This year, the personal pension will be fully implemented, and the full amount will be bought for 15 years, is it enough to provide for the elderly?
The current personal pension is only piloted in 36 regions, and from 2022, participants in most parts of the country will not be able to enjoy the personal pension yet.
Data from the Ministry of Human Resources shows that there are currently more than 50 million people with open accounts, but the actual number of taxpayers is not that high.
According to the data of the Ministry of Human Resources and Social Security as of the end of June 2023, the proportion of effective taxpayers is 31%, with a total of 18.2 billion, and the per capita surplus is only 2022.
The implementation of a new system, after the pilot phase, will be rolled out on a wider scale if the desired results are achieved. So, after two years of piloting, will the personal pension system be fully implemented this year? Has the Ministry of Human Resources and Social Security made it clear that the total amount of personal pensions purchased for 15 years is sufficient for the elderly?
Can personal pensions be fully implemented this year? The Ministry of Human Resources and Social Security made it clear.
At a press conference on January 24, the Ministry of Human Resources and Social Security (MOHRSS) said that in the next work plan for the fourth quarter of 2023, it will continue to expand the coverage of enterprise annuities and promote the full implementation of the personal pension system.
This statement by the Ministry of Human Resources and Social Security has two meanings, one is to extend the company's rent, and the other is that personal pensions will be fully implemented this year.
Why does HHS say that? Now let's break it down.
The first is the enterprise annuity. Enterprise annuity includes enterprise annuity and occupational annuity, occupational annuity is an iron rice bowl in annuity organizations and government institutions, and it is OK to pay for insurance. The enterprise annuity is different, at present, most of the insured units are state-owned central enterprises, and the number of insured people is not very large.
The adverse consequences of a small number of insured companies are obvious. In China, the basic pension is the first pillar of the pension, the enterprise annuity is the second pillar, and the development of the second pillar assets directly affects the treatment of pensioners. Therefore, the Ministry of Human Resources and Social Security must strengthen the work of enterprise annuity in this regard.
The second is the issue of personal pensions. This is the third pillar of pensions, and after the trial, there is also an urgent need for full implementation to increase the pension level of future pensioners.
The above-mentioned issues related to corporate pensions and personal pensions are still very important and need to be broadened to include a set of data as soon as possible, but the urgency can also be seen.
According to the relevant report released by the Chinese Academy of Social Sciences, China's pension replacement rate has been declining in recent years, reaching 72 in 20029%, compared to 57 in 20055%, compared to 50 in 20113%, the current replacement rate is less than 50%, and according to the standards of the International Labour Organization, the pension replacement rate should not be less than 55%, which is also considered staggering.
Below the threshold of 55%, the quality of life of pensioners will not be guaranteed.
Therefore, this set of data on the pension replacement rate also shows the need for a full implementation of individual pension schemes.
Is it enough to buy a 15-year pension in full?
Personal pension is not available to everyone, but whether it is the basic pension insurance for residents or the basic pension insurance for employees, those who participate in the basic pension insurance should enjoy the personal pension.
Currently, the annual contribution cap is 12,000, and there is no news yet that this cap will change.
How much pension will I receive when I retire if I buy 15 consecutive years of lump sum payments?
Let's say you choose 2With a pension yield of 5%, why not choose a different number? Because the current rate of return on a three-year fixed deposit for a personal pension is 235%, and the banks have been cutting interest rates, so the future yield is not certain, and the yield cannot be overestimated.
Buy it for 15 years in a row, and after 15 years, you'll have about 2150,000 interest, of which 180,000 is the principal, 350,000 is income.
When you retire, you can receive it monthly, in installments, or as a lump sum. Due to the need to pay taxes, the tax rate is the highest for a lump sum payment. If you receive a monthly pension in 120 installments over 10 years, you will receive 179,200 per month without taking into account personal income tax, which is equivalent to a personal pension of 179,200 per month in addition to the basic pension.