What Is a Pension Buyout?

Pension combination: refers to the implementation of the same basic pension insurance system for employees of government agencies and institutions as for enterprise employees.

Pension consolidation

pension"

National pension plans have been included in the Twelfth Five-Year Plan. In the Decision, the national pension plans are described as achieving a national pension plan for basic pensions, as opposed to advance and research. The term "fulfillment" also shows the strength of the government in implementing this reform.

Although the policy goal of national pension pooling has been proposed for many years, even the provincial pooling has not been fully realized. According to the 2012 Social Security Fund audit report, as of the end of 2011, 17 provinces across the country have not yet fully reached the "six unifications" standard at the provincial level.

The main resistance of the provincial-level co-ordination and the national co-ordination lies in the interest game between the central and local governments. Jin Weigang pointed out that in 2012, the pension fund balance was 2.4 trillion yuan, but more than half were concentrated in several eastern provinces and cities. Many regions in the central and western regions have gaps in pension income and expenditures, which require central financial transfer payments to be issued.

While the balance of income and expenditure of the basic pension insurance fund in some areas requires immense central subsidies, economically developed provinces have formed pension fund balances of more than 100 billion yuan. However, the central government cannot adjust the use of these funds because national coordination has not been achieved.

In terms of endowment insurance subsidies, the pattern of local dependence on the central government has also formed over the years. In 2010, the subsidy funds for basic endowment insurance by the central and local governments at the level of 185.1 billion yuan, of which the central government accounted for 86%.

Entrusted by the National Development and Reform Commission, the Social Security Research Center of Renmin University of China is currently drafting a national overall plan for endowment insurance. Yang Lixiong, the deputy director of the center, told reporters of the National Finance and Economics Weekly that the biggest difficulty of the plan lies in the methods used to reduce the resistance of developed areas to "coordination" and take care of their interests. The regions benefited, and their enthusiasm for collection was guaranteed to avoid relying entirely on central transfers.

When realizing overall national coordination, a transfer fund should be established at the central government, so that some provinces with surpluses can put a part of them into the central government to form a fund, and then this fund can be used to allocate to the provinces with severe pension fund deficits.

Don't send all the fund balances to the central government, then the developed regions will have no initiative. Neither can the underdeveloped provinces wait for the central government to send money, and they should mobilize their own enthusiasm for collecting pensions. "The key to coordinating national pension insurance is to set up a good incentive mechanism."

The other meaning of overall planning is that finance is the main body, and the individual contributions of personal income tax and social endowment insurance are unified to form a national pension. In this way, even those who do not pay endowment insurance due to low income can get a basic pension, which is essentially equivalent to the new rural social endowment insurance and urban resident social endowment insurance, but its level will be further improved.

(1) Fundamentally speaking, the dual-track pension system is inconsistent with the spirit of the Constitution and relevant laws.

Article 44 of the Chinese Constitution clearly states: "The state implements the laws and

On October 27, 2015, Li Zhong, spokesperson of the Ministry of Human Resources and Social Security, revealed at a press conference in the third quarter of 2015 that the reform of the endowment insurance system of institutions and institutions has been steadily progressing, and the filing of the reform plan for the endowment insurance system of institutions and institutions nationwide has been carry out.

Since the "Decision" of the State Council was issued, Sichuan, Shandong, Shanghai, Jiangsu, Fujian, Jilin, Hunan and other places have successively introduced pension consolidation plans. After entering October, the process in various places has accelerated significantly. Yunnan, Gansu, Shaanxi, Hubei, Tianjin, Heilongjiang and other places have successively announced their opinions and measures for the implementation of pension consolidation. As of now, according to incomplete statistics, at least 13 provinces have announced to the public the pension consolidation plan.

The implementation methods of the provinces are generally consistent with the reform plan of the State Council, that is, starting from October 1, 2014, institutions and institutions have implemented a basic old-age insurance system combining social pooling and personal accounts. The basic endowment insurance premiums shall be borne by both the unit and the individual. The proportion of the basic endowment insurance premiums paid by the unit shall be 20% of the total wages of the unit, and the individual contribution shall be deducted by the unit. ^[1]

On a certain day in September 2013, the number of elderly people over 60 in China quietly exceeded 200 million.

