IPC (individual pension coefficient). Calculation formula

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Published: March 30, 2016

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A new principle for calculating pension payments was introduced in 2020. This radical change is due to the government’s reform, which is actively introducing pension provision to reduce the burden on the state treasury .

The changes are based on legislative norms reflected in Federal Law No. 400 (as amended in 2015).

• What it is?
• What do the sizes depend on?
• Maximum and minimum values
• Advantages and disadvantages
• How to calculate points?
• Using the calculator

What it is?

The individual pension coefficient (IPC) is the sum of points accumulated over all years of work.

This calculation involves assigning a score to all work periods in which employers contributed certain insurance amounts to the Pension Fund. The formation of such contributions occurs according to the selected tariff. 10 or 16% of your monthly salary may be deducted.

The points accrued for one year are equal to the ratio of the funds in the insurance account of the future pensioner (already placed in the Pension Fund) to the contributions that can hypothetically be obtained from the maximum salary that is subject to contributions according to legal norms.

What is an individual pension coefficient?

12 February 2020 17:52

An old-age insurance pension, including an early one, is assigned if the following conditions are simultaneously met:
1) reaching a certain age;

2) availability of the required insurance experience

3) availability of the required amount of the individual pension coefficient;

4) availability of the required length of service in the relevant types of work for early assignment of a pension (northern, pedagogical, medical, in difficult and dangerous working conditions, etc.)

Everyone knows that in order to establish an old-age insurance pension, it is necessary to reach a certain age and have the required insurance period. But not everyone understands what an individual pension coefficient is , the presence of which is also one of the main conditions for receiving an old-age insurance pension.

Our insurance pension begins to form when we begin working. The employer is obliged to transfer monthly insurance contributions for compulsory pension insurance (hereinafter referred to as OPS) to the future pension of each employee.

The general rate of insurance premiums for compulsory health insurance is 22% of the employee’s wage fund. Of them,

• 6% is the solidary part, which is used to pay a fixed payment to the insurance pension;
• 16% is the individual tariff and is used to form an insurance pension. At the choice of a citizen, the insurance pension can be formed in the amount of 10% or 16%, of which 10% is for the formation of an insurance pension, and 6% is for a funded pension.

Starting from 2014, 16% of the individual tariff goes to the formation of only the insurance pension. Insurance contributions for the insurance pension are automatically transferred to the individual pension coefficient.

The individual pension coefficient (hereinafter referred to as IPC) is a parameter that evaluates each calendar year of a citizen’s work activity. The number of pension coefficients for a calendar year depends on the amount of insurance contributions paid by the employer to the Pension Fund for a specific employee, depending on the amount of wages.

Thus, the number of pension coefficients depends on the length of the insurance period, the size of the citizen’s salary, and for each individual pension coefficient is determined differently.

Let's look at a specific example of how many pension coefficients a citizen can earn in one year, 2020, if his monthly salary is 25,000 rubles:

Step 1: Determine the citizen’s annual salary of 25,000 rubles. x 12 months = 300,000 rub.

Step 2: Determine the amount of insurance contributions paid to the Pension Fund for the insurance pension:

300,000 rub. x 22% = 66,000 rubles, of which 16% = 48,000 rubles for the insurance pension .

Step 3: To convert the amount of insurance contributions for a citizen’s insurance pension for 2020 in the amount of 48,000 rubles an individual pension coefficient , you must divide it by the maximum amount of insurance contributions for an insurance pension in 2020 in the amount of 206,720 rubles , which is paid from the maximum annual wages in the Russian Federation.

For reference: The maximum annual salary is determined in accordance with Article 421 of the Tax Code of the Russian Federation and the resolution of the Government of the Russian Federation. (in 2020 its amount is 1,292,000 rubles. Accordingly, the maximum amount of insurance contributions for the year for an insurance pension will be 1,292,000 x 16% = 206,720 rubles.)

48,000 rubles: 206,720 rubles = 0.232;

0.232 x 10 = 2.32 are the pension coefficients earned by a citizen in 2020 with a salary of 25,000 rubles per month.

It is important to know!

Pension coefficients are calculated not only when a citizen works.

There are socially significant periods in life. A citizen is not able to work at this time, but he is accrued an additional pension coefficient, taking into account which the insurance pension is also formed, and these periods are counted towards the insurance period.

The periods for which the additional pension coefficient is calculated include:

• periods of military service, 1.8 coefficient is accrued for 1 year
• periods of caring for a disabled person of group 1, a disabled child, 1.8 coefficients are accrued for 1 year
• periods of care for a citizen who has reached 80 years of age, 1.8 coefficients are accrued for 1 year
• periods of care of one of the parents for the first child, until he reaches the age of one and a half years; for 1 year of care for the first child, 1.8 coefficients are accrued, for the second child - 3.6 coefficients, and for the third and subsequent children, 5.4 coefficients are accrued.

In other words, a citizen’s individual pension coefficient is his personal participation and contribution to his future pension. And for each person it is determined individually.

