Basic part of the insurance pension in 2020

Since the beginning of the 2000s, government bodies of the Russian state have been carrying out a number of organizational, legal, economic and political measures related to changes in the procedure for pension provision.

Until the adoption of innovations, the accrual of preferences took place according to a specifically developed scheme: persons of retirement age received funds from tax sources that were paid by organizations on behalf of their workers. Such a system would be able to work in a stable manner if there were 5-6 workers per pensioner, and the rate of the single social tax paid by the employer did not change.

However, taking into account demographic statistics in the country, the state decided to change the course of pension policy. In accordance with today's realities, for every ten pensioners there are only sixteen workers, which is unacceptable and can cause devastation of state extra-budgetary funds. The new principles for constructing the pension system, implemented in the Russian Federation in 2002, are designed to correct the crisis state of affairs.

Basic pension

Concept of pension parts

During the reform process, the first wave of which took place until 2015, it was established that government payments to current pensioners would consist of three parts:

Basic.
Insurance.
Cumulative.

The general basis of regular monthly income is its basic element. It is understood as a material amount that is intended for all persons who have reached the established retirement age and have a minimum work experience of a total of five years.

The basic pension for the subject of pension legal relations is fixed at the federal level at a single rate and is subject to indexation every year. The payment of the basic part of the labor pension is financed from the federal budget from the amounts of the unified social tax received by it.

The insurance part is based on the length of working periods and the amount of wages of a citizen during the period of his labor function.

Components of a labor pension

On behalf of each worker, the employer sends monthly contributions to the pension fund. It is these contributions that become the numerical value for the future determination of the insured share of pension payments.

Reference! The amount of insurance payments is calculated based on a simple formula, according to which the entire total of monetary contributions to the pension fund is divided by 19 (the average life expectancy of a citizen who has reached retirement age) and multiplied by the standard duration of the insurance period. This position is reflected in.

Calculation of insurance pension

The funded part refers to the material assets of compulsory pension savings, which are managed by professional market participants, in the interests of a person who will qualify for pension provision in the future.

How does the basic pension differ from the insurance and funded pension?

Since all these 3 elements (basic, insurance, savings) form the future basis of the monthly payments due, they have much in common in their content.

However, there are signs by which one can distinguish the components of pension provision.

First of all, the insurance element of preferences directly depends on the person’s salary. The higher the established monetary rate, the greater the volume of deductions that goes to extra-budgetary state funds. This means that the final level of pension will differ significantly in size. While the basic part has no relationship with how much money a citizen received at his place of work before retirement. The base is expressed in clearly fixed dimensions.
According to pension legislation, the basic part of the salary must be paid to employees immediately after reaching a specified age. A pensioner can receive the insurance component in full or in part, or may refuse to receive it altogether.
The funded element of pension provision has similar distinctive features from the basic value, as does the insurance part.

Where does pension funding come from?

For the most detailed analysis, it is necessary to consider those aspects by which the insurance and savings parts are differentiated from each other, in isolation from the value of the base component.

Is it possible to increase the surcharge amount?

If there are grounds provided by law, for example, when a pensioner has disabled dependents or when he reaches the age of 80, the amount of the fixed payment may be revised.

To do this, contact the regional office of the Pension Fund with a corresponding application. You will also need an original and a copy of your passport. Do not forget about documents confirming the existence of circumstances for review. Within 10 days from the date of submission of the package of documents, the Pension Fund of Russia branch will make a decision to satisfy your request, or give a reasoned refusal.

Please note that the fixed payment to the old-age insurance pension increases automatically when the pensioner reaches 80 years of age. There is no need to contact the Pension Fund for this. From January 1, the monthly payment to such pensioners who do not have dependents is 9965.80 rubles.

You may be interested in: What is IPC (Individual Insurance Ratio)

How is the basic part of the labor pension recalculated?

Recalculation of pension indicators refers to actions through which, on the basis of an application from an authorized citizen, a change in the amount of the monthly compensation payment is made.

The legislation established four grounds when pension preferences may be subject to differentiated revision:

A pensioner reaches the age of eighty.
Transformation of the degree of limitation of the ability to work, both upward and downward.
Change in the number of family members with limited working ability.
Transformation of the category of recipient of labor compensation in the event of the loss of a breadwinner.

A revision of the value of the basic element of a labor pension in connection with a citizen reaching the age of eighty years is carried out from the day this subject reaches the designated age.

In other cases, recalculation is carried out from the first day of the month after which the subject’s application was received to revise the fixed amount of the pension upward.

Reasons for recalculating the basic part of the pension

Fixed payment

The concept of a fixed payment, like many other innovations, came to the Russian legal system in 2020. It refers to a specifically established figure, fixed at the legislative level, which is intended to be paid to a citizen who has reached retirement age.

It is worth noting that this terminology has come to replace the old-established definition of the basic part of the pension. Although the essence of the concepts, as well as the procedure for assigning payments, are similar to amazing accuracy.

