The pension system is a social security system established by the state to ensure that citizens can maintain their basic livelihood when they are old. It usually consists of two parts: a basic pension and a personal account pension. The basic pension is provided by the state treasury, while the personal account pension is accumulated from the pension insurance contributions paid by the individual during the working period.
This means that the pension insurance fees we pay every month are actually saving funds for our future pension life.
The role of the individual component in the total pension amount.
The personal component plays a crucial role in the total pension amount. Here are a few of the main roles of the individual component in the total pension:
1.Fund**.
The personal part is an important part of the total pension, which comes from the pension insurance contributions paid by the individual during the working period. These expenses are accumulated to form a personal account pension that provides financial support for an individual's retirement life.
2.The strength of old-age security has been enhanced.
The cumulative amount of the individual portion will directly affect the level of the individual's pension after retirement. The more pension insurance premiums are paid, the higher the cumulative amount of the individual part, and the stronger the pension security provided. This means that by actively paying pension insurance contributions, individuals can create a more stable and comfortable retirement life for themselves.
3.Institutional incentives.
The presence of the personal component also motivates individuals to actively contribute to pension insurance during their working years. Because individuals are well aware that these expenses will be directly converted into their own future pension income. This kind of institutional incentive helps to cultivate personal awareness of long-term pension planning and promote social stability and sustainable development.
4.More flexibility.
Compared with the basic pension, the use of personal account pension is more flexible. After reaching the statutory retirement age, you can choose to receive a one-time pension or receive a personal account pension in installments according to your personal needs. This flexibility allows the individual component to better meet your individual retirement needs.
Suppose Ms. Li has paid pension insurance premiums for a total of 20 years during her employment, and the annual amount paid is 8,000 yuan. Then, after reaching the statutory retirement age, Ms. Li's personal account pension will accumulate to 160,000 yuan (20 years x 8,000 yuan a year). This fund will serve as an important economic factor for Ms. Li's retirement**, and together with the basic pension, it will provide her with stable income security.
Social Insurance Law of the People's Republic of China: This law clearly stipulates the key contents such as the payment standard of pension insurance, the accumulation and receipt of pension in personal accounts, and provides a legal basis for the management and use of individual parts.
Interim Measures for the Management of Personal Accounts of Basic Pension Insurance for Employees of Enterprises: The Measures stipulate in detail the specific operation procedures for the establishment, bookkeeping, transfer and payment of personal accounts, and ensure the safe and effective management of individual parts.