Promoted to a senior professional title in July 2024 and retired in October. How
For employees of government agencies and public institutions, achieving a senior professional title before retirement can significantly increase their pension benefits.
According to the national regulation of a 10-year transitional period, it is true that this transitional period will end in October 2024. However, this does not mean that after the end of the transitional period, achieving a senior professional title upon retirement will have no impact on the pension.
The pension calculation formula after October mainly consists of three parts: the basic pension, the personal account pension, and the transitional pension. Below is the pension calculation formula for retired middle-ranking personnel in government agencies and public institutions in Shandong Province:
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What are the key points of the pension calculation formula?
Based on the formula mentioned above, the calculation content of the basic pension and the personal account pension is formally the same as that of enterprise employees. However, the calculation of the years of contribution and the accumulation time is different.
① The contribution period for the basic pension includes both the actual contribution period and the deemed contribution period. The deemed contribution period refers to the continuous work experience before October 2014, which can be recognized as a deemed contribution period.
There is a risk in recognizing the deemed contribution period; if there are any illegal or criminal activities, the continuous work experience may be reset to zero, and thus there would be no deemed contribution period. This is different from the actual contribution period of enterprise employees.
② The average contribution index is a comprehensive index that takes into account both the deemed contribution index and the actual contribution index. The average contribution index for enterprise employees is generally calculated based on the actual average contribution index.③ The deemed contribution index is determined comprehensively based on factors such as the individual's position level, job salary grade, and retirement living allowance at the time of retirement. If there is a promotion in job level at the time of retirement, the deemed contribution index will definitely increase. For example, if someone is promoted from an intermediate title to a senior title, or from an eighth-level position to a seventh-level position. Although the promotion in the position is only a slight one, the retirement living allowance can be significantly increased. In addition, some level-related benefits enjoyed after retirement, such as winter heating subsidies, can also be enhanced.
④ The increase in the deemed contribution index will only affect the deemed contribution service period. For instance, if the deemed contribution index increases by 0.2, and the deemed contribution service period is 30 years, the actual increase in the basic pension is 0.2/2 * 30 years * 1% = 3% of the pension payment base. According to the pension payment base of 7,468 yuan in Shandong Province last year, the difference in the basic pension would be over 220 yuan.
⑤ The balance in the individual account is not affected. The main reason is that the increase in the level salary will only affect the contribution base of the next year, and if retirement follows immediately, it will be unrelated to the contribution base. The same applies to enterprise employees. After being promoted to a senior title, the salary treatment is increased, but it is only for a few months before retirement. However, enterprises handle this more flexibly, and important experts can be rehired after retirement. In contrast, the difficulty of rehiring in government and public institutions is much greater.
⑥ The impact of transitional pensions. Transitional pensions are actually a compensatory benefit set up for the deemed contribution service period before the establishment of the individual account system for the pension insurance, due to the lack of accumulation in the individual accounts of pension insurance and occupational annuity. Transitional pensions are more cost-effective compared to accumulated contributions. Of course, if someone passes away early, the balance in the individual account can be inherited. However, transitional pensions cannot be inherited.Following the assumption mentioned earlier, if the contribution index is increased by 0.2, and the transitional coefficient in Shandong Province is 1.3%, with a notional contribution period of 30 years, one can receive a pension based on 7.8% of the pension calculation base. Based on a calculation of 7,468 yuan, this part of the benefit would be around 580 yuan.
In other words, if the promotion to a senior professional title leads to an increase of 0.2 in the notional contribution index, the pension could be increased by about 800 yuan.
In fact, as can be seen from the analysis above, promoting to a higher professional title or position level before retirement mainly affects the pension benefits related to the notional contribution period, and does not impact the benefits related to the actual contribution period. Over time, the notional contribution period for retired workers will become shorter and shorter, eventually completing the historical transition. #Top Headline Creation Challenge# #Public Institution Pension#
For employees of government agencies and public institutions, achieving a senior professional title before retirement can significantly increase their pension benefits.
According to the national regulation of a 10-year transitional period, it is true that this transitional period will end in October 2024. However, this does not mean that after the end of the transitional period, achieving a senior professional title upon retirement will have no impact on the pension.
The pension calculation formula after October mainly consists of three parts: the basic pension, the personal account pension, and the transitional pension. Below is the pension calculation formula for retired middle-ranking personnel in government agencies and public institutions in Shandong Province:
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What are the key points of the pension calculation formula?
Based on the formula mentioned above, the calculation content of the basic pension and the personal account pension is formally the same as that of enterprise employees. However, the calculation of the years of contribution and the accumulation time is different.
① The contribution period for the basic pension includes both the actual contribution period and the deemed contribution period. The deemed contribution period refers to the continuous work experience before October 2014, which can be recognized as a deemed contribution period.
There is a risk in recognizing the deemed contribution period; if there are any illegal or criminal activities, the continuous work experience may be reset to zero, and thus there would be no deemed contribution period. This is different from the actual contribution period of enterprise employees.
② The average contribution index is a comprehensive index that takes into account both the deemed contribution index and the actual contribution index. The average contribution index for enterprise employees is generally calculated based on the actual average contribution index.③ The deemed contribution index is determined comprehensively based on factors such as the individual's position level, job salary grade, and retirement living allowance at the time of retirement. If there is a promotion in job level at the time of retirement, the deemed contribution index will definitely increase. For example, if someone is promoted from an intermediate title to a senior title, or from an eighth-level position to a seventh-level position. Although the promotion in the position is only a slight one, the retirement living allowance can be significantly increased. In addition, some level-related benefits enjoyed after retirement, such as winter heating subsidies, can also be enhanced.
④ The increase in the deemed contribution index will only affect the deemed contribution service period. For instance, if the deemed contribution index increases by 0.2, and the deemed contribution service period is 30 years, the actual increase in the basic pension is 0.2/2 * 30 years * 1% = 3% of the pension payment base. According to the pension payment base of 7,468 yuan in Shandong Province last year, the difference in the basic pension would be over 220 yuan.
⑤ The balance in the individual account is not affected. The main reason is that the increase in the level salary will only affect the contribution base of the next year, and if retirement follows immediately, it will be unrelated to the contribution base. The same applies to enterprise employees. After being promoted to a senior title, the salary treatment is increased, but it is only for a few months before retirement. However, enterprises handle this more flexibly, and important experts can be rehired after retirement. In contrast, the difficulty of rehiring in government and public institutions is much greater.
⑥ The impact of transitional pensions. Transitional pensions are actually a compensatory benefit set up for the deemed contribution service period before the establishment of the individual account system for the pension insurance, due to the lack of accumulation in the individual accounts of pension insurance and occupational annuity. Transitional pensions are more cost-effective compared to accumulated contributions. Of course, if someone passes away early, the balance in the individual account can be inherited. However, transitional pensions cannot be inherited.Following the assumption mentioned earlier, if the contribution index is increased by 0.2, and the transitional coefficient in Shandong Province is 1.3%, with a notional contribution period of 30 years, one can receive a pension based on 7.8% of the pension calculation base. Based on a calculation of 7,468 yuan, this part of the benefit would be around 580 yuan.
In other words, if the promotion to a senior professional title leads to an increase of 0.2 in the notional contribution index, the pension could be increased by about 800 yuan.
In fact, as can be seen from the analysis above, promoting to a higher professional title or position level before retirement mainly affects the pension benefits related to the notional contribution period, and does not impact the benefits related to the actual contribution period. Over time, the notional contribution period for retired workers will become shorter and shorter, eventually completing the historical transition. #Top Headline Creation Challenge# #Public Institution Pension#