The following persons have the right to receive this compensation:

Citizens applying for pension benefits due to reaching a specifically established age.
Citizens applying for pension benefits due to bodily dysfunctions that lead to disability.
Citizens applying for pensions due to the loss of a breadwinner.

The final amount of the benefit depends on which classification group the recipient belongs to. The amount of money previously allocated to state funds does not affect the size of the fixed part of the preference.

Video - Savings and insurance part of pension

Requirements for recipients of fixed payments

Based on the current state of affairs, we can conclude that declaring monthly social payments later than the generally established retirement age is the most profitable from an economic point of view. For each annual period of later application, the insurance pension and fixed payment are increased by the corresponding coefficients.

However, in order to become eligible for two types of these compensations, you must initially meet a number of criteria in 2020:

Cross the line of a certain age. For males it is sixty years, for the female half of the population it is fifty-five years.
Have at least nine years of official work experience (as of 2019).
Have 13.8 pension points (as of 2019). They are added based on salary.

In the near future, these requirements will be tightened. By 2025 it will take fifteen years and thirty points.

Estimated changes by 2025

Above we discussed the classic characteristics of persons who carried out labor activities on a general basis.

But there are also less socially protected segments of the population for whom privileged conditions are established:

Citizens who have worked in areas with unfavorable climatic conditions for at least fifteen years are entitled to receive fixed payments regardless of age and points.
For disabled people, the basic pension amount is established after a medical and social examination makes a decision on assigning a disability group.
Dependents who have lost their breadwinner are entitled to a fixed payment from the day of the loss of the family breadwinner.

Also important is the fact that, depending on the capabilities of regional budgets, citizens may be assigned additional basic values. For example, a regional fixed payment for a dependent. All these preferences are subject to joint summation.

Pension formation

Subscribe to news

A letter to confirm your subscription has been sent to the e-mail you specified.

January 12, 2018

In the system of compulsory pension insurance, insurance pensions and pension savings are formed for working citizens.

There are three types of insurance pensions: old age, disability, and loss of a breadwinner.

Citizens' pension rights are formed in individual pension coefficients, or pension points. All pension rights formed before 2015 were converted, without reduction, into pension points and are taken into account when assigning an insurance pension.

After 2020, the calculation of the number of pension points per year is based on the insurance contributions that the employer pays for his employee to the Russian Pension Fund at the rate established by the state.

The right to an old-age insurance pension arises if the following conditions are simultaneously met:

reaching the age of 60 years for men, 55 years for women. Certain categories of citizens have the right to receive an old-age insurance pension early;
for persons holding government positions in the Russian Federation, from January 1, 2017, an increased retirement age has been in effect, which increases annually by 6 months to 65 years for men and 63 years for women;
availability of the required insurance period, taking into account the transitional provisions of Art. 35 of the Law of December 28, 2013 No. 400-F. In 2020, the duration of the insurance period required to assign an old-age insurance pension is 9 years, with a gradual increase to 15 years from 2024.
the presence of a minimum amount of pension points, taking into account the transitional provisions of Art. 35 of the Law of December 28, 2013 No. 400-FZ. In 2020, this is 13.8 pension points up to 30 from 2025. The maximum number of pension points per year in 2020 is 8.70.

The number of pension points depends on accrued and paid insurance contributions to the compulsory pension insurance system and the length of insurance (work) experience. For each year of a citizen’s labor activity, subject to the accrual of insurance contributions for compulsory pension insurance by employers or him personally, pension rights are formed in the form of pension points.

The insurance pension is guaranteed to increase by the state through annual indexation.

The old-age insurance pension is calculated using the formula:

INSURANCE PENSION = THE AMOUNT OF YOUR PENSION POINTS * PENSION POINT VALUE on the date of pension + FIXED PAYMENT

SP = IPK * SIPC + FV , where:

SP – insurance pension
IPC is the sum of all pension points accrued on the date of assignment of an insurance pension to a citizen
SIPC is the value of the pension point on the date of assignment of the insurance pension.

When assigning a pension from 01/01/2018 = 81.49 rubles. Indexed annually by the state.

As of January 1, 2020, the fixed payment is 4,982.90 rubles, its size is indexed annually by the state.

Thus, the calculation of the insurance pension in 2020 is carried out according to the formula:

SP = IPK * 81.49 + 4982.90

For each year of later application for a pension after the right to it arises, the insurance pension will increase by the corresponding premium coefficients.

www.pfrf.ru

Legal Aid Center We provide free legal assistance to the population

Fixed basic amount of old-age labor pension in 2020

The introduction of clearly fixed values has become one of the social guarantees of providing Russians with a minimum amount of compensation payments.

As of 2020, the basic portion for a worker who left his position due to reaching retirement age is 4,983.27 thousand rubles. From the analysis it follows that this amount in 2002 was 550 rubles per month. The positive fact of annual indexation of payments and their compliance with the minimum subsistence level is noted.

The described compensatory share of state preferences falls into the category of mandatory for all citizens of retirement age with more than five years of work experience.

Thus, after working for a period of average duration, it is possible to secure a certain amount of government compensation.

