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As the only source of income for retirees, the importance of pension is self-evident. Pension reform is also particularly important for everyone who receives a pension. This year is a key year for the reform of the mainland's pension system.
What many people don't know is that the mainland pension is currently being transferred from a dual-track system to a single-track system, and it has lasted for more than 30 years. So, why should the pension be changed to a single-track system, and which people will benefit from its changes?
1. Single-track pension
According to the original plan, from October 1, 2024, the dual-track pension will become a thing of the past, after which it will be replaced by the single-track pension. With the official implementation of the single-track pension system, it will also be fairer in the payment of pensions.
Before that, we first need to understand what a dual-track pension is and what is the difference between it and a single-track pension. In 1992, the mainland began to implement a dual-track pension system, dividing retirees into two types, thus widening the gap between the two.
In the dual-track pension system, retirees are divided into two types according to their status. One is the retirees of government agencies, and the other is the retirees of enterprises. Under the dual-track pension system, there is a big difference in pension treatment between the two types of retirees.
The pension of retirees of government agencies and units shall be borne by the state treasury in its entirety, and the amount of pension shall be 80 per cent of the salary at the time of retirement. However, the difference is for corporate retirees, whose pension payments need to be calculated. It is important to consider not only the proportion of social security contributions, but also other factors.
Because each insured person is slightly different, there will be a big gap in the payment of pensions. Even employees in the same department have different pensions after retirement. Compared with the retirees of government agencies, their pensions are much less.
Because of this, the state has also noticed the disadvantages of the dual-track pension system. If it continues, it will affect people's motivation to work. Since 2014, the mainland has officially entered the transition stage of single-track pensions.
Up to now, the transition phase of the single-track pension has been carried out for 10 years, and the single-track pension will be fully implemented from October 1 this year. After that, whether it is a retiree of government agencies or enterprises, pensions will be paid in a unified manner.
But this also leads to a question, that is, what are the benefits of the single-track pension? The most obvious and direct is that the single-track pension reduces the gap between the two sides. This is also the main reason for the implementation of the single-track pension system.
Secondly, there are many people who work in government agencies, and some of them are not cadres. Do the same job, but retire without the same pension. This is also the key to the implementation of a single-track pension system, so as to improve work motivation.
On the other hand, under the dual-track pension system, the pensions of retirees in government agencies are rising every year, and they have been raised 19 times in a row so far. Although there have been adjustments in the number of retirees in enterprises, there are not as many retirees as in government agencies.
For this reason, many young people are now squeezing their heads into the system, in fact, they are taking a fancy to the advantages of government agencies and units after retirement. If it continues for a long time, the social labor force will be greatly reduced, and the impact will be huge.
So, after the implementation of the single-track pension system, who can directly benefit from it, and which part of the people will be affected? This should be analyzed from the way of adjustment of the mainland's pension, and different situations will also affect the amount of pension.
2. Pension adjustment
As we all know, the mainland pension will be adjusted once a year, and it has been adjusted for 19 consecutive years, and it is an upward adjustment. This also means that the social security fund has always been in a profitable state, ensuring that the pension can be paid normally.
However, apart from the annual adjustment of pensions, which can affect the distribution of pensions, what else can directly affect pensions? This is to mention the three ways implemented by the mainland in the adjustment of pensions, so as to make the distribution of pensions more fair.
China has a huge land area, which also makes the development of different regions also have a big gap. As an inclusive policy, pension should also take into account the impact of the region. To this end, the state has introduced three adjustment methods.
The first is the overall adjustment, which is the basis of pension adjustment. The overall adjustment is based on the balance of the social security fund, and the pension of all retirees is uniformly adjusted. It is characterized by inclusiveness, and everyone is within the scope of its radiation.
However, there is also a disadvantage of the overall adjustment, that is, the pension of retirees will also be magnified under the overall adjustment. For example, if the overall adjustment is increased by 5%, then the monthly pension of 10,000 yuan will rise by 5,000 yuan.
But for a monthly pension of only 5,000 yuan, his pension will only rise by 250 yuan, and there will be a double gap in the middle. Therefore, in addition to overall adjustment, the mainland also has two other ways of adjusting in order to achieve the goal of equilibrium.
