The relationship between the length of service and the pension after retirement is indeed very huge, but the current length of service and the past length of service is not the same concept, according to the old system for retirees, the pension is calculated according to the proportion of the length of service, such as more than 35 years of service can be paid according to 90% of the original salary.
The pension insurance for employees of mainland enterprises has been implemented since 1992, and the pension insurance for the staff of government institutions and institutions has been implemented since October 2014.
Before the implementation of the pension insurance system, the length of service mainly refers to the number of years of service recognized by the state, such as the length of service in state-owned enterprises, the length of service in government agencies and institutions, and the number of years of service in the army. After the implementation of the old-age insurance system, the length of service is calculated by the number of years of payment, and the payment period of the basic old-age insurance for urban workers can be calculated as the payment period and the retirement service, and it is no longer divided into the system or outside the system, and the concept of length of service is the same.
Before the implementation of the pension insurance system, the payment period is calculated according to the length of service, but the length of service should be strictly identified, only the recognition of the length of service or working years recognized by the state, after the implementation of the pension insurance system can be recognized as the payment period, which is what we call the deemed payment period.
The length of service will only have an impact on the level of pension if it is converted into the number of years of payment; The length of service that cannot be converted into a deemed contribution period has no effect on the level of pension. At most, it is a little more seniority pay, or a measure of the length of time worked in the unit.
The way to convert the length of service into the number of years of payment is the deemed years of payment, and there are two ways to convert the length of service into the number of years of payment. First, the length of service is recognized as the number of years of service recognized by the state; Second, after the implementation of the old-age insurance system, the basic old-age insurance for urban workers has been paid, including the basic old-age insurance for employees of enterprises or the basic old-age insurance for government agencies and institutions, and the payment of old-age insurance for urban and rural residents cannot be regarded as the payment period.
The calculation of the employee's payment period at the time of retirement includes the deemed payment period and the actual payment period, and the longer the payment period, the higher the pension will be, which is generally accepted by everyone. However, since the calculation of pension is not only the length of service, that is, the single factor of the number of years of payment, but also the contribution index, personal account balance, etc.
The impact of the payment period on the pension is mainly reflected in the basic pension and the personal account pension, but if it is regarded as the payment period, the impact is mainly on the transitional pension. For example, at present, among the retirees of government agencies and institutions, due to the lack of time in the implementation of the pension insurance system, the staff is regarded as having a relatively long payment period after retirement, and the cumulative payment period is about 35 or 40 years, which is a more important part of the pension of retirees in government organs and institutions.
Employees working in private enterprises or flexible employees, many of them have only 15 years of contributions, so the current pension of these people is relatively low. There are two main factors for people with low pensions. First, the payment period is generally less than 20 years, and the average payment index is generally around 0.6.
However, the employees working in private enterprises or some flexible employment personnel also have a relatively long payment period, these people are in the government institutions or state-owned enterprises have worked in the background, before leaving the post have a relatively long working years, they from the government institutions or resignation, because the previous years of service should be regarded as the payment period, so the pension of this part of the people is higher than many people who retire under the same conditions.
The impact of length of service on the basic pension is mainly that the basic pension is calculated according to the pension of 1% for each year of contributions. This 1% is calculated according to the pension calculation base, the average contribution index of the person and the indexed contribution salary formed by the pension calculation and payment base.
For example, in 2023, the pension calculation base in Sichuan is 8079 yuan, if the average payment index is 1.2, then the indexed payment salary is 9694.8 yuan, and the average value obtained after adding and dividing by 2 with the pension calculation base of 8079 yuan is 8886.9 yuan, multiplied by 1% is 88.869 yuan, and this 88.869 yuan is the base for each year of payment.
If the payment period is 15 years, the monthly basic pension is 1333.035 yuan, if the payment period is 30 years, the basic pension is 2666.07 yuan, and if the payment period is 35 years, the monthly basic pension is 3110.415 yuan.
From this example, it can be seen that under the same conditions, the longer the payment period, the higher the monthly basic pension, which shows that the impact of the payment period on the basic pension is very large.
In addition to calculating the cumulative payment period to affect the basic pension, the deemed payment period also affects the transitional pension, the longer the deemed payment period, the higher the transitional pension will be, and the deemed payment period is determined by the length of service.
Based on the pension calculation base of 8,079 yuan in Sichuan in 2023, according to the calculation method of the deemed payment period of Sichuan Provincial Organs and institutions, the transitional pension is equal to the pension calculation base of 8,079 yuan multiplied by the deemed payment index of 1.2, multiplied by the deemed payment period, multiplied by the transition coefficient of 1.4%.
If the deemed contribution period is 15 years, the monthly transitional pension is 2035.908 yuan, if the deemed contribution period is 20 years, the monthly transitional pension is 2714.544 yuan, and if the deemed contribution period is 30 years, the monthly transitional pension is 4071.816 yuan. Judging from this calculation method, the longer the deemed payment period, the greater the impact on the transitional pension.
To sum up, the length of service, if it is a continuous length of service or working years recognized by the state, after the implementation of the pension insurance system, it should be regarded as the payment period, and after the length of service is converted into the deemed payment period, it should be calculated as the payment period cumulatively with the actual payment period. Under the same conditions, the longer the payment period, the greater the impact on the level of pension. It is an indisputable fact that the longer the contribution period, the higher the pension.