As October 2024 approaches, many employees of government and public institutions are concerned about whether their retirement pensions will be reduced. In fact, such worries are unnecessary. The reason is a misunderstanding of the meaning of the ten-year transition period.

What is the ten-year transition period?

After the reform of the pension insurance system for government and public institutions was implemented in October 2014, to prevent the implementation of the new pension calculation method from causing some retirees to receive excessively high pensions while others see a decrease, leading to significant changes and impacts, the state established a transition period from October 2014 to September 2024.

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During the transition period, retirees are compared between the new and old methods of calculating retirement benefits based on their retirement dates. If the old method results in a higher retirement benefit, the retirement benefits are paid according to the old method. The old method of calculating retirement benefits is determined based on factors such as the individual's position and level in September 2014, and also takes into account subsequent promotions. This is essentially similar to the retirement benefit determination model for retirees before the end of September 2014. In other words, efforts are made to ensure that the pension benefits of retirees after October 2014 are not lower than those of retirees before that date.

If the new method results in a higher retirement benefit, it does not mean that the retirement benefits will be paid according to the new method. Instead, a certain proportion of the excess amount from the new method over the old method is paid based on the retirement date. For those who retired before December 2015, the payment ratio is only 10%, and the payment ratio increases by 10% for each year later, until 2024, when retirees will receive 100% of the payment ratio, i.e., according to the new method of retirement benefits.

Transitional pension in the new method?

The transition period and transitional pension are not related. The transitional pension actually refers to a compensatory pension mechanism established for the lack of personal account accumulation for pension insurance and occupational annuity before the end of September 2014.

As long as there is a corresponding deemed contribution period before the end of September 2014, the transitional pension will be calculated until all individuals retire. That is to say, the pension for the deemed contribution period is composed of the basic pension and the transitional pension, while the pension benefits for the actual contribution period generated by current payments are composed of the basic pension + personal account pension + occupational annuity.Will the pensions of retired civil servants and public institution workers decrease?

For retired civil servants and public institution workers, it is actually since 2016 that the state has implemented a unified adjustment for retired personnel from both enterprises and public institutions. The state clearly defines the overall level of pension adjustment, and specifically adopts three methods: fixed amount adjustment, linkage adjustment, and appropriate inclination.

Generally speaking, through the above three methods of pension adjustment, the increase ratio for groups with lower pension levels will be higher. The state is also gradually narrowing the gap in pension levels through such adjustments. However, the basis for pension adjustment is fairness, with incentives for more contributions and longer contributions, as well as inclination adjustments for elderly people and those in remote and arduous areas. As long as the same conditions are met, retired civil servants and public institution workers with higher pensions will still receive more money.

Overall, pensions after retirement are continuously increased according to the Social Insurance Law, based on the rise in workers' wages and the cost of living, and it is impossible for them to decrease.

However, it is also important to understand that the supplementary pension mechanism, such as occupational annuities, will cease once the individual account is exhausted. In recent years, the amount of occupational annuities received by retired personnel has not been high, and the impact is not significant. Moreover, occupational annuities can also be used to purchase commercial life insurance to receive benefits for a lifetime. #Top Headline Creation Challenge# #How will pensions be supplemented for retired personnel during the 10-year transition period?#