Legal analysis: central adjustment fund raising, central adjustment fund appropriation, central adjustment fund management and central financial subsidy.

Legal basis: Notice of the State Council on Establishing the Central Adjustment System of the Basic Old-age Insurance Fund for Enterprise Employees II. Main Contents

On the basis of overall planning of the existing basic old-age insurance for enterprise employees at the provincial level, a central adjustment fund is established to appropriately adjust the old-age insurance funds in each province to ensure the timely and full payment of basic pensions.

(1) central adjustment fund raising.

the central adjustment fund is composed of funds from the endowment insurance funds of various provinces. According to 9% of the average wage of employees in each province and the number of employees who should be insured on the job as the base for calculating the amount of payment, solution ratio started from 3% and gradually improved.

the amount of payment in a certain province = (the average salary of employees in a certain province ×9%)× the number of employees in a certain province × solution ratio.

the average wages of employees in each province are the weighted average wages of employees in urban non-private units and private units provided by the statistics department.

the number of on-the-job insured persons in each province is temporarily determined based on the average of on-the-job insured persons and the number of employed persons in enterprises announced by the National Bureau of Statistics. When the conditions are ripe in the future, the number of people who should be insured on the job will be determined based on the data of the national insurance plan covering the permanent population.

(2) central adjustment fund allocation.

the central adjustment fund will be supported by income, and all the funds raised in that year will be allocated to local governments. The central adjustment fund is allocated according to the per capita quota, and the amount of allocated funds is determined according to the number of retirees in each province approved by the Ministry of Human Resources and Social Security and the Ministry of Finance.

the amount allocated by a province = the number of retirees approved by a province × the national per capita allocation.

in which: national per capita appropriation = central transfer fund raised/approved national retirees.

(3) central adjustment fund management.

the central adjustment fund is an integral part of the endowment insurance fund, which is included in the financial special account of the central social security fund, and is managed by two lines of revenue and expenditure, which is earmarked for special purposes and may not be used to balance the financial budget. The central adjustment fund adopts the method of pre-payment and pre-allocation before liquidation, and the funds are allocated on a quarterly basis and unified liquidation at the end of the year.

In principle, the accumulated surplus funds in all localities before the implementation of the central adjustment system for endowment insurance funds are reserved for the adjustment of the surplus and deficiency of endowment insurance funds within the province (autonomous region or municipality directly under the Central Government).

(4) central financial subsidies.

the current central financial subsidy policies and methods remain unchanged. After the central government issued the central financial subsidy funds and allocated the central adjustment funds, the gap of endowment insurance funds in each province was borne by local governments. Provincial governments should earnestly assume the main responsibility of ensuring the timely and full payment of basic pensions and making up for the gap in the endowment insurance fund.