What is the dual-track pension system?

Article 16 of the "Social Insurance Law" Individuals who participate in the basic pension insurance and have made cumulative contributions for fifteen years when they reach the statutory retirement age will receive a basic pension on a monthly basis. Individuals participating in basic pension insurance who have paid less than fifteen years of cumulative contributions when they reach the legal retirement age can pay for fifteen years and receive basic pensions on a monthly basis; they can also transfer to new rural social pension insurance or urban resident social pension insurance. , enjoy corresponding pension insurance benefits in accordance with the regulations of the State Council.

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What is the dual-track pension system? Why has the dual-track pension system been controversial? Pension reform is imminent, so how much do you know about the dual-track pension system? If If you want to have a clearer understanding of the current pension system issues, then this article’s explanation of the dual-track pension system will play a certain role in your understanding of pension policies. The editor wishes you a happy reading! The concept of the dual-track pension system in our country’s government agencies and institutions There are two completely different systems in place for employee retirement pensions and corporate employee retirement pensions. Specifically speaking, there are three differences: first, the overall planning method is different, that is, enterprise personnel are paid by the unit and the employees themselves according to certain standards, while government agencies and institutions are uniformly financed by the finance; second, the payment channels are different, that is, enterprise personnel are paid by themselves. Third, the pension standards for government agencies and institutions are much higher than those for enterprise retirees, and the gap is about 300% to 500%. The retirement income replacement rate for agency workers has far exceeded 80%, and according to information disclosed online, is as high as 92%-107%. However, since the reform of the pension insurance system, due to various reasons, the pension replacement rate of enterprises has shown a gradually declining trend, from more than 60% in the early stage of reform to a low level of about 40%. Obviously, the pension replacement rate has dropped to about 40%, which is seriously lower than the normal level, indicating that there are serious problems in the enterprise's pension insurance reform. Over the years, this ultra-low replacement rate has repeatedly warned us. First of all, the 40% replacement rate warns us that the pension income of employees after retirement is less than half of their salary while working, and the standard of living has dropped significantly. Nationally, it means that the income level of retirees is significantly lower than the wage income level of working people. According to data released by the National Bureau of Statistics, the average annual salary of urban non-private workers in 2010 was 37,147 yuan, and the average monthly salary was 3,096 yuan. In 2010, the national average monthly corporate pension level was only 1,300 yuan. Based on this calculation, the average replacement rate of corporate pensions nationwide in 2010 was only 42%. The proportion of labor income in our country has been declining for more than 20 consecutive years. The original salary when working is very low, and the pension replacement rate after retirement has dropped significantly to 40%. It is conceivable that their living security level is too low. Secondly, the pension replacement rate is 40%, and the pension income is only 1,500 yuan per capita, which warns us that the per capita total income of retired enterprise employees is far lower than the per capita total income of urban households, making them a low-income group in cities. According to Xinrenshehan [2011] No. 204 document, the per capita total income of urban households in 2010 was 19,109 yuan. According to the announcement of the Ministry of Human Resources and Social Security, after six consecutive adjustments in 2010, the average monthly corporate pension per capita was 1,300 yuan, and the per capita annual average was 15,600 yuan. Comparing the two, the per capita total income of urban households is 19,109 yuan, which is 3,509 yuan higher than the annual per capita total income of retired employees of 15,600 yuan, an increase of 22.5%. This means that the average annual income of retired employees is far lower than the per capita total income of urban households, which is only equivalent to 81.6% of the latter. This shows that retired employees have become a low-income group in cities and towns and have become a poor family. Third, the 40% pension replacement rate warns us that my country’s pension security level is far lower than most countries in the world. Relevant information shows that the International Labor Organization's Convention on Minimum Standards of Social Security currently stipulates that the minimum replacement rate for pensions is 55%. 78% of countries have exceeded 60%, only one country has Haiti (33%) below 40%, and only 6 countries have a replacement rate of 40%. This shows that my country's pension replacement rate is not only far lower than the 55% minimum replacement rate stipulated in the "Convention on Minimum Standards of Social Security". Compared with my country's per capita contribution rate of 28%, which is the highest in the world, it is not difficult to find that the actual replacement rate level is already the highest in the world. Ranked last in more than 160 countries. Fourth, compared with my country's high contribution rate, the 40% replacement rate warns us that the pension level is only half of the replacement rate level that should be achieved based on the payment level. my country's payment rate is extremely high, ranking first among more than 180 countries in the world. According to regulations, individual employees pay 8% and the unit pays 20%, with the total payment rate reaching 28%. With a three-to-one support ratio (three people pay for one person’s retirement expenses), the three people’s total contribution is 28%, and the contribution rate reaches 84%. According to the contribution rate and support ratio, the reasonable pension replacement rate should reach 84%, but the actual replacement rate is only about 40%, indicating that the replacement rate is only half of the reasonable replacement rate. This is an extremely unfair and abnormal phenomenon. Fifth, comparing the level of enterprise retirement payment replacement rate before the reform, the 40% replacement rate warns us that since the pension insurance reform, the level of pension security for enterprise retirees has dropped significantly. Before the reform, enterprises implemented a pay-as-you-go system. Employees did not pay contributions and could receive 90% of their pre-retirement salary when they retired after working for 30 years, ensuring that their living standards after retirement were well protected.