The national overall plan will be launched next year, what changes will be ushered in the pension payment? 2022 pension reform

  According to the established timetable, the national co-ordination of the basic pension insurance for enterprise employees will be officially implemented early next year. This marks the 24 years since the establishment of the employee pension insurance system in my country, it has finally stepped out of regional division and entered an era of national unification.

  Realizing the national overall planning of the basic endowment insurance for enterprise employees is one of the important tasks of my country's endowment insurance system reform during the "14th Five-Year Plan" period.

This year's Central Economic Work Conference once again proposed "promoting the national overall planning of basic pension insurance."

Recently, the State Council has made special arrangements for the overall implementation of basic pension insurance for enterprise employees across the country.

  China Business News learned from people familiar with the matter that the spirit of the document of the "National Overall Reform Plan for Enterprise Employees' Basic Pension Insurance" will be issued soon.

Prior to this, Jin Weigang, vice president of the Chinese Society of Social Security, also publicly stated that my country will implement the national overall plan for the basic endowment insurance for enterprise employees from January 2022 (hereinafter referred to as the “national plan for pension insurance”).

  Many experts interviewed by China Business News stated that national co-ordination of pension insurance is the only way to build a fair and sustainable pension insurance system.

After the overall implementation of the national plan, the pension insurance fund can help each other's surplus and vacancies across the country, and the fund's supporting capacity will be greatly enhanced.

For insured persons, pensions are more secure, portability is greatly improved, and the gap in pension levels between regions will also be reduced.

The core of national overall planning is unified revenue and expenditure

  The low level of overall planning is a long-term problem that has plagued the development of the pension insurance system for employees of Chinese enterprises.

At the beginning of the establishment of the enterprise employee endowment insurance system, the State Council required all localities to actively create conditions to raise the level of pension funds.

However, the overall planning level based on counties and cities did not really change until 2018.

  In 2018, my country established a central adjustment system and set a timetable for the completion of provincial-level coordination.

From 2018 to 2020, the Ministry of Human Resources and Social Security has accelerated the progress of guiding and urging provinces to establish a provincial-level overall planning system. According to the Ministry of Human Resources and Social Security, all provinces have started to implement the unified income and expenditure of pension insurance funds at the provincial level.

  The fundamental reason for the acceleration of provincial overall planning is the increasing pressure on the income and expenditure of my country's pension insurance funds. With the intensification of the aging population, the burden of support in my country's pension insurance has increased.

Relevant data shows that in 2020, the support ratio of on-the-job contributors to retirement recipients is 2.57:1, pension insurance fund income is 4,437.6 billion yuan, expenditure is 5,130.1 billion yuan, and the income and expenditure gap is 692.5 billion yuan.

  The support burden in the central and western regions is heavier, and the pressure on pension payments is even greater.

After the establishment of a true provincial-level overall plan, the “reservoir” of provincial pension funds will become larger, and the regional imbalance of pension funds in the province can be alleviated.

  Kong Xianjiang, director of the Social Insurance Bureau of Shanxi Province, wrote an article in September this year that some cities and counties’ pension insurance funds are not paid for. The enterprise pension insurance funds are managed centrally at the provincial level, and the “receipts and expenditures” are fully paid. Implementation has solved the problem of "guaranteed distribution" in these counties and cities.

  Take Yangquan City as an example. In 2020, the state will fully implement the phased reduction and exemption of three social insurance premium policies. The basic pension insurance premiums for employees in Yangquan City are only 1.907 billion yuan, while the fund payment is as high as 3.486 billion yuan, and the income and expenditure gap is up to 1.579 billion yuan.

The provincial level coordinated to solve the problem of insurance issuance in Yangquan City.

According to the provincial-level government gap-sharing mechanism at all levels, the Yangquan county government subsidized 79.03 million yuan in the gap fund, which enhanced the sustainability of the fund.

  Kong Xianjiang said that with the intensification of population aging, the gap in Shanxi's pension insurance fund has been increasing year by year, and the growth of expenditure is significantly higher than the growth of income. It is urgent to achieve national overall planning on the basis of consolidating provincial-level overall planning.

  The core of the national pooling is that the pension insurance fund unified revenue and expenditure at the central level, making the "reservoir" bigger.

However, under the condition that the unified revenue and expenditure at the provincial level have not yet been achieved, it is difficult to achieve national overall planning of unified revenue and expenditure.

As a result, the central government first introduced the central adjustment system.

In the past three years, the central adjustment system has played an important role.

  Minister of Finance Liu Kun said that starting in 2018, China has established a central adjustment system for pension insurance funds to balance the burden of funds between regions.