According to the figures of China's annual increase of population over the age of 60 in recent years, every day, nearly 25,000 people enter the ranks of the elderly over 60 years old.

An indisputable fact is that China s

The endowment insurance business is a major event that affects the vital interests of the people. Although the "dual-track system" of retirement pensions formed due to historical reasons is in line with China's national conditions at the time, the disadvantages caused by the "dual-track system" have become increasingly apparent. Therefore, it is the general trend to carry out the dual-track reform of retirement pensions. Reform is not simply a dual track and a single track, but a process of gradual and gradual exploration. On the basis of learning from foreign successful reform experiences, we can work hard in the following aspects in combination with China's actual situation.

(1) Establish a reasonable legal system for old-age insurance, and enforce a unified old-age insurance system for all people. Although the State Council has increased pensions for enterprise retired employees for eight consecutive years, if the fundamental problem of the "dual-track pension system" is not solved, it will lead to many enterprise retired employees living in poverty for a long time. It is understood that an expert-level talent who has more than 40 years of working experience and enjoys government subsidies, but his retirement pension is one quarter of his college classmates who retired in government agencies. This leads to a reduction in the enthusiasm of young people to work, and a series of social problems such as low social efficiency and reduced social productivity. The essence of the problem is not theoretical debate, but interest adjustment. The key is not "proposing a solution", but "determining". On the one hand, the government is the policy maker and implementer, and civil servants should take the lead in reforming the pension. On the other hand, compared with enterprise workers and public institution employees, the number of civil servants is the smallest. Behind the difficulty in advancing pension reform in public institutions is that the reform of the pension system in government agencies is lagging behind. In order to be fair, the social security reform of institutions and institutions should adhere to the direction of corporate social security reform, establish a reasonable legal system for pension insurance, and enforce a unified pension system for the entire population. It should be said that now there is no shortage of experience in reforming the pension system for civil servants. What is lacking is determination, and there will always be pain in the reform.

(2) Establish a diversified pension mechanism and vigorously strengthen basic social pensions. It is necessary to accelerate the improvement of a multi-dimensional pension mechanism based on social insurance, social assistance, and social welfare, with a focus on the basic pension system, supplemented by charity and commercial insurance. Establish a new type of social endowment insurance system in accordance with the requirements of individual contributions, collective subsidies, and government subsidies. The composition of pensions can be further refined. In this regard, the Dutch experience is worth learning from. China can combine its own national conditions to establish different proportions of funding sources, supplement basic gains, personal accounts as the main body, "enterprise annuities, professional annuities for civil servants, collective economic dividends, and land security" as supplements, personal savings and family mutual assistance Pension fund system. Through the efforts of all parties, ensure the security of funds and sources of funds for the pension, in order to give full play to the role of multiple pension mechanisms to secure sources, optimize channels, increase the foundation, and promote harmony.

(3) Reform China's current retirement system and raise the legal retirement age in a timely manner. The issue of pensions is not an isolated issue. It reflects the deficiencies and deficiencies in the design of the retirement system and even the social security system. It is necessary to moderately reform the current retirement system in China. This can be learned from many European countries. The retirement age in France and Germany has increased from 65 to 67, which has alleviated the financial burden of the country to a large extent. China should also raise the retirement age in due course. Studies have shown that if China's current retirement age increases by 5 years each, the current retired population will decrease by 10 million. Under the premise of constant payment levels, pension expenditure can be reduced by 1/3. In addition, the state can establish a flexible retirement system. Allow workers to have a flexible and flexible retirement system in terms of retirement age, retirement style, and retirement income. For example, the age of retirement can be extended appropriately for those working in the field of knowledge economy; the retirement age can be appropriately advanced for those engaged in manual labor. This leaves ample room for each worker to choose the appropriate retirement age according to his or her specific situation, which is also in line with the development trend of the world's retirement system.