The second adjustment method is the linked adjustment, which is also an adjustment mode for the future of the single-track pension. In the payment of pensions, enterprise retirees often need to take into account the proportion of social security contributions, their own working years and other conditions.
The linkage adjustment is to calculate the length of service of enterprise retirees into the pension payment, and different working years will also make the proportion of pension payment different. In fact, this is also in accordance with the principle of long-term payment of social security, and more pensions can be received for more than 15 years.
Although the linkage adjustment makes up for the shortage between enterprise retirees and government retirees, there will still be a gap between pensions due to geographical problems. In this case, a third adjustment method comes into being.
The third adjustment method is tilt adjustment, which is also the most special of the three adjustment methods, and is aimed at a specific group of people. Because of the different economic development of various regions of the mainland, people's income levels are also very different, and pensions are therefore more or less.
In order to allow retirees in areas with slower economic development to receive more pensions, the tilt adjustment will make special adjustments for this group of people. This will also reduce the gap between different regions and improve the living conditions of retirees.
In addition to the regional tilt, elderly retirees and retirees with physical illnesses are also within the scope of tilt adjustment. To put it bluntly, the tilt adjustment is to help retirees who are struggling with their lives.
3. Who will benefit from this
It can be seen that under the single-track pension system, different adjustment methods will also gradually improve the treatment of retirees. In the future, after the full implementation of the single-track pension system, the original geographical gap and identity gap will become a thing of the past.
After the reform of the pension system, there will naturally be a part of the people who will benefit, who are these people? What will happen to their lives? This is actually easy to get the answer, corporate retirees will be the direct beneficiaries.
After all, according to the previous dual-track pension system, the pension of enterprise retirees is less than that of government agency retirees. However, the implementation of the single-track pension system also needs to take into account the problems in its implementation process, and the beneficiaries will also change.
For young people who have just joined the workforce, the implementation of a single-track pension can be said to have little or no impact on them. After all, they have not experienced a dual-track pension system, nor do they know how big the gap between the two is.
It can also be said that the implementation of the single-track pension system has a direct impact on the new participants, bringing them a new pension model. As long as you pay social security according to the single-track pension system, you can enjoy the pension payment equally after retirement.
There will be no gap between government agencies and enterprises. However, for those who choose to take the public capital examination with the high pension treatment of government agencies, this reform will also affect them, and the psychological gap will be more obvious.
The other part of the people who will benefit from this is the retired corporate retirees. They have experienced the unfair stage of the dual-track pension system, and naturally hope that the single-track pension will be implemented as soon as possible. And after the implementation, their pensions will also be adjusted.
However, for retirees who have retired from government agencies, the implementation of the single-track pension system will make them face a decline in their benefits. In particular, those who would otherwise enjoy high retirement benefits will be most directly affected.
Although there will be corresponding adjustments in the future, the pension in the end will be less than the dual-track pension. For this reason, there are beneficiaries among retirees, and naturally there are people who are affected by this, resulting in a reduction in pensions.
In addition to these two, there is even more concern for the "middle people", who are caught between the new working and the retired. This group of people has now paid social security for a long time, and some are facing retirement, and the single-track pension will directly affect them.
However, with the official implementation of the single-track pension system on October 1 this year, the concept of "Chinese people" will also disappear. In the past 10 years, the "middle people" are in a transitional stage, and some "middle people" have also retired during this period.
However, in the future, the implementation of the single-track pension system will make the "middle-aged" who have not yet retired face a new problem, that is, the pension treatment will be reduced. While these effects will be present, they are necessary sacrifices for pension reform.
epilogue
In the implementation of the single-track pension system, the decline in treatment is the most critical issue, and it is also a problem that cannot be ignored. However, the reform of the single-track pension system is holistic in nature. It's not for a specific field, let alone a specific group of people.
Therefore, in the process of reform, it is inevitable that there will be a decline in treatment. From an all-round perspective, the benefits of single-track pension reform outweigh the disadvantages. Therefore, there will be a 10-year transition period, which is to make the single-track pension system successfully implemented.
Sources of information:
Decision of the State Council on the Reform of the Pension Insurance System for Employees of Government Institutions and Institutions _Social Security_Chinese Government Network January 14, 2015
https://www.gov.cn/zhengce/content/2015-01/14/content_9394.htm