Recently, the Ministry of Human Resources and Social Security issued a notice regarding the adjustment of basic pensions for retirees in 2023, announcing a 3.8% increase compared to the previous year. The news of the pension increase has attracted considerable attention, especially among many young people who were somewhat surprised. Wasn’t it said that the pension gap was growing larger? Why is it still increasing? How much pension can we receive after retirement?
In fact, the pension in our country has been increasing every year. The adjustment level primarily takes into account factors such as wage growth and inflation. Although the pension has increased this year, it is actually the lowest increase in recent years.
Starting from 2005, China began implementing pension adjustments, primarily focusing on increasing enterprise pensions. This was because there was a significant disparity between enterprise pensions and pensions for government agencies and public institutions. To bridge this gap, enterprise pensions needed to be rapidly increased. From 2005 to 2015, enterprise pensions in our country increased continuously for 11 years at a rate of 10%.
After 2016, pensions for government agencies and public institutions began to increase in sync with enterprise pensions. From that year on, the national pension increase rate started to noticeably slow down. In 2016, the increase rate was 6.5%. In the following years, the pension increase rate in our country decreased by 0.5 percentage points annually, reaching a 4% increase in 2022.
Although the 3.8% increase this year is a new low, it has actually exceeded the expectations of many people. Based on the average decrease rate of the previous few years, the increase should have been around 3.5% this year. Considering the current economic slowdown and the decrease in the consumer price index, the pension increase for this year may have been even lower. However, the final determination of a 3.8% increase is actually better than expected.
So, what does a 3.8% increase mean for retirees in terms of the amount of money they can receive? This calculation needs to be done separately for government agencies and enterprises. According to data published by the Ministry of Finance and social security funds, based on the amount of pension expenditures and the number of recipients, the average pension level for government agency employees in China was approximately 6,299 yuan per month in 2022, and for enterprise employees, it was around 3,040 yuan. With a 3.8% increase this year, this corresponds to an additional 240 yuan and 116 yuan per month, respectively.