(IV) Steady progress is made in the entry of pensions into the market, and the ability to maintain and increase the value of pensions is increased through diversified investments. As China enters an aging society, the pressure on old-age care is increasing, and relying solely on financial input to resolve the source of old-age funds is stretched. Therefore, it is necessary to actively and steadily increase the source of old-age funds through various investment channels. This is also the common practice of countries around the world to preserve and increase the value of pensions. According to the 2010 annual report of the Social Security Fund, the social security fund achieved an investment return of 4.23% in 2010. In the ten years since its establishment, the average annual investment return of the social security fund was 9.17%. If the pension can enter the market steadily, it can not only realize its own value preservation and appreciation, but also boost the confidence of the stock market and promote the stable, healthy and sustainable development of the market. However, the stock market is a high-risk market. To enter the market for pensions, a strict management system and investment mechanism must be established to prevent the loss of pension principals. In addition, some funds can be put into operation to increase the fund's income, use social insurance funds to invest, buy government bonds, or deposit in state-owned commercial banks. In this way, the funds needed for the country's long-term construction can also be partially solved. On the premise of further standardizing the domestic capital market, actively explore the investment market of basic pension insurance funds, and can selectively invest in listed shares as a general investor, focusing on the investment direction of pension insurance funds with a long and stable construction period. Return on long-term investments. You can also selectively invest in excellent corporate bonds or capital construction bonds to truly take advantage of long-term funds and create great economic benefits. The improvement of economic benefits will not only have a direct impact on the national economy, but also indirectly achieve a steady increase in fund income.

(5) Efforts will be made to eliminate industry pension differences and narrow the retirement pension gap. Continue to steadily increase the basic pensions of enterprise retirees, gradually narrow the gap in pension benefits between enterprises, institutions, and institutions, and alleviate the prominent contradiction of the "dual-track system" for retirement pensions. The state must guide and regulate the profit distribution of enterprises. Local governments should appropriately organize local enterprises to directly convert corporate profits of a certain size into pension funds. For enterprises with difficult operating conditions, the government can provide policy support to help them out of their predicament and ensure the security of pension payments in a way that enhances the economic efficiency of the enterprise. In the current economic field, due to the needs of competition, companies often invest more funds in reproduction, ignoring the basic rights and interests of employees, and this trend should be curbed in a timely manner. Even small and medium-sized enterprises that are just starting out should guarantee the employees' legitimate rights and interests within the scope permitted by the conditions and ensure the security of payment of pensions to the greatest extent.

News such as pension gaps, delayed retirement, and housing pensions are often seen in newspapers, and they will easily arouse people's nerves and cause the whole society to pay attention. Endowment has become a topic of national anxiety together with housing, education, and medical care.

The main cause of anxiety is that people worry about whether pensions will face a payment crisis. There are various versions of the data on the pension gap. Some experts from the Chinese Academy of Social Sciences said that the personal account deficit of China's endowment insurance in 2011 was 2.2 trillion yuan, which is equivalent to more than 1,500 yuan in debt for every citizen. These figures have given the audience some sense of crisis over pensions. In fact, the pension gap is a more complex concept, and the specific definition of gap and deficit is very important.

China's basic endowment insurance system includes urban resident social endowment insurance (referred to as urban residence insurance), urban employee basic endowment insurance, and new rural social endowment insurance (referred to as new rural insurance). In some areas, new rural insurance and urban residential insurance were merged to form urban and rural residents' insurance. All types of social insurance have their own funding pools, while the new rural insurance and urban residential insurance have smaller scales, and their payments depend to a greater extent on financial subsidies. Therefore, what part the "gap" refers to has a great influence on the conclusion.

From a more macro point of view, the gap in pension income and expenditure will also be different in calculations depending on whether it includes fiscal subsidies and whether it has been included in accumulated funds over the years. From a time perspective, the gap between current and medium-term long-term revenue and expenditure is even more different.

Without clarifying the above series of definitions, talking about gap data lacks practical significance. But even so, audience sentiment is still abducted by higher-than-expected numbers. Often, the larger the gap, the more it can attract people's attention, and the more quickly it spreads.

The audience s blind faith in the gap data on the Internet is just an appearance. Behind it is the anxiety that pervades the entire social security and people s livelihood fields. The public s doubts and anxieties about the ability to pay for pensions have been amplified to a certain extent. Compared with the above data, the data from some other agencies reflect the opposite situation.

The more authoritative data is the national social security fund audit results released by the National Audit Office in August 2012. The report shows that as of the end of 2011, the accumulated balance of the basic pension insurance fund for enterprise employees nationwide was approximately 1.85 trillion yuan, and the accumulated balance of the three social pension insurance funds of the new rural insurance, urban residential insurance, and urban and rural residential insurance was 163.553 billion yuan.

