At the end of 2022, the number of retirees in mainland China reached 136.44 million, a net increase of 4.87 million over the previous year. On the basis of the growth trend of retirees, this net growth rate is expected to continue for many years to come. At least half of retirees are men (men are more likely to be more involved). When these retirees calculate their pensions, they will find a pension number 139. Where did this number come about?
In 2005, the State Council promulgated the "Decision on Improving the Basic Pension Insurance System for Enterprise Employees", which stipulated a new formula for calculating the basic pension and personal account pension. Among them, the personal account pension is equal to the balance of the personal account of the pension insurance at the time of retirement ÷ the number of months determined by the retirement age. Among them, 139 is the number of months of retirement at the age of 60.
The commonly used number of months is 195 months at the age of 50 and 170 months at the age of 55. In fact, the retirement age system in the mainland is very complicated, and it is not necessarily 50, 55 and 60 years old. In fact, there are 31 months of pension payment from 40 to 70 years old. 40 years old is 233 months, and 70 years old is 56 months. If it is less than 40 years old, it will be counted as 40 years old, and if it is higher than 70 years old, it will be counted as 70 years old.
How did the number 139 come from?
The number of months of pension is calculated mathematically on the basis of certain principles.
The premise of the number of months of pension personal account is as: (1) calculated based on the future personal account accounting interest rate of 4%, (2) the average life expectancy of retirees is 75 years old, and (3) the monthly personal account pension remains unchanged. When people reach their average life expectancy, they have their personal account balances fully withdrawn. In this case, it is almost equivalent to breaking even. For details, you can take a look at the following figure:
But in practice, the above assumptions are not in line with the reality of our current pension. There are several reasons for this:
First, the balance of the pension insurance personal account can be inherited after death and will not be left to the pooled fund. Therefore, there is no question of breaking even with average life expectancy.
Second, life expectancy is rising. The age of 75 is actually taken from the average life expectancy published by the state in 2000, and refers to the life expectancy of the urban population. Later, the state no longer distinguished between urban and rural areas. According to the figures published in the National Statistical Yearbook, it has actually reached 77.93 years in 2020.
There is no distinction between men and women in the calculation of pensions, but the difference in life expectancy between men and women is significant. In addition, the life expectancy of women is actually much higher than that of men, with a life expectancy of 80.88 years in 2020, which is 5.51 years higher than that of men.
Thirdly, personal account pensions are actually growing every year. Since 2005, the state has established a normal adjustment mechanism for basic pensions, and in accordance with the deduction method for national personal account pensions, the deduction amount of personal account pensions is fixed in the ratio of their basic pensions. For example, the retirement pension is 3,000 yuan, and the personal account pension is 900 yuan. In the future, the pension will rise to 5,000 yuan, and the monthly deduction amount for personal accounts will also increase to 1,500 yuan.
After the balance of the personal account is deducted, the pension of the personal account will be paid by the pooled fund, so there is no need to worry about the reduction of retirement benefits.
Fourth, since 2016, the bookkeeping interest rate of personal accounts has been higher than 4% for many years. In 2016, the accounting interest rate was as high as 8.31%, and it has been above 6% until 2022, and only 3.97% in 2023. In fact, in principle, the bookkeeping interest rate is high, and the number of months should be small.
To be honest, the system of calculating the number of months in the personal account of pension insurance has not changed in the past 20 years, and it is indeed unreasonable. The 14th Five-Year Plan for the Development of Human Resources and Social Security clearly states that it is necessary to revise and improve the number of months of personal account issuance, which is relatively fairer to dynamically adjust. According to the current life expectancy and accounting interest rate, there is a high probability that the number of months will increase. #养老金知识小百科#