What Are the Pros and Cons of a Pension Lump Sum?

In January 2015, the State Council issued the "Decision on the Reform of the Pension Insurance System for Staff of Institutions and Institutions", and it will be implemented from October 1, 2014. At present, 19 provinces including Heilongjiang, Sichuan, Shandong, Shanghai, Jiangsu, Fujian, Jilin, Liaoning, and Shanxi have successively announced implementation measures.

19 provinces including Fujian announce implementation plan

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In January 2015, the State Council issued the "Decision on the Reform of the Pension Insurance System for Staff of Institutions and Institutions", and it will be implemented from October 1, 2014. At present, 19 provinces including Heilongjiang, Sichuan, Shandong, Shanghai, Jiangsu, Fujian, Jilin, Liaoning, and Shanxi have successively announced implementation measures.

In January 2015, the State Council issued the "Decision on the Reform of the Endowment Insurance System for Staff of Institutions and Institutions", which will be implemented from October 1, 2014. At present, 19 provinces including Heilongjiang, Sichuan, Shandong, Shanghai, Jiangsu, Fujian, Jilin, Liaoning, and Shanxi have successively announced implementation measures.

Jin Weigang, director of the Social Security Research Institute of the Ministry of Human Resources and Social Security, said that according to the work arrangement of the State Council, before the end of 2015, all provinces and regions should introduce implementation plans and then organize implementation. However, the merger involves a series of related policies and operational issues, and there are differences in local conditions, so there will be a certain "time difference" in the implementation of localities.

The "combination" of old-age care concerns the immediate interests of nearly 40 million government agencies and institutions. The reporter conducted an investigation on the four major focal points after the merger.

Focus one: How to pay fees? Individuals pay 8% for "delayed retirement" participation design

The reporter combed the opinions on the implementation of the "combination" of pensions in various places and found that all provinces have uniformly determined 8% of the individual's paid wages in accordance with the decision of the State Council, but the expressions of the bases of individual paid wages are different.

For example, Shanxi, Yunnan, Liaoning, Heilongjiang and other places are clear. The individual payment bases of government agencies include: the basic salary in the previous year's salary income, the national unified subsidy subsidy (hard remote remote area subsidy, police rank subsidy, customs allowance and other national unified regulations Items that were included in the original base for calculating retirement costs), standardized allowances (regional supplementary allowances), and year-end lump-sum bonuses. However, in the implementation measures, Shanghai stipulated that the individual payment base is determined by my monthly average income in the previous year.

Tang Jun, the Secretary-General of the Social Policy Research Center of the Chinese Academy of Social Sciences, said that when Shanghai reformed the endowment insurance system in the 1990s, it had consolidated the endowment insurance of employees in government agencies and enterprises into one institutional framework, so it will try to Some sayings from previous documents are used. Other provinces have just merged, and they are still in the running-in stage. They will list in detail the various incomes related to the base of individual contributions and wages.

Experts say that the expressions are different, but there are not many differences in substance. The amount of individual contributions will be determined based on my basic salary, allowances, year-end one-time bonuses, and performance wages.

In some provinces, the payment plan specifies "personalized" provisions for delayed retirees. Heilongjiang has clarified its insurance participation policy: after the reform, in accordance with relevant national policies and cadre management authority, staff members who can appropriately extend the retirement age after approval will continue to participate in insurance payment. If a few of them continue to work when they reach the age of 70, individuals can choose to continue to pay, or they can choose not to continue to pay. When formal retirement procedures are completed, old-age benefits are calculated in accordance with regulations.

Focus two: Is money enough? Three sources guarantee pension

The "Statement on the Final Accounts of the National Social Insurance Fund in 2014" recently announced by the Ministry of Finance shows that in 2014 China's pension insurance fund had a negative balance of 31.9 billion yuan. So after the merger, what kind of impact will this gap have on the endowment insurance funds of institutions and institutions? Can the finances afford the cost of reform?

When the State Council issued a document, it pointed out that a fund-raising mechanism for ensuring pension distribution was established and improved. Government agencies and their staff should pay the old-age insurance premiums in full and on time in accordance with regulations; governments at all levels should actively adjust and optimize the structure of fiscal expenditures. In this regard, the formulation of programmes is basically the same everywhere.

Jin Weigang said that the "pension gap" reported by some media at present refers to the imbalance between the current collection of income and expenditures of enterprise pension insurance funds and has nothing to do with the reform of the pension system of government agencies. After the reform, the basic endowment insurance funds of government agencies and institutions were established separately.

