There are two modes of providing for the aged: pay-as-you-go system and fund accumulation system. To put it simply, the former is for the working people to support the elderly, and the latter is for themselves. Pay-as-you-go system is an endowment insurance fund composed of employees' contributions during their employment, employers' or employers' contributions and government subsidies during the same period, which is used to pay retirees' pensions and implement an annual balance budget; The fund accumulation system means that workers build and accumulate personal pension account funds year by year through their own and employer's contributions during their employment, and then use the accumulated pension funds and investment income to pay pensions after retirement, and implement the fund reserve system. The former has the characteristics of mutual assistance and no pressure to maintain and increase value; The latter has complicated management and great pressure to maintain and increase value, but it can reduce the burden on the government. Pay-as-you-go system embodies the essence of social old-age insurance system. China chooses the mode of combining unified account and personal account to mediate the fairness of intergenerational burden.
Pension calculation method Pension = basic pension+personal account pension = personal account storage amount ÷ calculation months. Basic pension =÷2× payment period × 1%= average monthly salary of employees in the whole province last year ÷2× payment period × 1%. The calculation of pension assumes that the local average salary in the last year of retirement is 5000 yuan, the ratio of individual contribution base to local average salary over the years is 1, the payment period is 30 years, the retirement age is 60 years, and the personal account deposit is 144000 yuan. Pension calculation method According to the latest pension calculation method, employees' retirement pension consists of two parts. Personal basic pension: calculation method of pension =÷2× payment period × 1% = average monthly salary of employees in the whole province last year ÷2× payment period × 1%. To sum up, the calculation method of pension is = basic pension+personal account pension. Under different circumstances, the determination of the place to receive pension after retirement is different. Pension, also known as pension and retirement fee, is the most important pension insurance treatment. That is to say, according to the relevant national documents, the monthly or lump-sum payment of insurance benefits in the form of money is the need to benefit the society and is mainly used to ensure the basic living needs of employees after retirement according to their contributions to society and their qualifications or retirement conditions. Pensions are accumulated and operated according to the principle of accumulation by the state, the collective and the individual. When people are in their prime of life, part of the wealth created is invested in pension plans to ensure a sense of security in their later years.
legal ground
People's Republic of China (PRC) social insurance law
Article 12 The employing unit shall pay the basic old-age insurance premium according to the proportion of the total wages of employees stipulated by the state and record it in the basic old-age insurance pooling fund.
Employees shall pay the basic old-age insurance premium in accordance with the proportion of wages stipulated by the state and record it in their personal accounts.
Individual industrial and commercial households without employees, part-time employees who have not participated in the basic old-age insurance in the employing unit and other flexible employees who have participated in the basic old-age insurance shall pay the basic old-age insurance premiums in accordance with state regulations and record them in the basic old-age insurance pooling fund and individual accounts respectively.
Fifteenth basic pension consists of overall pension and individual account pension.
The basic pension is determined according to factors such as individual cumulative payment years, payment wages, average salary of local employees, personal account amount, average life expectancy of urban population, etc.
Sixteenth individuals who participate in the basic old-age insurance will receive the basic old-age pension on a monthly basis if they have accumulated contributions for fifteen years when they reach the statutory retirement age.
Individuals who participate in the basic old-age insurance and pay less than fifteen years when they reach the statutory retirement age can pay for fifteen years and receive the basic pension on a monthly basis; Can also be transferred to the new rural social endowment insurance or urban residents' social endowment insurance, enjoy the corresponding pension insurance benefits in accordance with the provisions of the State Council.