Pension “empty account” 4.7 trillion, we can get it?

5.5%, which is the society recently announced pension increases. A message is of more concern: pension payments “yellow light” personal account “empty account” 4.7 trillion.

Objectively speaking, increasing the pressure of aging today, realization of pension increases will not be easy. However, Wang (ID:banglicai) also noted that pension increases are already down for two consecutive years – in 2016, pensions dropped to 6.5% per cent, but prior to that, my pension for enterprise retirees standard has achieved a margin of about 10% for 11 consecutive gains.

Personal account of “empty account” means what? Means that if you do not use the young money in their personal accounts, pensions now will not be able to make ends meet. We work these young people a month pension did not enter our personal accounts, but for this generation of retirees pay “pension”, “empty account” in the amount of 4.7 trillion.

So here’s the thing, we pay pensions and not individual accounts, we’re old, do you still receive a pension? Our pension money come from? In recent years, on the pension dispute, Wang (ID:banglicai) will give you a comb.

How much do you pay per month pension?

Many companies give their employees on “five social insurance and one housing fund”: pension insurance, medical insurance, work injury insurance, unemployment insurance, maternity insurance and housing provident fund – the so-called endowment insurance, that we pay a certain percentage of money each month, and then will be able to meet a certain number of years or after retirement in proportion to get the appropriate number of pensions, as the guarantee of basic living.

Therefore, strictly speaking, every month we pay this money belongs to the basic old-age insurance. At present, this money by the enterprise and different payment pro rata payment of the insured.

An old-age insurance payment ratio, for example, Beijing: 20% of enterprises according to their total payment per month base pay, paid according to the wages of employees 8%. “Base pay”, generally refers to the towns individually and flexible employees in the previous year’s average monthly wage of employees in the city.

In broad terms, old age when we receive a pension, may also include pension, personal business, such as old-age insurance, but due to corporate pension and personal insurance is still not widespread, so when it comes to pensions, refers to the compulsory basic old-age insurance.

Basic old-age insurance are not all the same, now there are three main types: the basic old-age insurance for urban employees, authorities and the endowment insurance, basic old-age insurance for urban and rural residents.

Pensions generally received less than one?

Wang (ID:banglicai) comb material found in public, for the urban workers ‘ pensions, and some provinces and cities arrived in was not received in the current period.

According to reports, one issued by the social security administration, Department of economic development of China’s social security annual report 2015 shows last year, Heilongjiang, Liaoning, Jilin, Hebei, Shaanxi and Qinghai in six provinces of urban employees pension funds received in the current period does not arrive. Among them, 18.3 billion yuan less than the expenditure of income in Heilongjiang, Liaoning and Jilin also difference of 10.5 billion yuan of income and expenditure, 4.1 billion yuan.

However, overall, still maintained a corresponding growth in the accumulated balance. According to the development of Chinese pension report 2016, by the end of 2015, today national pension insurance fund balance has reached 3.5 trillion yuan, increase of 354.5 billion yuan over the end of 2014, an increase of 11.15%, down 1.34% is growing much faster than the previous year.

However, a report by the Chinese Academy of social sciences pointed out that an “empty account” phenomenon, caused by media attention. Figures show that the 2015 individual account in basic old-age insurance for urban employees cumulative amount of bookkeeping (“empty account”) to 4.7 trillion yuan, today when old-age insurance fund balance is only 3.5 trillion.

In other words, even if all the urban workers ‘ basic old-age insurance fund balance of funds must be used to fill personal accounts will still have more than 1 trillion difference. Personal account here is that young people like you and me part of the pension payments.

Your pension gone?

Associated with aging and pension, and formed the so-called “empty account”. Related to China take the form of pension payments.

There are two main ways of pension payments, a PAYG system, one is accumulation pension system.

As its name suggests, the former refers to the current generation paying retirement pensions of a generation; while the latter is determined according to the principle of balanced pay amounts to personal accounts funded from the personal accounts pension after retirement.

Specifically, China adopted a compromise approach, uses a combination of integrated accounts and personal accounts, and accounts of the funds depends on the retirement community median income levels. In Beijing, we have a monthly salary of 8%, belong to the individual account.

Experts point out that, in practice, (because nobody from the pay system to a part of the accumulated cost of) old and personal account of the insured person accumulated enough, young people had to pay for security of personal account pensions paid in the current period, resulting in accounts have not only on the actual amount, thus forming the so-called “empty account”.

