The social security contribution base will begin to adjust in 2024. If you pay m
After entering July, the pension insurance payment base for various provinces began to be adjusted. For instance, Fujian Province has adjusted the upper and lower limits of the pension insurance payment base for employees participating in the 2024 pension insurance for government and public institutions to 22,164 yuan/month and 4,433 yuan/month, respectively. Shenzhen City, on the other hand, has temporarily implemented a lower limit of the payment base at 5,284 yuan starting from July 1st.
The main reason for the increase in the upper and lower limits of the social security payment base is the rise in the average social wage. According to national regulations, the upper and lower limits of the payment base are generally determined based on 60% to 300% of the average social wage of urban unit employees in the previous year.
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According to data published by the National Bureau of Statistics, in 2023, the average wage of employees in non-private urban units across the country increased by 5.8%, and in private units, it increased by 4.8%. The estimated growth rate of the average social wage is around 5.3%.
Many people may not understand, if the payment amount increases, will the pension also increase? Will it be cost-effective? Of course, it will be.
Pension Calculation Formula.
The pension generated from participating in the pension insurance mainly consists of two parts: the basic pension and the personal account pension.
① The basic pension part is calculated as the average social wage of the year prior to retirement × (1 + the individual's average payment index) ÷ 2 × the number of years of payment × 1%.
Since the basic pension is linked to the average social wage, it means that not only the upper and lower limits of the payment base will be affected by the average social wage, but the pension will also be influenced by the average social wage.According to the basic pension calculation formula, if we pay at the 60% tier for one year (assuming that the upper and lower limits of the contribution base remain unchanged from January 1st to December 31st), we can receive 0.8% of the average social wage of the year prior to retirement. At the 100% tier and the 300% tier, one can receive 1% and 2% of the average social wage, respectively.
This means that as long as the tier of our past contributions is determined, and the average social wage increases, the basic pension will also increase proportionally. It's equivalent to our past contributions at a lower amount resulting in the same basic pension as our current contributions at a higher amount.
Consider this: in the 1990s, the average social wage was only a couple of hundred yuan. Contributing at that time seems much more cost-effective when viewed from today's perspective.
② The personal account pension part is equal to the balance of the individual's social insurance account at retirement divided by the number of months determined by the retirement age.
The balance of the social insurance personal account is credited with 8% of the contribution base each month. For employees, as the contribution base increases, the amount of personal contributions will also increase. However, the personal contribution part is always 8% of the contribution base. Therefore, the entire personal contribution goes into the personal account. According to China's Social Insurance Law, if the money in the social insurance personal account is not exhausted, it can be inherited, so there is no loss.
In addition, the social insurance personal account accrues interest every year. The interest on the personal account is not an investment or deposit; the Social Insurance Law stipulates that it should not be lower than the interest rate of bank deposits of the same period.
Since 2016, the interest rate for the personal account has been uniformly announced by the Ministry of Human Resources and Social Security and the Ministry of Finance. For many years, it has been above 6% to 8%, far exceeding the interest rates of bank deposits and even financial investment products. The interest rate for 2022 is slightly lower, but it is still at 3.97%, which is really cost-effective compared to the current general bank deposit interest rate of around 2%.
The national regulations on the interest rate rules for the social insurance personal account take into account factors such as the growth of workers' wages and the balance of the fund to determine.
Based on the above rules, we can conclude that although the social security contribution base is increasing, it reflects to some extent the rise in the average social wage, and our pensions will also increase according to a certain proportion or corresponding proportion, and the insured population will definitely benefit. #Top Headline Creation Challenge# #Pension Knowledge#
After entering July, the pension insurance payment base for various provinces began to be adjusted. For instance, Fujian Province has adjusted the upper and lower limits of the pension insurance payment base for employees participating in the 2024 pension insurance for government and public institutions to 22,164 yuan/month and 4,433 yuan/month, respectively. Shenzhen City, on the other hand, has temporarily implemented a lower limit of the payment base at 5,284 yuan starting from July 1st.
The main reason for the increase in the upper and lower limits of the social security payment base is the rise in the average social wage. According to national regulations, the upper and lower limits of the payment base are generally determined based on 60% to 300% of the average social wage of urban unit employees in the previous year.
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According to data published by the National Bureau of Statistics, in 2023, the average wage of employees in non-private urban units across the country increased by 5.8%, and in private units, it increased by 4.8%. The estimated growth rate of the average social wage is around 5.3%.
Many people may not understand, if the payment amount increases, will the pension also increase? Will it be cost-effective? Of course, it will be.
Pension Calculation Formula.
The pension generated from participating in the pension insurance mainly consists of two parts: the basic pension and the personal account pension.
① The basic pension part is calculated as the average social wage of the year prior to retirement × (1 + the individual's average payment index) ÷ 2 × the number of years of payment × 1%.
Since the basic pension is linked to the average social wage, it means that not only the upper and lower limits of the payment base will be affected by the average social wage, but the pension will also be influenced by the average social wage.According to the basic pension calculation formula, if we pay at the 60% tier for one year (assuming that the upper and lower limits of the contribution base remain unchanged from January 1st to December 31st), we can receive 0.8% of the average social wage of the year prior to retirement. At the 100% tier and the 300% tier, one can receive 1% and 2% of the average social wage, respectively.
This means that as long as the tier of our past contributions is determined, and the average social wage increases, the basic pension will also increase proportionally. It's equivalent to our past contributions at a lower amount resulting in the same basic pension as our current contributions at a higher amount.
Consider this: in the 1990s, the average social wage was only a couple of hundred yuan. Contributing at that time seems much more cost-effective when viewed from today's perspective.
② The personal account pension part is equal to the balance of the individual's social insurance account at retirement divided by the number of months determined by the retirement age.
The balance of the social insurance personal account is credited with 8% of the contribution base each month. For employees, as the contribution base increases, the amount of personal contributions will also increase. However, the personal contribution part is always 8% of the contribution base. Therefore, the entire personal contribution goes into the personal account. According to China's Social Insurance Law, if the money in the social insurance personal account is not exhausted, it can be inherited, so there is no loss.
In addition, the social insurance personal account accrues interest every year. The interest on the personal account is not an investment or deposit; the Social Insurance Law stipulates that it should not be lower than the interest rate of bank deposits of the same period.
Since 2016, the interest rate for the personal account has been uniformly announced by the Ministry of Human Resources and Social Security and the Ministry of Finance. For many years, it has been above 6% to 8%, far exceeding the interest rates of bank deposits and even financial investment products. The interest rate for 2022 is slightly lower, but it is still at 3.97%, which is really cost-effective compared to the current general bank deposit interest rate of around 2%.
The national regulations on the interest rate rules for the social insurance personal account take into account factors such as the growth of workers' wages and the balance of the fund to determine.
Based on the above rules, we can conclude that although the social security contribution base is increasing, it reflects to some extent the rise in the average social wage, and our pensions will also increase according to a certain proportion or corresponding proportion, and the insured population will definitely benefit. #Top Headline Creation Challenge# #Pension Knowledge#