Pension points - what is it? How are Retirement Points calculated?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Recently, the pension reform has undergone so many changes that it is just right to get confused in the numbers. To whom and how much? Those who first asked this question immediately stumble upon another very interesting definition: retirement points. What is this and what does it have to do with the amount offered to us by the state for old age? We will talk about this and not only today.

What is an IPC and how to calculate a pension?

With the adoption of the Federal Law "On Insurance Pensions", a new procedure for receiving money "for old age" has entered our lives. Now the number of banknotes you receive upon reaching a certain age will depend not so much on the years worked, but on such a thing as retirement points. What is it?

All the experience accumulated by a person by the time of the X hour is converted into points. Their totality is called the individual pension coefficient, abbreviated IPC. So the pensioncounted as follows:

P=F + N + BSat

• P - pension;
• F is a fixed amount set annually by the state;
• H - the funded part of the pension for those who have it;
• B - number of pension points;
• Sat is the value of 1 pension point in the current year.

When it's time to retire

In order to start applying for a pension, the applicant must meet the following conditions:

• reach the state-mandated retirement age;
• have more than or equal to the minimum length of service;
• reach the minimum number of retirement points.

If at least one of the conditions is not met, the citizen has two options:

• keep working until all conditions are met;
• apply to the Pension Fund for a social pension upon reaching the required age (60/65 years for women/men, respectively).

Retirement points are awarded for each year of service. Therefore, the later a person goes to apply for a pension, the more points he will have. But there is also a minimum limit. No points - no pension. Today, the minimum score is 11.4, and in 2025 this value will reach as much as 30.

In the same way, the minimum experience will increase proportionally. For those who retire in 2017, it is enough to work 7 years, in the future this figure will be increased to 15, and in 2025 it will be exactly that. Worthnote that the following periods are included in this period:

• decree;
• military service;
• periods of disability;
• detention;
• time spent at the labor exchange;
• other.

Fixed payout and its amounts

To understand how Retirement Points are calculated, let's break down each factor included in the formula separately.

The first number is F, that is, fixed payments. This is a certain amount established by the state and does not depend on any indicators of your work activity. Since 2016, its size has been fixed firmly and amounts to 4,559 rubles. In the same way, the inflation coefficient is fixed, by which this figure will increase annually. It is 1.04. That is, in 2017 the fixed part in the pension calculation formula is:

4 5591, 04=4 741

There are also several categories for which inflated rates apply:

• disabled people of the first group;
• people over 80 years old;
• working or living in the Far North or a region equivalent to it;
• having a dependent family member who, for he alth reasons, is not able to carry out independent labor activity.

How to calculate points?

So, retirement points. What it is is more or less clear. But how to count their number? It's not that easy here.

The second digit in our formula is H, orfunded part of the pension. Where did she come from?

For some time now, Russian citizens have been asked to form their pension in two ways:

1. Receive only an insurance pension and transfer 16% of wages to its formation.
2. Divide the pension into two categories. To do this, 10% of the salary is transferred to the insurance part, and 6% is accumulated on a special account and constitute a funded amount. This is our N.

Until 2015, citizens of the Russian Federation were allowed to choose what kind of pension they would have:

• only insurance;
• insurance + savings.

From the first month of 2015, the individual score can be calculated using the following formula:

B=(Sv / Cm)10

• Sv - the amount of contributions transferred to the insurance part of the pension from earnings (annual). Its value depends on the salary and on what kind of pension the person has chosen.
• Sm - the maximum possible amount of insurance payment at the full (16%) rate, deducted from the highest contributory salary (base).

Calculation example

Let's try to calculate the pension points ourselves. That this is not so difficult can be seen in the following example:

The salary of employee K. is 35 thousand rubles a month. This means that he earns 420 thousand rubles a year.

The maximum salary for calculating PF contributions in 2017 is 876,000 Russian rubles. The amount of contributions from this baseline is:

876,00016%=140160 rub. This is our See

Option 1

Citizen K. preferred to receive only an insurance pension. In this case, the amount of his annual contributions to the PF will be:

Sv=420,00016%=67,200 rubles

Now let's calculate the retirement score for 2017:

B=(67 200 / 140 160)10=4, 79

Option 2

Employee K. chose a mixed model of pension formation, therefore it has both insurance and funded parts. In this case:

Sv=420,00010%=42,000 rubles.

B=(42,000 / 140,160)10=2, 997

At the same time, you need to remember that there is a maximum number of points that a future pensioner can score in each particular year. With the first option of calculations in 2017, this figure will be 8.26, and with the second option - 5.16. These indicators change proportionally every year and from 2021 will be 10 and 6.25, respectively. Even if you get a higher number in the calculation, only such indicators will be taken into account.

How to calculate the "Soviet" experience?

And what about those who worked in the USSR for some part of their lives? How to calculate pension points for Soviet experience? Everything is much more complicated here. The government proposes to convert all pension rights received in previous years.

It happens like this:

1. All pensions earned before 2002 are converted into financial equivalents. In this case, the calculation is carried out according to the old scheme, taking into account the length of service and salary for any 5 years in a row.
2. This figuremultiplied (indexed) by 10%. For those who worked before 1991, an additional 1% is added for each full year of seniority.
3. All contributions paid to the PF in the period 2002-2014 are added together and then multiplied by the index number. As a result, we get the so-called pension capital.
4. Now this amount is divided by the number 228 and the price of 1 point, set in 2015. By this date, one unit of a pension point "cost" 64 rubles and 10 kopecks.

As you understand, it is rather difficult to independently calculate pension points for the experience gained in the Soviet years. But getting at least an approximate figure is quite realistic.

Supplements for points

In the life of every person there are quite good reasons for not working. And the current pension legislation takes this into account. Additional pension points are calculated for non-working citizens in such cases:

• break in work in connection with the care of a disabled person of group I - 1, 8;
• every year of military service (by conscription) - 1, 8;
• 365 days of looking after a disabled child - 1, 8
• full year care for the elderly (over 80 years old) person - 1, 8;
• 365 days of first child care - 1, 8;
• the same period for the care of the second baby - 3, 6;
• for the third and subsequent children - 5, 4.

It is also worth considering that the pension points added for childcare are calculated on the basis that the vacation is one and a half years. For example, a mother raising four children, by the time she enterspension will automatically have:

1, 8x1, 5 + 3, 6x1, 5 + 5, 4x1, 5 + 5, 4x1, 5=24, 3 points.

To qualify for a pension, she will have to finalize quite a bit. Interestingly, mothers raising twins or triplets will receive additional points as for one baby. This is because in this case, it is not the number of children that is taken into account, but the period of time that the mother did not work in connection with caring for them.

By the way, if a person worked part-time while on parental leave, you can choose which points will be “credited”: for work or for a child.

What is the current retirement score?

As mentioned above, since 2015 the monetary "value" of 1 pension point has been fixed at 64.10 rubles. But a month later, this figure was indexed and amounted to 71.41 Russian rubles. Every year on February 1, this figure is additionally indexed by a special coefficient equal to 1.04. It is easy to calculate that in 2017 the value of one point of pension savings is:

74, 31, 04=77, 3 rub.

Now you have all the data to calculate your estimated pension. But if you do not want to rack your brains over all these calculations, you should know that there is another very simple way to calculate retirement points. To do this, you need to go to the website of the Pension Fund of Russia, register in the "Personal Account" and use the pension calculator. After entering all the necessary data, in a few seconds youget a fairly accurate amount of your estimated pension.