"The source of funds for the pension insurance fund mainly includes three aspects, namely unit and individual contributions, financial subsidies, and fund investment and operating income. Among them, financial subsidies are one of the legal sources of pension insurance in China. If there are shortcomings, you can use financial subsidies to ensure that the fund's revenue and expenditure are generally balanced and provide reliable protection for all pensioners to receive their pensions. "Jin Weigang said.

Chu Fuling, director of the China Social Security Research Center, said that in specific units, there is a difference in the pressure on pensions after the reform. For those units with a large number of retirees, there is no need to pay pensions to the "elderly" and Money is used to pay employees, and in a sense, a balance has been achieved.

Tang Jun emphasized that the pressure of fiscal investment after the merger will exist to a certain extent, especially for some relatively poor areas. His investigation at the grassroots level found that in some counties, even the increase in the salary of civil servants has not been implemented, and it is more difficult to pay endowment insurance and occupational annuities. In order to alleviate financial pressure and ensure fund balance, long-term institutional arrangements are required. The endowment insurance funds of institutions and institutions must also operate properly to produce higher returns as much as possible.

Focus three: Does the treatment fall? Enormous number of "Men" treatment to ensure no reduction

After the reform, is the pension more or less? The reporter reviewed the implementation plans in various places and found that the overall requirements are consistent with the requirements of the central reform, that is, the "elders" who retired before the reform took the October 1, 2014 boundary, and continued to pay basic pensions in accordance with the original treatment standards set by the state. The "newcomers" who participated in the work after the reform shall, based on the principle of "overpaying more and paying more, pay more," and assess pensions based on the salary level and payment situation at the time of retirement.

The key lies in the fact that the number of middle-aged people who participated in the work before the reform and retired after the reform was huge and accounted for the vast majority of the staff of the institutions and institutions. What will happen to the retirement benefits of these people? The reporter's investigation found that the state has stipulated that the transitional pension should be issued for the "Chinese", and a 10-year transition period should be established for the "Chinese". During this period, the new and old treatment schemes were compared. The basic pension issued is lower than the old method, and is replenished according to the old method; the new method is higher than the old method, and the higher part is capped on a yearly basis.

The reporter interviewed the social security departments of Ningxia, Jiangsu and other provinces and regions, and found that the schemes designed under the principle of "lower limit and higher limit" in various places can ensure that the retirement benefits of the "Middle People" are basically not reduced.

"The correlation coefficient of the new method is calculated backwards on the premise of ensuring that the treatment of" Chinese people "is not reduced. The original intention of this design is to achieve the convergence of the old and new policies and to stabilize the transition. People who are reformed will not suffer losses, nor can they There is a big gap between the old and new methods. "Said Cui Xinxing, head of the endowment insurance department of the Ningxia Social Security Bureau.

According to Jin Weigang, in the past few years, China implemented a five-year transition period when implementing the enterprise employee pension insurance reform. Now the situation of "combination" of pensions is more complicated, so the transition period is extended to 10 years to ensure that the treatment of "people in the middle" can be remain balanced.

Focus 4: Is it difficult to transfer? Barrier-free mobility both inside and outside the co-ordination area

After the "combination" reform of the old-age care system was successively implemented, many government agencies and institutions suggested that if the work was transferred, how would pensions be transferred and continued? Interviews by reporters found that local plans have made special provisions for this, insured personnel flow between institutions and institutions within the same overall scope, only transfer the pension insurance relationship, not transfer funds.

Some civil servants or employees of public institutions want to resign and go to the sea without worrying about the transfer of old-age insurance. After the reform, the insured personnel moved across the overall planning scope or between government agencies and enterprises. While transferring the basic pension insurance relationship, the basic pension insurance personal account storage amount was transferred along with it, and each of them after October 1, 2014 The actual annual paid salary is the base, and the fund is transferred based on the total of 12%.

"In terms of pension insurance transfer, we have made a comprehensive design." Cui Xinxing said that people who want to leave government agencies and institutions can transfer regardless of which type of pension insurance they participate in. The payment period is calculated continuously without causing any losses.

Industry insiders pointed out that it will take some time to further refine and improve the transfer and connection. For example, Liaoning Province stipulates that specific implementation measures for occupational annuities will be introduced before the end of 2015, and a provincial information platform will be established to centrally deploy the information management system for pension insurance information for staff of institutions and institutions. Measures for the transfer and continuation of the basic old-age insurance relationship between migrant workers between enterprises, as well as the verification and payment of benefits. ^[1]