Brief introduction of basic old-age insurance system in China

The basic old-age insurance system in China is a combination of social pooling and individual accounts, which is enforced by the state. The endowment insurance fund is raised by individuals, enterprises and the state in the form of common burden, and the social pooling part is borne by enterprises and the state, and the personal account part is borne by enterprises and individuals in proportion.

Endowment insurance, also known as endowment insurance, refers to the social security system that the state legislates to collect social insurance premiums (taxes) and form pension funds. When workers retire, they pay pensions to ensure their basic needs. It is one of the important contents of social security system.

The basic old-age insurance, also known as the national basic old-age insurance, is an old-age insurance system that is enforced according to the unified national policy and aims to protect the basic living needs of retirees. Its coverage covers all urban enterprises and their employees, freelancers and urban individual industrial and commercial households.

At present, China's basic old-age insurance adopts the management mode of "unified account combination", which requires the insured units and individuals to pay 20% and 8% of the total wages respectively, participate in social overall planning and deposit them in individual accounts of employees respectively. People who have paid 15 years and reached retirement age can receive pension, and the calculation and payment method adopts the way of "new system for newcomers, old system for the elderly, and gradual transition for middle-aged people (insured persons who retire after the implementation of the new regulations)"

When the basic pension reaches 15, it will be paid to 15%, and one percentage point will be paid for each additional year, with no upper limit. The calculation base is the local average monthly salary of employees in the previous year and my indexed average monthly salary.

Personal account pension is calculated by dividing the amount of personal account storage by the number of months, and the number of months is calculated according to the average life expectancy of urban population when employees retire, their retirement age, interest and other factors. For China people, according to the principle of reasonable connection and smooth transition, transitional pensions are issued on the basis of basic pensions and personal account pensions, and the elderly are still partially solved by social pooling formed by enterprise contributions in the past.

Article 11 of the Social Insurance Law of People's Republic of China (PRC) stipulates that the basic old-age insurance shall combine social pooling with individual accounts. The basic old-age insurance fund consists of employers, individual contributions and government subsidies.

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.