How much difference can there be in pensions for 39 years and 40 years of servic
In the past, those with more than 35 years of service used to receive 90% of their basic salary as a standard, plus a certain retirement subsidy. Therefore, some elderly people might still think that the pension for more than 35 years of service is the same.
In fact, with the implementation of the pension insurance system in our country, coupled with continuous improvement over the years, the pension mainly reflects a series of principles such as "more contributions, more benefits" and "longer contributions, more benefits." The longer the contribution period, the higher the pension will be.
A friend asked, how much difference in pension can there be between 39 years and 40 years of service?
Actually, according to the current pension calculation formula, the difference in years of service is crucial.
The pension calculation formula generally includes three parts: basic pension, personal account pension, and transitional pension.
Advertisement
In recent years, the pension generated from participating in the pension insurance mainly consists of two parts: basic pension and personal account pension. The pension generated from the contribution period before the establishment of the pension insurance personal account system (mostly before January 1996) and the deemed contribution period mainly consists of basic pension and transitional pension.
Generally speaking, for those with 39 or 40 years of service, there is rarely an interruption later on. In this case, it might be the difference in the time of joining the workforce. Based on the time推算, it should be a one-year difference in service from 1984 to 1985.
Our country's pension insurance system was implemented for new employees starting in October 1986, and later in 1992, pension insurance contributions were implemented for all employees. Therefore, the difference in one year of service should be considered as the deemed contribution period.
① Basic pension = Average social salary of the year before retirement × (1 + average contribution index of the individual) ÷ 2 × contribution period × 1%.The social average wage of the previous year, also known as the pension calculation base in many places, ranges from 6,401 yuan to 12,183 yuan for the pension calculation base and social average wage across the 31 provinces in China in 2023. Most provinces fall between 7,500 and 8,000 yuan.
The average contribution index of an individual mainly refers to the average value of the ratio of the annual contribution base to the social average wage of the previous year after the establishment of the individual account system. It generally ranges from 0.6 to 3. However, in areas like Beijing, Shanghai, and Guangdong, the upper and lower limits of the contribution base change starting from July 1 each year, and Tianjin has even started changing from this August. In such cases, the calculated contribution index may be lower than the contribution level.
Calculating based on 8,000 yuan, with an average contribution index of 1.0, paying an additional year of contributions entitles one to receive 1% of the pension calculation base, which is 80 yuan per month.
② The calculation formula for transitional pensions varies by province.
Taking Shandong Province as an example, the transitional pension is equal to the pension calculation base of the year of retirement × the individual's average contribution index × the transitional coefficient of 1.3% × the number of years of contributions and deemed contributions before the establishment of the individual account.
With an average contribution index of 1, a difference of one year in deemed contribution years can lead to an additional 1.3% of the pension calculation base, which is 104 yuan per month.
Adding both parts together results in 184 yuan per month. The difference for each year of service is indeed significant.
In fact, after retirement, our pensions will continue to be adjusted based on the growth of the social average wage and prices. The specific method of adjustment includes linkage adjustments. Linkage adjustments are mainly linked to both the length of contribution years and the pension level, so the gap in pensions after retirement will continue to widen.So, the length of contribution is very important. As long as there is the ability to pay, it is best not to interrupt. #Top Headline Creation Challenge# #Pension Calculation#
In the past, those with more than 35 years of service used to receive 90% of their basic salary as a standard, plus a certain retirement subsidy. Therefore, some elderly people might still think that the pension for more than 35 years of service is the same.
In fact, with the implementation of the pension insurance system in our country, coupled with continuous improvement over the years, the pension mainly reflects a series of principles such as "more contributions, more benefits" and "longer contributions, more benefits." The longer the contribution period, the higher the pension will be.
A friend asked, how much difference in pension can there be between 39 years and 40 years of service?
Actually, according to the current pension calculation formula, the difference in years of service is crucial.
The pension calculation formula generally includes three parts: basic pension, personal account pension, and transitional pension.
Advertisement
In recent years, the pension generated from participating in the pension insurance mainly consists of two parts: basic pension and personal account pension. The pension generated from the contribution period before the establishment of the pension insurance personal account system (mostly before January 1996) and the deemed contribution period mainly consists of basic pension and transitional pension.
Generally speaking, for those with 39 or 40 years of service, there is rarely an interruption later on. In this case, it might be the difference in the time of joining the workforce. Based on the time推算, it should be a one-year difference in service from 1984 to 1985.
Our country's pension insurance system was implemented for new employees starting in October 1986, and later in 1992, pension insurance contributions were implemented for all employees. Therefore, the difference in one year of service should be considered as the deemed contribution period.
① Basic pension = Average social salary of the year before retirement × (1 + average contribution index of the individual) ÷ 2 × contribution period × 1%.The social average wage of the previous year, also known as the pension calculation base in many places, ranges from 6,401 yuan to 12,183 yuan for the pension calculation base and social average wage across the 31 provinces in China in 2023. Most provinces fall between 7,500 and 8,000 yuan.
The average contribution index of an individual mainly refers to the average value of the ratio of the annual contribution base to the social average wage of the previous year after the establishment of the individual account system. It generally ranges from 0.6 to 3. However, in areas like Beijing, Shanghai, and Guangdong, the upper and lower limits of the contribution base change starting from July 1 each year, and Tianjin has even started changing from this August. In such cases, the calculated contribution index may be lower than the contribution level.
Calculating based on 8,000 yuan, with an average contribution index of 1.0, paying an additional year of contributions entitles one to receive 1% of the pension calculation base, which is 80 yuan per month.
② The calculation formula for transitional pensions varies by province.
Taking Shandong Province as an example, the transitional pension is equal to the pension calculation base of the year of retirement × the individual's average contribution index × the transitional coefficient of 1.3% × the number of years of contributions and deemed contributions before the establishment of the individual account.
With an average contribution index of 1, a difference of one year in deemed contribution years can lead to an additional 1.3% of the pension calculation base, which is 104 yuan per month.
Adding both parts together results in 184 yuan per month. The difference for each year of service is indeed significant.
In fact, after retirement, our pensions will continue to be adjusted based on the growth of the social average wage and prices. The specific method of adjustment includes linkage adjustments. Linkage adjustments are mainly linked to both the length of contribution years and the pension level, so the gap in pensions after retirement will continue to widen.So, the length of contribution is very important. As long as there is the ability to pay, it is best not to interrupt. #Top Headline Creation Challenge# #Pension Calculation#