Explain to the person who studies pensions, ponds, for example, pensions are a pond, pension balances is the water in the pond, a stream, a go. For example, now the flow of incoming money is $literal, generation, born after, go to 50, after post.

Therefore, when $literal in the future, after the crowd when maintenance is needed, because of the large number, and could face money problems.

Public data show that early, at ages 65 or older accounted for less than 4.5%, to 1980 does not exceed 5%, grew 0.5% for 30 years, and by the year 2010, this proportion had increased to 8.9%, since $literal, the generation number of the huge, maintenance in old age has raised a question of attention.

China pension financial 50 Forum of strategic thinking on the reconstruction of China’s pension system reported that since 2000, China’s basic old-age insurance replacement rate (proportion of pension income when working) continues to fall, fell from 70.79% in 1997 to 45% in 2014.

When we are old and pensions can be paid?

On this issue, the views of the industry.

Experts optimistic, said “empty account” is just a way of accounting, pension increases downward, mainly under the influence of economic conditions, the minimum wage increases also recently downgraded, and the so-called “funding gap” has no associated.

In addition, he also referred to a future arrangement, the national social security fund, which was set up in 2000, devoted to population ageing peak of pension and other social security supplement, allocation.

It is to be noted that, the national social security funds and local government management of old-age pension, basic medical and other social insurance fund is separate funds, sources of funding and operational management is different, use also differs. According to the information on its website, the end of 2015, the national social security fund with total assets of 1.9 trillion, the Fund since its inception, the average investment yield of 8.82%, the cumulative return on investment amounted to 790.8 billion yuan.

But there are studied the pensions of people worried that, when $literal, the generation old times, the pension paid to us is not enough. Now is the time to plan ahead.

From international experience, when pensions not received when arriving, there are at least two ways, one is to raise the retirement age, one is to reduce the level of basic old-age security.

These two approaches are not negative means. Survey found that, among people over 60 years old in itself is hoping to “many years”, bigger pensions and reduce the level of basic old-age insurance, you can through an annuity, individual commercial endowment insurance to compensate.

In addition to strengthening the function of preserving and increasing the value of the Social Security Fund, a progressive enhancement of basic old-age insurance, annuity and commercial insurance “three-pillar” pension system, and is also considered one of the reform.

What individuals can do in advance to prepare for old age?

See the problem, little said: only now working hard, saving a large sum before the old! He thinks this is the best way! But if not?

Insiders pointed out that, although individuals cannot use basic old-age pension, but you can buy commercial pension insurance to guarantee that “the elderly”, and the type of annuity, generally traditional, profit sharing, and universal.

In addition, some businesses have enterprise annuity system and enterprises through investments, implement the appropriate value.

Business insurance, Wang (ID:banglicai) probably give you some reference to it, just under the column, because the products are different, if you are interested in also own the banks, insurance companies and other financial institutions Advisory.

Traditional old-age insurance: traditional pensions are insured and the insurance company, by signing a contract, both parties agree to determine the pension time and fix the corresponding amount received, generally speaking, the interest rate is determined, usually in the 2%-2.4%. Historically, the interest rate is variable, generally with the existing level of bank rate remained fairly.

Selling point: fixed returns, low risk.

Disadvantages: it’s hard to resist the effects of inflation. If inflation is higher, in the long run, there exists the risk of devaluation.

Profit-sharing pension insurance: profit-sharing pension usually have a guaranteed interest rate, but the slightly lower interest rate than a traditional annuity, generally only 1.5%-2%. Participating insurance outside of fixed minimum return annually there is uncertainty of dividends received.

Advantages: in addition to an agreed minimum return, the return of this money and the insurance companies linked to business performance, theoretically, withdrawal or partial withdrawal threat of inflation on pensions, pensions are even more value in value.

Disadvantages: the dividend is uncertain, bonuses and free, the operating relationship with insurance companies, may also be due to the bad performance of the company and their losses.

Universal life insurance: universal life insurance after deduction of part of the initial costs and security costs, premium into personal investment accounts, guaranteed income, generally in the 1.75%-2.5%, some linked to Bank one-year after-tax interest rate on a regular basis. In addition must meet the prescribed minimum benefits, and uncertain “additional income”.

Advantage: universal insurance is characterized with guaranteed interest rate, no cap, billing rates are published monthly, most of which are 5%-6%, monthly, compounding, can resist the impact of interest rate fluctuations and inflation.

Disadvantages: insurance high upfront charges high, investment account funds, surrendered in the early losses.

(Based on publicly available data of commercial insurance)

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