What does the principal of pension account mean?

The principal of the basic old-age account refers to the part included in the personal account when the unit pays the old-age insurance. The personal account of endowment insurance bears interest, which is not lower than the bank time deposit rate, and is also exempt from interest tax. The basic pension will be determined according to the individual's accumulated payment period, payment salary, average salary of local employees, personal account amount, average life expectancy of urban population and other factors.

Pension account is a kind of personal savings account, which is usually set up by individuals and units that pay endowment insurance premiums. The main process of pension account is as follows:

1. Payment of endowment insurance premium: The principal of the endowment account is usually accumulated by the endowment insurance premium paid by individuals and units. According to different countries and regions, the payment ratio and standard of endowment insurance premium will be different;

2. Transfer to pension account: the paid pension insurance premium is collected by social security department or insurance company and transferred to individual pension account. According to the regulations of different countries and regions, pension accounts may be managed by the government or financial institutions;

3. Investment operation: The management organization of pension accounts usually invests the funds in the accounts to achieve income growth. The mode and scope of investment operation also vary from country to country and region;

4. Accumulated principal: The principal of the pension account will be gradually accumulated through payment of endowment insurance premium and investment operation. As time goes on, the principal will increase;

5. Retirement: When an individual retires, the principal in the pension account can be used to pay pension and medical expenses. The specific collection methods and standards depend on the old-age security systems and policies of different countries and regions.

To sum up, the principal flow of pension accounts in different countries and regions may be different, and the local pension insurance policies and relevant laws and regulations need to be consulted for specific conditions. At the same time, the principal flow of pension account is also affected by many factors, such as age, wage income, investment income and so on.

Legal basis:

Article 2 of People's Republic of China (PRC) Social Insurance Law

The state establishes social insurance systems such as basic old-age insurance, basic medical insurance, industrial injury insurance, unemployment insurance and maternity insurance, so as to guarantee citizens' right to receive material assistance from the state and society in accordance with the law when they are old, sick, injured, unemployed and have children.

Article 14

Personal accounts shall not be withdrawn in advance, and the bookkeeping interest rate shall not be lower than the bank time deposit interest rate, and interest tax shall be exempted. If an individual dies, the balance of the individual account can be inherited.