In 2024, the pension adjustment plan will once again become a hot topic in society.
Shandong and Jiangxi took the lead in announcing this year's plan, which has attracted widespread attention.
In this era of increasingly aging population, pension adjustment undoubtedly affects the hearts of tens of millions of retirees.
As the saying goes, "raising children to prevent old age" has now become "relying on the state to provide for the elderly".
In the face of the complex adjustment plan, many people can't help but ask: Is this adjustment a relief or the icing on the cake? Will it really benefit those retirees who need it most?
1. Analysis of pension adjustment plans in Shandong and Jiangxi
Shandong and Jiangxi recently announced the 2024 pension adjustment plan, which has attracted widespread attention from all walks of life.
This adjustment mainly includes three aspects: quota adjustment, linkage adjustment and elderly tilt adjustment.
Detailed rules of Shandong plan:
- Quota adjustment: $32.6 per person per month.
- Peg Adjustment:
a) Seniority linkage: less than 15 years of service, 0.8 yuan per year, 16-25 years, 0.9 yuan per year, 26-35 years, 1 yuan per year, 36-45 years old, 1.1 yuan per year, over 46 years old, 1.2 yuan per year.
b) Pension level linkage: 0.9 per cent increase on the existing pension.
- Tilt for the elderly: Seniors over 70 years old will be given an additional 10-20 yuan.
Jiangxi program details:
- Quota adjustment: $26.5 per person per month.
- Peg Adjustment:
a) Seniority-linked: $0.8 per full year.
b) Pension level linkage: 0.9 per cent increase on the existing pension.
- Tilt for the elderly: Seniors over 70 years old will be charged an additional 35-50 yuan.
2. Adjust the trend of the program
Compared with last year's plan, we can find some noticeable changes:
First of all, the quota adjustment and peg adjustment standards have been lowered.
This means that most retirees are likely to increase their pensions by a little less than last year.
Second, the pegging percentage has been reduced to 0.9%, which is less than 1%.
Shandong fell to 0.9% from 1.25% last year, and Jiangxi fell from 1.2% to 0.9%.
This change has a greater impact on retirees with higher pension levels.
Finally, the tilt adjustment for advanced age remains the same, or even improved.
This reflects the special care for the elderly.
3. The impact of the adjustment program on different groups
The impact of this adjustment programme will be different for different groups.
We can illustrate this with a simple example:
Suppose there are two retirees:
- A is a retiree of the enterprise, with a pension of 2,000 yuan and 20 years of service.
- B is a retiree of a public institution with a pension of 6,000 yuan and 40 years of service.
According to Shandong's plan for this year, without considering the tilt of advanced age:
- A's pension will increase by 67.1 yuan (34.5 yuan linked adjustment + 32.6 yuan fixed adjustment), an increase of 3.4%.
- B's pension will increase by 123.1 yuan (90.5 yuan linked adjustment + 32.6 yuan fixed adjustment), an increase of 2%.
In contrast, A had an above-average increase (3%), while B had a below-average increase.
This shows that the new adjustment plan is to a certain extent beneficial to enterprise retirees with lower pension levels.
4. Analysis of the pros and cons of the adjustment plan
Merit:
- Contribute to narrowing the income gap among retirees.
- It is more beneficial for corporate retirees with lower pension levels.
- Special care for the elderly has been maintained.
Shortcoming:
- Overall increases are likely to be slower than in previous years, and it may be difficult to keep up with the pace of price increases.
- Not very beneficial for retirees with long working years and high pension levels.
- May affect the quality of life for some retirees.
5. The considerations behind the pension adjustment
Pension adjustment is a complex system project, which needs to consider many factors:
First of all, it is necessary to ensure the basic standard of living of retirees.
This is the basic goal of the pension system.
Secondly, it is necessary to consider the affordability of the pension insurance fund.
As the aging population intensifies, the pressure on pension expenditure is increasing.
Third, it is necessary to take into account social equity.
It is necessary to take care of the low-income group, but also not to discourage the enthusiasm of the high-income group too much.
Finally, it is necessary to match the level of economic development.
Pension growth cannot exceed economic growth and fiscal affordability.
6. Do corporate retirees really benefit more?
On the surface, this adjustment plan is indeed more beneficial to corporate retirees with lower pension levels.
But we also need to see that not all corporate retirees can benefit from this.
For example, some corporate retirees with long working years and high pension levels may have their pensions increased more than last year.
Therefore, we cannot simply say that corporate retirees as a whole are more beneficial.
7. What do you think about the reduction of the peg percentage?
The reduction of the linked percentage reflects a trend of pension adjustment policy: more attention is paid to ensuring the basics, rather than widening the gap.
This approach has its rationale: in the case of limited overall pension increases, by reducing the linked percentage, more funds can be used to ensure the basic livelihood of low-income groups.
But it also comes with some problems: it can discourage some people from working, and it can also cause dissatisfaction among high-income retirees.
8. Future Trends in Pension Adjustments
Judging from the trend in recent years, the pension adjustment presents the following characteristics:
- The overall increase is on a downward trend.
This may be related to the intensification of population aging and the increasing pressure on pension insurance funds.
- Pay more attention to the basics.
Adjustment programmes are increasingly geared towards accommodating low-income groups.
- Regional disparities persist.
Different provinces have different levels of economic development and pension insurance funds, resulting in different adjustment plans.
9. Advice on how to deal with declining pension increases
In the face of the trend that pension increases may continue to decline, retirees and those who are about to retire can consider the following suggestions:
- Plan your retirement and control your expenses appropriately.
- Consider participating in some part-time jobs that are suitable for seniors to increase your income.
- Pay attention to relevant national policies and keep abreast of various subsidies and benefits.
- Moderate investment and financial management to increase pension funds.
10. The future direction of the pension system
In the face of the challenge of population aging, the pension system in mainland China needs to be further improved:
- Establish a more scientific adjustment mechanism to make the growth of pensions compatible with economic development and price levels.
- Further improve the multi-level pension insurance system and encourage the development of personal savings and commercial pension insurance.
- Explore new pension models, such as "housing for the elderly" and "mutual assistance for the elderly", to provide more choices for the elderly.
- Improve the efficiency of the use of pensions, develop the "silver economy", and make the life of the elderly more colorful.
[I have to say]
The pension adjustment plans of Shandong and Jiangxi are like a mirror, reflecting the current situation and challenges of the mainland's old-age security system.
It is not only an economic issue, but also a social issue.
As the old saying goes, "the old and the old", pension is not only about individuals, but also about the harmony and stability of the whole society.
In the face of the challenge of population aging, we need the government, enterprises and individuals to work together to build a fairer and more secure pension system.
Let us work together to create a better society that respects, loves and provides for the elderly, and contributes to the happiness of every elderly person.