Judging from the current gap of pensions, it can be divided into three types. The first is the gap generated by the current year's pension insurance fund collection income cannot meet the expenditure; the second is the addition of financial subsidies, which can not be offset by expenditure. The third is the above two items plus the accumulated funds over the years, which still cannot meet the expenditure gap.

In 2012, there were 17 provincial units in China with the first gap, and no provincial units with the second or third gap. Gonson believes that this shows that China's pension gap is generally manageable in the short term, and even if multiple provinces experience inadequate income for the year, the gap will be able to be made up with financial subsidies. Several people interviewed by the reporter said that at least 3-5 years, there will be no crisis in pension payment in China.

Looking at the long-term gap, a research report by the Bank of China pointed out that the implicit debt of Chinese corporate endowment insurance in 2030 is equivalent to about 38% of the GDP (gross domestic product) of that year, and this proportion will increase to 60 in 2050. %about.

It is worth noting that OECD countries are making active adjustments to pension policies based on the size of long-term hidden debt. The main countermeasure is to increase the age of receiving pensions as the population lives longer. Chu Fuling, director of the Social Security Research Center of the Central University of Finance and Economics, believes that China's ability to pay pensions has long-term sustainability after implementing reforms such as the gradual delay of retirement age.

On the afternoon of May 5, 2014, Hu Xiaoyi, member of the National Committee of the Chinese People's Political Consultative Conference and deputy minister of human resources and social security, said that regarding the timetable for pension consolidation, "the prime minister has actually given a timetable."

The State Council Premier Li Keqiang clearly stated in the government work report Overall Work Deployment in 2014 that the establishment of a unified basic endowment insurance system for urban and rural residents, improvement of the connection method with employee endowment insurance, reform of the endowment insurance system of institutions and institutions, and encourage development Enterprise annuities, occupational annuities and commercial insurance. "

In fact, the "dual-track system" in the treatment of pensions and other social security benefits for personnel of government agencies and enterprises has been controversial, and there have been constant calls in the society for the consolidation of pensions. It is worth noting that Yin Weimin, Minister of Human Resources and Social Security, stated at the National Human Resources and Social Security Working Conference held on December 26, 2013 that in 2014, social security will promote the reform of the endowment insurance system of institutions and institutions, and focus on solving " "Two-track system", "poor treatment". From this perspective, the dual-track pension system is expected to break the title this year.

Multi-annual announcement of pension "combination" plan

In January 2015, the State Council issued the "Decision on the Reform of the Endowment Insurance System for Staff of Institutions and Institutions", which requires that "each region and department shall formulate specific implementation opinions and measures in accordance with this decision and report it to the Ministry of Human Resources and Social Security and the Ministry of Finance Implementation after filing ".

Subsequently, the Ministry of Human Resources, Social Security and the Ministry of Finance issued the "Regarding the Implementation of the" Decision of the State Council on the Reform of the Endowment Insurance System for Staff of Institutions and Institutions "

Notice "clarified the relevant timetable, requiring all localities to submit proposals before the end of May this year. Now that the limit has passed, reporters from Chinanews.com have noticed that Shandong, Sichuan, Shanghai, Jiangsu and other places have successively announced specific implementation opinions and measures.

Among them, the pace of reform in Shandong has been at the forefront of the country. On July 28, following the announcement in February of this year of the "Implementation Opinions on the Reform of the Endowment Insurance System for Staff of Institutions and Institutions", Shandong Province issued the "Implementation Measures for the Reform of the Endowment Insurance System for Staff of Institutions and Institutions in Shandong Province", which further clarified The related supporting policies for reforms marked the formal start of the combination of pensions in Shandong Province.

On July 31, Jiangsu Province issued the "Implementation Opinions of the Jiangsu Provincial Government on the Reform of the Endowment Insurance System for Staff of Institutions and Institutions"; on July 15, Shanghai issued the "Implementation of the State Council's Endowment Insurance System for Staff of Institutions and Institutions" Reform Decisions> Implementation Measures. In March, Sichuan also issued related opinions.