How to calculate the amount of an insurance pension

Participation of non-state funds

The advantages of using non-state funds are quite obvious. Here we should first discuss the possibility of investing financial resources as efficiently as possible, thereby ensuring optimal efficiency of pension growth. Typically, government funds work with instruments that are recognized as highly reliable, but this has a negative impact on their profitability. You can independently select a management company from the list of those that have passed the competitive selection by the Russian Ministry of Finance. You can choose such a company once a year by filling out a special form.

Increase factor for late retirement

From modern statistical indicators it follows that Russians rarely delay the appointment of monthly payments, because the average life expectancy is not so high - 65.9 years for men and 76.7 years for women.

For each year of the latest application to state pension preferences, bonus coefficients are established:

When applying for an insurance pension one year later, the fixed payment coefficient increases by 1.07.
When applying for an insurance pension two years later, the fixed payment coefficient increases by 1.15.
When applying for an insurance pension three years later, the fixed payment coefficient increases by 1.24.
When applying for an insurance pension four years later, the fixed payment coefficient increases by 1.34.
When applying for an insurance pension five years later, the fixed payment coefficient increases by 1.45.

Bonus coefficient table

This progression cannot continue indefinitely and its maximum score will be 2.11 - for people of retirement age performing a labor function.

The maximum score is no more than 3 - for persons of retirement age who perform a labor function and do not have a funded part of their pension.

Based on the above, we will formulate the advantages and disadvantages of late retirement:

In case of delayed retirement, the final volume of fixed payments will increase by an increasing factor (+).
While the subject of pension legal relations is working, the employer sends deductions of insurance contributions to state extra-budgetary funds for him and, consequently, the amount of insurance payment increases (+).
The indexation of pension benefits for pensioners who continue to work has been canceled since 2016 (-).
Low average life expectancy of the Russian population (-).

Thus, late retirement has both disadvantages and advantages. Each pensioner should proceed from the current individual situation.

Video - What is an insurance and funded pension?

Cumulative part

This part is calculated almost in the same way as the insurance one, but in this case the pension capital is replaced by the amount of savings. For each citizen, these savings are indicated in a special part of the personal account. The savings feature is different in that it is usually placed in different investment instruments; it can be transferred to various funds for management purposes. Very often it is invested in various instruments, including securities. Every working citizen has the right and opportunity to independently manage his funded portion of his pension, thanks to which he can choose which management company or fund he will cooperate with to increase his savings.

What to do if there are reasons to increase your pension?

The bodies of the pension system of the Russian Federation carry out an annual recalculation of mandatory payments based on the reasons for their increase. This privilege can be exercised in two ways:

Increasing your insurance pension without an application. In these cases, the territorial administration of the Pension Fund increases the individual pension coefficient of the worker from August 1 of each year. Thus, under these circumstances, the interested party does not need to take any action. In most situations, the competent authorities themselves must identify the reasons for increasing monthly payments and establish them.
The application form for increasing the fixed amount of pension benefits is reflected in the following cases:

the appearance of disabled dependents for a citizen of retirement age. The number of no more than three people will be taken into account. Such people must be on long-term or permanent financial support from a pensioner;
stay in territories north of the Arctic Circle and areas similar to these areas. The increase in pension payments will occur in accordance with regional coefficients for the entire period of residence in the above-described zones;
the occurrence of the required calendar work experience in the regions of the Far North and areas similar to these areas.

How is the pension amount calculated?

During the application procedure, the interested entity will need to fill out a form to the Administrative Regulations, a sample of which is contained on the official website of the Pension Fund.

The application shall indicate:

Passport data (series, number, who issued it, date and place of birth, etc.).
Addresses of actual location and place of registration.
Phone number.
Insurance number of an individual personal account.
Information about citizenship.

If the stated requirements are met, the increase in pension benefits will occur from the first day of the month following the calendar month in which the above-described application was considered.

In what size is it installed?

From January 1, 2020, the coefficient was 1.037, and the fixed payment was equal to 4982.9 rubles.

Depending on the category of the pensioner, the type of pension provision and the presence of dependents, the amount of the fixed payment to the insurance pension is now:

old-age pensioners (who have reached the age of 55 for women or 60 for men) - 4982.9 rubles,
if there is 1 dependent - 6477.77 rubles (plus 30% for each, but not more than three);
citizens who have worked for at least 15 years in the Far North (with at least 25 years of experience for men or 20 for women) - 7,474.35 rubles. (plus 50% of the total surcharge);
citizens who have worked in areas equated to the CS for at least 15 years (if they have at least 25 years of experience for men or 20 for women) - 6,477.77 rubles. (plus 30% to the amount);
disabled people of group I and persons over 80 years old - 9965.80 rubles (plus 100% of the principal amount);
disabled people of group II - 4982.9 rubles;
disabled people of group III - 2491.45 rubles (50% of the basic surcharge);
orphans - 9965.80 rubles (plus 100% additional payment);
for the loss of one of the parents (breadwinners) - 2491.45 rubles.