What do the sizes depend on?

The government annually determines the cost of one point - adjusting it

value is made twice, in February and April. During these months, there is an automatic recalculation of pension funds (without an application from citizens) accrued for all pensioners. This indexation allows you to adjust the cost of the point in accordance with inflation and price increases.

Pension payments are formed from two main components - a fixed part and insurance funds, indexed taking into account the cost of one point.

In 2020, the cost is set at 78 rubles and 58 kopecks per point. And the fixed part is 4,823 rubles and 35 kopecks.

To be eligible for a decent pension, calculated according to the new formula, you must receive a high salary.

In this case, the IPC will be the maximum possible, since everything depends on the amount of insurance contributions for each year of work. When making calculations, points will be calculated for each year included in the insurance period separately.

The essence of the reform and new principles for calculating pension payments is to convert work activity into pension points. In turn, points are converted into rubles. And if the number of IPCs is entirely in the hands of the employee, then the cost of points will depend entirely on the government and inflation indicators, which officials rely on when indicating the annual cost.

Disadvantages of the system

As with any other model, the new reform has certain disadvantages. For example, today it is quite difficult to accurately calculate the amount of payments that awaits future retirees. This is due to the fact that no one knows how much 1 point will be worth in a few years. According to the old model, pensions could be calculated without problems while still young. To do this, it was enough to divide the savings over 19 years.

In addition, according to the new system, the threshold value of the number of points will increase annually. This will reduce the number of people who can count on receiving larger cash payments.

Maximum and minimum values

In 2020, the maximum IPC value is 8.26.

According to Article 55 of Federal Law No. 400, a gradual increase in the maximum value of the coefficient is provided (such changes will occur annually):

• 7.83 for 2020;
• 8.26 for 2020;
• 8.70 for 2020;
• 9.13 for 2020;
• 9.57 for 2020 and so on.

If the coefficient determined by calculation is higher than the permissible value for the current year, all further calculations are made taking into account the maximum value. For example, the calculation yielded a value of 8.5, but the current value for 2020 is only 8.26. In further calculations, the maximum value for the current year (8.26) will be taken into account, and not the previously obtained value (8.5).

The minimum value is planned to be set by 2025.

It will reach 30 points or IPC. The transition period lasts until the specified year, which provides for the accrual of pension payments at lower values:

• 6.6 for 2020;
• 9 for 2020;
• 11.4 for 2020 and so on.

The annual increase is 2.4 points.

Advantages and disadvantages

The new procedure and principles for calculating pension payments are perceived ambiguously by society, since, along with obvious advantages, the point system has tangible disadvantages for citizens.

The positive points include:

• reducing the burden on the state budget;
• stimulating employees to work longer (the longer you work, the more you will earn in old age);
• correlation of the cost of one point depending on the economic situation in the country.

The obvious disadvantages are:

• the inability for citizens with low wages to earn a sufficient number of coefficients (about 1.2 million people are in such an unpleasant situation!);
• difficulty in calculations - in fact, it is impossible to accurately determine the amount of pension payments until the very moment of retirement (such calculations can only be made by specialists from the Pension Fund).

The increase in the minimum insurance period also raises some concern..

Instead of five years, you need to work for fifteen!

This is exactly the minimum that will be reached by 2024 (an increase of one year occurs with each coming calendar year).

Software

IPK-3 software operates under the Windows 7 operating system.

IPK-3 software allows you to simulate acceleration, speed, distance traveled (for railway transport), pressure, time, binary signals, as well as data exchange via the CAN channel.

Identification data of the metrologically significant part of the software is given in Table 1.

Table 1

Software protection from unintentional and intentional changes corresponds to level “C” according to MI 3286-2010.

How to calculate points?

To determine the value of the IPC, it is necessary to divide the size of the insurance part of pension funds (the funded and fixed part in the calculations!) by the maximum amount of insurance contributions established by the government, and then multiply the resulting figure by ten.
When making calculations, indicators for the insurance part for the past year (as of December 31) and the amount of maximum contributions established in the coming year (from January 1) are taken.

For example:

Last year, the management of the enterprise contributed 80,000 rubles to the Pension Fund for an employee. Calculations are made as follows:

• 80,000 must be divided by 187,200 (the maximum amount of contributions received from the salary subject to contributions in the current year);
• and then the resulting figure is multiplied by 10 (0.43 times 10) - the coefficient will be equal to 4.3.

The size of the insurance rate also matters. With equal wages, but different rates, different coefficients will be obtained.

For example:

With a salary of 20,000 rubles per month and a rate of 10%, the calculations will be as follows: 24,000 rubles (insurance contributions) divided by 187,200 (the maximum allowable contribution), and then multiplied by ten (0.128 times 10). The coefficient is 1.28.

With the same salary, but at a contribution rate of 16%:

Divide 38,400 rubles (insurance contributions) by 187,200, and then multiply by ten (0.205 times 10). The coefficient is 2.05.

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Do you want your sick leave to be paid even though you are no longer working? Read the article you need.