The main contents of the implementation opinions of the above-mentioned "local version" are consistent with the provisions of the "national version", that is, starting from October 1, 2014, institutions and institutions have established the same unit and personal pension insurance payment system as enterprise employees. Government agencies and institutions pay 20% of their total wages, and individuals pay 8% of their wages.

Decide on the base of individual payroll

After the pension is "combined", nearly 40 million government agencies and institutions will bid farewell to the "free of charge" era. For these people, one of the biggest concerns is how much pension insurance they have to pay each month.

In fact, how much an individual's contribution is related to the base of paid wages, but local regulations on the determination of the base of individual paid wages are different.

Among them, Shandong Province stipulates that the personal payment base of employees of government agencies (including public participation units) includes: the basic salary of their previous year's salary income, the unified subsidy subsidy of the state, the standardized subsidy subsidy (regional supplementary allowance), and One-year bonus at the end of the year; the personal payment base of the staff of the public institution includes: the basic salary of the previous year's salary income, the state's unified subsidy and performance salary.

In Shanghai, it is clear in the implementation measures that the individual payment base is determined by my monthly average income in the previous year.

It can be seen that local policies are not consistent, and the level of payment will also be different. But from a national perspective, how much will the average monthly payment reach? According to media reports, when the Shaanxi Finance Department interpreted the "Decision on the Reform of the Endowment Insurance System for Staff of Institutions and Institutions" earlier this year, it disclosed the level of payment designed by the central government.

At that time, the report pointed out that, in order to realize the simultaneous advancement of the reform of the pension system of government agencies and institutions and the improvement of the wage system, the central government determined that starting from October 1, 2014, the monthly basic salary standard for serving staff in government agencies and institutions nationwide will increase by about 1,200 yuan per month ( The average data will vary from individual to individual.) Among them: the pension insurance system reform will pay about 600 yuan for individuals (about 400 yuan for personal account pensions and 200 yuan for individual occupational annuities), which will be included in subsidies or performance wages About 300 yuan, the actual net capital increase is about 300 yuan.

Some people "do not pay", officials take measures

In fact, in order to reduce the difficulty of "combining" pensions and ensure the smooth progress of reforms, the salaries of staff of institutions and institutions have also been adjusted simultaneously.

"As of the end of July, the cashing of the adjustment of basic wages by government agencies and institutions has been fully completed." The Ministry of Human Resources and Social Security recently notified that this time the basic wages of all personnel have been increased. Due to the simultaneous advancement of capital adjustment in conjunction with the reform of the pension insurance system, and the large difference in individual contributions to pension insurance due to individual contributions, specific to individuals, the actual increase in wages after deducting individual contributions from pension insurance is small.

The reporter noticed that some regions that have not officially implemented pension reform have taken pre-emptive measures. Among them, Hunan made it clear that for the salary adjustment of in-service employees, it will be issued in advance at the standard of 300 yuan per person per month, and will be refunded and supplemented when the endowment insurance reform of the provincial institutions and institutions is formally implemented.

In some areas with higher income levels, some people who work late and have lower positions do not have enough wages to fully compensate for the personal contributions of pension insurance.

The reporter saw from a salary calculation form obtained by a Beijing government agency that the staff and deputy staff of the unit were in a state of "increasing or not paying", and their basic wages increased by 866 yuan and 984 yuan, respectively, and Tianjin subsidies decreased by 250 Yuan and 290 yuan, respectively deducting insurance premiums of 642 yuan and 720 yuan, the difference between capital increase and payment is -26 yuan.

However, the Ministry of Human Resources and Social Security explicitly demanded that there is no case of no increase in wages. The reporter noticed that the unit paid a temporary subsidy of 126 yuan to each of the section staff and the deputy section, so the section staff and deputy section actually increased the capital by 100 yuan.

Zhang Zude, deputy director of the Beijing Municipal Bureau of Human Resources and Social Security, revealed on July 29 that due to the simultaneous implementation of the salary adjustment of government agencies and public institutions and the endowment insurance, some groups will show "increased or non-payment". To avoid this situation, the Beijing Municipal Human Resources and Social Affairs Bureau The Ministry of Human Resources and Social Security and the Ministry of Finance were asked to formulate a solution in Beijing to ensure that the wages of each staff member did not fall, while at the same time slightly increasing, the level was around 100 yuan per capita.