Entering the year 2024, by October, the ten-year transitional period for government and public institution retirement systems will be coming to an end. After the end of the transitional period, the calculation of pension benefits will fully adopt the new method.

Some friends may not understand what the new method of retirement benefits entails and are unsure whether the pension will be higher for someone retiring in December this year compared to January next year.

New Method of Retirement Benefits for Government and Public Institutions

The new method of retirement benefits mainly consists of four parts: the basic pension, the personal account pension, the transitional pension, and the occupational annuity. The sum of the first three parts is referred to as the basic pension, while the occupational annuity is considered supplementary pension. The specific calculation formula can be referenced in the figure below:

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What if we retire one month later and it spans across the year? What would be the impact?

Firstly, the pension calculation will use a different pension payment base or average social wage. For retirement in 2024, the average social wage of 2023 will be used, and for retirement in 2025, the average social wage of 2024 will be used. There is generally a 4% to 5% difference between the two, but this varies by province. Additionally, some provinces follow the same pattern with the pension payment base.

However, for those retiring in 2024, they will participate in the pension adjustment for 2025. Even if the average social wage used in the pension calculation is slightly lower, there won't be a significant difference. If a detailed comparison is made, it becomes quite complex.

Secondly, the contribution period is affected. The contribution period includes both the deemed contribution period and the actual contribution period. If we make an additional month of pension insurance payments, the pension will certainly be higher.

For example, when calculating the basic pension, with a contribution period of 40 years and an average contribution index of 1, one can receive 40% of the average social wage. If we contribute for an additional month, the contribution period will become 40.833 years, and the basic pension will be 40.833% of the average social wage. If the average social wage is 10,000 yuan, the result would be an additional 8.33 yuan per month.Thirdly, the individual account of the pension insurance can accumulate more. Regardless of when one retires, as long as we participate in the pension insurance for a month, the money in the individual account of the pension can increase. Currently, 8% of the contribution base is entered into the individual account each month. If the contribution base is 10,000 yuan, an additional month of payment can accumulate 800 yuan in the individual account.

In addition, some interest is also calculated in the individual account of the pension insurance each month. Last year's accounting interest rate was somewhat low, only 3.97%. But even so, there is an interest of 0.33% per month.

Fourthly, the number of months for determining the retirement age is different. For the same person, if there is a difference of one month, the number of months used to calculate the individual account pension may be different. At the age of 59, it is 145 months, and at the age of 60, it is 139 months. The calculated individual account pension can have a difference of at least about 4.5%.

Fifthly, the accumulation and calculation of occupational annuity are also different. The accumulation of the occupational annuity is actually similar to the individual account pension. For each additional month of payment, the individual account can accumulate 4% + 8% of the individual contribution base. If the contribution base is 10,000 yuan, it can accumulate an additional 1,200 yuan in a month. In addition, there is also a certain investment return.

The number of months for receiving the occupational annuity is also calculated according to the model of the individual account pension, and changes will also occur.

The transitional pension is mainly affected by the change in the social average wage of the previous year or the pension calculation base of that year. Changes in the payment time will not have an impact.

Overall, the later one retires, the higher the pension will be. Especially when the pension insurance is increasing, it is possible that an additional month will be calculated as a year. #Headline Creation Challenge# #Pension#