This year, the scale of the central adjustment fund reached 930 billion yuan. The central and western regions and the old industrial base provinces benefited more than 215 billion yuan, which to a certain extent eased the pressure on the balance of payments in difficult areas.

  Dong Dengxin, director of the Institute of Financial Securities, Wuhan University of Science and Technology, told that in the past three years, the government has done a series of transitional work for the national coordination, including central adjustment, provincial coordination, state-owned assets transfer, and social security expenses. The tax authorities collect and pay in a unified way, and these tasks have now been completed, laying the foundation for realizing unified national revenue and expenditure.

  "National overall planning is conducive to exerting the scale effect of the fund, and complementing the surplus and deficits across the country. The core is the central government's unified revenue and expenditure, and local governments no longer intervene in the fund's revenue and expenditure and related management work." Dong Dengxin said, due to historical problems. To upgrade from provincial overall planning to national overall planning, a financial payment sharing mechanism is needed to make the transition, but the ultimate goal is to coordinate revenue and expenditures by the central government.

  In an interview with the media affiliated to the Ministry of Human Resources and Social Security, Jin Weigang stated that in accordance with the central government’s guidance and work arrangements on the implementation of the national overall plan for the basic pension insurance for enterprise employees, based on the implementation of the central adjustment system for the basic pension insurance for enterprise employees, it will start from January 2022. Begin to implement the national overall plan for the basic endowment insurance for enterprise employees.

In the future, it will gradually promote the development of national overall planning towards unified revenue and expenditure, and on this basis, realize the comprehensive unification of the basic pension insurance system, policy, and management services for enterprise employees, including the realization of the payment ratio, the calculation and distribution base, and the fund. The revenue and expenditure management, information system, budgeting and other aspects are unified.

How to affect pensions

  The video and telephone conference on the national overall implementation of basic endowment insurance for enterprise employees held on the 16th proposed that the implementation of the national overall implementation of basic endowment insurance for enterprise employees is a major decision and deployment made by the Party Central Committee and the State Council.

This work concerns the vital interests of the vast number of employees and thousands of households, as well as the overall stability of the society.

  The meeting also proposed that it is necessary to unify the pension insurance policy and achieve a "national chess game" to better protect the pension insurance rights of workers and retirees.

  Sun Yongyong, an associate professor at the School of Public Administration of Central China Normal University, told China Business News that the national overall planning is mainly for the financial consideration of the pension insurance fund, and has no direct impact on the insurance participation or payment of the insured.

For the distribution of pensions, national overall planning can better guarantee the timely and full distribution of pensions in all regions.

  Sun Yongyong believes that "a game of chess across the country" refers to the emphasis that the funds for basic pension insurance for employees should be adjusted and used across the country to improve the efficiency of fund utilization; second, the relevant rules will gradually be unified.

"But it doesn't mean that the treatment is unified, because the economic development status of different regions is quite different, and it is difficult to achieve the same treatment within a province."

  Wang Dehua, a researcher at the Institute of Financial and Economic Strategy of the Chinese Academy of Social Sciences, told China Business News that an important issue in national coordination is how to determine the "average social wage", an important parameter for payment and benefits.

The provinces generally adopt the unified method of the whole province when implementing it, but it is not known whether the unified plan is necessary for the whole country.

  Wang Dehua believes that after national overall planning, all provinces should adopt the social average wages of all provinces, and at the same time design the system for the transfer and continuation of social average wages between regions.

  When CBN consulted the documents of local provincial-level overall planning, it was found that most provinces used the average salary of full-caliber urban unit employees in the province in the previous year as the basis for the calculation and payment of pensions.

  Dong Dengxin believes that after the national overall planning of the basic pension insurance for employees, the basic variables of pensions will be calculated based on the average wages of on-duty employees in the country. Then the pension is calculated based on this base, and the level of pensions in high-wage areas will be higher. As a result, the overall pension level of low-wage areas may be pulled up, but this means that the relative gap between the highest and lowest pensions in the regions as a whole will narrow. As far as individuals are concerned, the monthly pension level of retirees is different. There will be a significant decline, and the absolute number should rise slowly.

  Another benefit for insured persons after the national overall planning is that the portability of pension insurance has been greatly improved. According to the current provincial-level overall planning standards, inter-regional migrants in the province will no longer go through the transfer and continuation procedures, and they will be consolidated by the place of receiving benefits when they retire. After the national overall plan is implemented in the future, domestic inter-provincial migrants will no longer need to go through the transfer and continuation procedures. This is a great benefit for my country's 236 million migrant population.

(Author: Guo Jinhui)