As we enter the second half of 2024, it is indeed the case that some retirees will experience a recalculation of their pensions for the second time. This recalculation is distinct from the pension increase that occurred in July.

Why will some retirees undergo a second recalculation of their pensions?

At the root of this issue is that some retirees are receiving provisional pensions. The primary situation involves individuals who retired since January 2024; their pensions were calculated using the social average wage or the pension payment base from 2023.

As the year progresses into the second half, new annual social average wages or pension payment bases will be announced in various regions, leading to a recalculation of these retirees' pensions.

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For example, let's examine the pension calculation formula for retirees in Shandong Province:

Pensions mainly consist of three parts: the basic pension, the personal account pension, and the transitional pension. Both the basic pension and the transitional pension are linked to the social average wage of the year prior to retirement. The social average wage used for pension calculation in Shandong Province for the year prior to retirement is temporarily referred to as the pension payment base for that year. In 2023, the pension payment base in Shandong Province was 7,468 yuan (with two other specific groups using 7,682 yuan and 7,069 yuan).

Suppose a retiree is eligible to receive 30% of the pension payment base for the basic pension and 5% for the transitional pension. With the current calculation using 7,468 yuan, the result is 2,613.8 yuan.

It is anticipated that the pension payment base for 2024 will be announced around November (based on last year's announcement timing), with a growth rate of approximately 3.2%, estimated to be 7,707 yuan. After the pension is recalculated, the result will be 2,697.45 yuan.

Upon comparison, the monthly pension will increase by 83.65 yuan, and the difference will be retroactively paid from the month the pension is received.Of course, some provinces may have complex situations where the treatment of old and new methods for retired personnel in government and public institutions has not been properly aligned. As long as it involves the issuance of temporary pensions, after the alignment, recalculations will be made and any differences will be paid out.

What is the difference with the increase in pensions?

The increase in pensions for the year 2024, for example, in Shandong Province, was announced on June 25th with an adjustment plan for pensions. The scope applies to elderly individuals who had completed retirement procedures and were receiving monthly pension benefits before December 31, 2023. The overall level of the pension supplement is about 3%, calculated uniformly starting from January 2024.

The adjustment of pensions for retired elderly is determined by each province's own pension adjustment plan, but it is generally conducted in three parts: fixed amount adjustment, linkage adjustment, and appropriate inclination. For instance, the pension adjustment plan in Shandong Province is as follows:

1. Fixed amount adjustment part, an increase of 32.6 yuan per person per month.

2. Linkage adjustment part based on payment duration, which increases the basic pension by 0.8 yuan, 0.9 yuan, 1.0 yuan, 1.1 yuan, and 1.2 yuan respectively for different payment duration segments of less than 15 years, 16 to 25 years, 26 to 35 years, 36 to 45 years, and over 46 years.

3. Linkage adjustment part based on the pension level, which is an increase of 0.9% of the individual's basic pension.

4. Inclination adjustment part for advanced age, for elderly individuals who are 70 years old, 75 years old, and over 80 years old, an increase of 10 yuan, 15 yuan, and 20 yuan in basic pension per person per month, respectively.Additionally, for retired elderly individuals in Shandong Province who reach the ages of 70, 75, and 80 within the year 2023, they can receive an additional pension increase of a certain amount per person per month.

For example, if a retired worker has a service period of 30 years and a basic pension of 3000 yuan, the increase in pension for the year 2024 would be a fixed increase of 32.6 yuan, an increase based on the number of years of contribution of 0.8 yuan × 15 years + 0.9 yuan × 10 years + 1.0 yuan × 5 years = 26 yuan, and an increase based on the pension level of 3000 yuan × 0.9% = 27 yuan. Without considering the adjustment for advanced age, the total increase would be 85.6 yuan, which is approximately a 2.85% increase.

Overall, the recalculation of pensions and the growth of pensions are indeed not the same thing, but both are essentially two systems established for the balance of retirement benefits. They ensure that retired elders can all enjoy the basic security provided by the state. #Top Headline Creation Challenge# #Pension Recalculation#