Why you should never apply for flexible employment pension insurance? What are the differences between it and employee social insurance?

Now everyone is saying that you should never apply for flexible employment pension insurance. What’s the problem with this? What are the key points that everyone needs to know? What are the differences between flexible employment social security and employee social security?

1. Why you should never apply for flexible employment pension insurance?

1. Individuals face great pressure to pay social security contributions

According to the 2005 "Decision of the State Council on Improving the Basic Pension Insurance System for Enterprise Employees" (Guo Fa [2005] No. 38), urban self-employed individuals and flexible employment personnel shall participate in basic pension insurance. Their contribution base shall be the average wage of local employees on the job in the previous year, and they shall pay 20%, of which 8% shall be entered into personal accounts. Upon retirement, their retirement pension shall be calculated according to the method for retired employees of the enterprise.

2. The level of pension benefits for individuals who pay social security is low

Why is it said that the level of retirement benefits for individuals is lower? In fact, there are two reasons. One is that due to personal economic reasons, the social security base paid is usually very low, so the average individual contribution base when calculating pension at retirement is low. The second reason is that many people participate in insurance as individuals because of financial pressure, and everyone stops paying after paying for the minimum period of 15 years. The principle of pension calculation in our country is: the more you pay, the more you get, and the longer you pay, the more you get. The pension Zhang pays for 40 years is definitely higher than the pension he pays for 15 years. For many people who pay for social security out of their own pocket, their average pension income is generally low.

3. Individuals who pay social security retirement pensions receive pensions later

The biggest controversy about retirement age is that you cannot choose your own age and can only follow the policy. For example, the retirement age for female flexible employment workers is 55 in some places and 50 in others. Starting from 2022, as Guangxi has clearly stipulated, the retirement age for female employees in flexible employment will be unified at 55 years old. The retirement age for individually paid urban and rural residents' social security is unified at 60 years old for both men and women. Compared with women who retire from enterprises, if they participate in flexible employment social security and urban and rural residents' social security as individuals, it means delaying retirement by 5 and 10 years respectively, so they will receive pensions later and the time to recover the payment will increase.

2. Differences between flexible employment social insurance and employee social insurance

1. Different types of insurance

Flexible employment personnel can only participate in pension insurance and medical insurance, while employees can participate in pension insurance, medical insurance, maternity insurance, unemployment insurance and work-related injury insurance.

2. Different payment entities

Flexible employment personnel bear all expenses themselves, and employee social security is paid jointly by the unit and the employees, with the unit paying the majority and the employees bearing a small portion.

3. Everyone has different willingness to pay

Flexible employment personnel basically pay on a voluntary basis, while employee social security is compulsory and must be paid.

4. Different household registration restrictions

Flexible employment personnel need to have local household registration to pay, but there is no such restriction for employee social security.

Social security knowledge is very detailed, and you don’t need to master all of it, but you still have to be clear about the basics.