment under the new method is lower than that of the old method, the treatment will be calculated and paid according to the old method, and if the standard of treatment under the new method is higher than that of the old method, the excess part will be paid according to a certain proportion every year.
Taking Hebei as an example, referring to the "Measures for the Calculation and Payment of Basic Pensions for Employees of Hebei Provincial Organs and Institutions", if the treatment standard of the new measures is higher than the old measures, the personnel who retired on October 1, 2014 ~ December 31, 2015 will be paid 10% of the excess, and those who retired on January 1, 2016 ~ December 31, 2016 will be paid 20% of the excess...... By analogy, those who retire between January 1, 2024 and September 30, 2024 will be paid 100% of the excess. After October 1, 2024, the comparison calculation of the old and new methods will no longer be implemented, and the basic pension will only be calculated and paid according to the new methods.
After the end of the transition period, will the pension benefits of retirees of government agencies and institutions be greatly reduced?
The question is, from October 1, 2024, after the end of the 10-year transition period of pension merger, retirees of government agencies and institutions will be paid pensions according to the new measures, so will their treatment level shrink significantly?
Let's start with the conclusion: there will be no significant reduction, and the end of the 10-year transition period of pension merger does not mean that the level of basic pension treatment for retirees in the system will drop significantly. On the contrary, according to the new method of calculating and paying pensions, it is still possible to maintain a certain advantage over the pension level of retirees in the system compared with retired workers of enterprises.
The following is a concrete example to support this conclusion.
Suppose that the insured personnel of a government institution have a cumulative insurance payment period (including 26 years of deemed payment period and 9 years of actual payment period) of 35 years, the actual average payment index is 1.8, the deemed average payment index is 1.5, and the retirement age is 60 years old. In order to facilitate the calculation and comparison, we assume that the salary level of the insured personnel in the system in September 2014 is 3,200 yuan/month, and the calculation base of the local basic pension insurance benefits in 2023 is 7,468 yuan/month. So according to this, we calculate the basic pension benefits according to the old method, the new method and the comparison of the old and new methods.
According to the calculation and distribution method mentioned above, the old method pension = (3200 * 90% + 3380 + 460 + 40) * 1.27 = 8585.2 yuan / month. Among them, the retirement subsidy standard is 3,380 yuan, the retirement allowance is 460 yuan, and the salary scale subsidy issued by the wage reform in 2006 is 40 yuan, and the wage growth rate is 1.27.
The new method pension = 8959.37 yuan / month, of which, the basic pension = 7468 * (1 + 1.577) / 2 * 35 * 1%; the personal account pension is roughly calculated as 7468 * 8% * 12 * 35 / 139; transitional pension = 7468 * 26 * 1.5 * 1.3%. Assuming that the insured personnel of the institution retire in October 2023, the excess part of the new and old measures will be issued according to the proportion of 90%, that is, the actual pension is 8921.95 yuan / month. Therefore, the pension level of retirees in the system during the 10-year transition period of pension merger will not be significantly reduced, and the pension level of retirees who will be calculated and paid according to the new measures after October 1, 2024 will not shrink significantly. Of course, the specific amount you can receive depends on factors such as the payment base and the payment period.
epilogue
In general, after the end of the 10-year transition period of pension merger in 2024, the pension will be calculated and paid according to the new method, and its treatment level can still maintain a certain advantage compared with enterprise retirees, and the reason for this phenomenon is that the payment base of the insured personnel in the system is generally high, and on the other hand, there are occupational pension benefits as an effective supplement, so the pension treatment of retirees in the system will often remain at a high level even if it is calculated and paid according to the new measures. If the insured employees of the enterprise want to narrow the gap with the personnel of government agencies and institutions, then the best way is to increase the payment base and extend the payment period, and at the same time try to participate in the social security while making savings planning in advance, so as to lay the foundation for enjoying the old age and providing for the elderly.
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