Pension contributions are rising every year, do you know how?

I have a self-employed friend who doesn't understand the annual increase in pension contributions. Because I know that the author is familiar with social security knowledge, I ask why the pension contributions increase every year, and how does it increase? To put it simply, the pension contribution increases every year, but the pension contribution base increases, so the pension contribution will increase. So how is the pension contribution base determined?

Article 12 of the Social Insurance Law of the People's Republic of China, which came into effect on July 1, 2011, stipulates the payment base for endowment insurance:

Employers shall pay basic endowment insurance premiums in accordance with the proportion of the total wages of their employees as stipulated by the state, and shall be credited to the basic endowment insurance pooling fund. Employees shall pay basic endowment insurance premiums in accordance with the proportion of their own wages as prescribed by the state, and shall be credited to their personal accounts.

Individual industrial and commercial households without employees, part-time employees who do not participate in the basic endowment insurance in the employing unit, and other flexible employees who participate in the basic endowment insurance shall pay the basic endowment insurance premiums in accordance with state regulations, and shall be credited to the basic endowment insurance pooling fund respectively. and personal accounts.

According to this regulation, the pension contribution base of the employees of the insured enterprise is the total monthly salary income of the employee, and the unit contribution base is the total monthly salary of all employees of the enterprise. Contributors feel that the pension has increased, but in fact, the personal contribution base has increased, because your personal contribution ratio is basically fixed. If the contribution base increases, your monthly contribution will increase. If you work in a unit and your monthly salary increases, the pension you should pay will increase.

Individual industrial and commercial households without employees, part-time employees who have not participated in the basic endowment insurance in the employing unit, and other flexible employment personnel (hereinafter collectively referred to as flexible employment personnel) who participate in the basic endowment insurance, the payment base is stipulated by the state, and is based on the basic endowment insurance. 100% of the average monthly salary of on-the-job employees in the province (city, autonomous region) in the previous year is the payment base, and the payment is made according to the prescribed proportion.

With the development of China's economy and society, the average salary of on-the-job employees in each province (city, autonomous region) is rising every year, and the contribution ratio is basically fixed, so the pension paid by individuals will increase.

After talking about so many theoretical policies, some friends may not understand it. The author will give an example. For example, the average monthly salary of employees in Chongqing in 2015 was 5,175 yuan, which was used as the payment base for flexible employees in Chongqing in 2016. Flexible employees can choose the payment base according to 60%-300% of this payment base. The gold contribution rate is 20%. If someone chooses the minimum contribution base of 60%, then his final contribution base for the year is 517560%=3105 yuan, then the person's monthly pension contribution in 2016 is 310520%=621 yuan. By analogy, the average monthly salary of employees in Chongqing in 2016 was 5,616 yuan, and the same minimum payment base was selected. Calculated by the above method, the monthly pension contribution in 2017 was 673.92 yuan. This is why the insured contributors feel that their pensions are rising every year, because the average monthly wages of employees in the previous year have risen, so the pension contributions have increased accordingly.

Of course, there is no need for those who participate in the insurance payment, because according to the "Social Insurance Law" and related documents, the higher the payment, the longer the payment period, the greater the personal account balance, and the higher the pension benefits enjoyed after reaching the statutory retirement age. , the lower the pension contribution, the lower the pension benefits enjoyed in future retirement.