The calculation of basic pension mainly includes three parts: basic pension, personal account pension and transitional pension.

(1) Basic pension = current year’s pension calculation base × (1 + my average contribution index) ÷ 2 × payment years × 1%.

Among them, the pension calculation base for that year is uniformly announced by the human resources and social security department. In the past, it was generally referred to as the average social salary in the previous year of retirement. In fact, the current pension calculation base is also based on the average social wage.

If my average contribution index is 1, the retirement basic pension can receive 40% of the pension calculation base.

Because the average salary in society is now higher, the burden of pension insurance is heavier. Nowadays, many individuals and companies will pay pension insurance based on the minimum base. In this case, the average payment index will also decline. If the average contribution index is 0.6, the retirement basic pension can receive 32% of the pension calculation base.

Assuming that the average payment index is 0.8, the retirement basic pension can receive 36% of the pension calculation base.

Taking Shandong Province as an example, the pension calculation base in 2020 is 6,573 yuan. With a calculation base of 36%, the basic pension is equal to 2,366 yuan.

(2) Personal account pension = the balance of the personal account at retirement divided by the number of months determined by the retirement age.

If you retire at the age of 60, the number of pension payment months is 139 months. Generally speaking, the younger the retirement age, the greater the number of payment months. A 55-year-old is 170 months and a 50-year-old is 195 months.

The balance of the personal account is gradually accumulated based on 8% of the monthly payment base. Before 2005, it was 11%. However, the previous payment base was relatively low, and the actual accumulated balance was not particularly large. Generally speaking, most current personal pension insurance account balances are between 50,000 and 100,000 yuan.

Assuming that the personal account balance is 70,000 yuan, and you retire at the age of 60, you can receive a personal account pension of 505 yuan per month.

(3) Transitional pensions are mainly calculated for the payment years and deemed payment years before the local implementation of the payment years combining pooled accounts and personal accounts, due to the lack of personal account pensions. It is calculated based on the pension calculation base and the individual’s average contribution index, transition coefficient and other factors.