How are individual entrepreneur pension points calculated?

Content

• Features of a pension for individual entrepreneurs
• Calculation of pension for individual entrepreneurs
• How is a pension formed?
• Individual pension coefficient
• How is a pension calculated for an individual entrepreneur?
• The procedure for registering a pension for individual entrepreneurs
• Conclusion

Sooner or later, any person – and an individual entrepreneur is no exception – thinks about his life after finishing his career, namely, about retirement. Good news - the minimum pension in our country is still due to everyone, both the unemployed and especially individual entrepreneurs. Not all entrepreneurs know how their pension will be formed and what needs to be done to receive it. We will talk about this in our article.

What are fixed contributions

The number of points that a future pensioner will receive, that is, his individual pension coefficient (IPC), depends on the insurance experience.

For each year of work experience you can get a certain number of points, in 2020 the maximum is 9.13.

As soon as the individual entrepreneur has registered with the tax office and information about this has reached the Pension Fund, a personalized personal account of the individual entrepreneur is opened in the pension fund, where all his mandatory insurance contributions are subsequently received. It is from the accumulated amount on this personal account that the individual entrepreneur’s pension will be formed in the future.

The age of the individual entrepreneur does not matter; even if he has already reached the age of old-age pension, the obligation to make contributions to the pension fund remains. The fact that the entrepreneur receives a labor pension does not cancel this obligation. These contributions allow you to recalculate your pension annually as a working pensioner.

Features of a pension for individual entrepreneurs

An individual entrepreneur regulates his relations with the Pension Fund independently. He is obliged to register with the Pension Fund no later than a month after registration of the individual entrepreneur and deregister three days after liquidation. An individual entrepreneur also pays contributions to the Fund for himself - his pension will depend on them.

Pension contributions can be paid partially, or once a year, but no later than the last day of the year, otherwise a fine will be imposed.

Thus, the pension of an individual entrepreneur does not depend on salary, but on a fixed pension payment and an additional 1% of the amount in excess of 300,000 rubles, which individual entrepreneurs are required to pay annually to the Fund.

The minimum amount of pension fixed contributions that a self-employed individual entrepreneur (without employees) makes to the Pension Fund for 2020 is 29,354 rubles. We remind you that contributions in 2020 do not depend on the minimum wage and + 1% of income over 300,000 rubles. The law also provides for a maximum limit. Thus, in 2019, the total amount of individual entrepreneurs’ contributions to the Pension Fund cannot exceed 234,832 rubles.

If an individual entrepreneur, in addition to entrepreneurial activity, also works for hire, then the payments made for him by the employer are summed up with those that he makes independently.

An individual entrepreneur can begin receiving a pension upon reaching a certain age (55 or 60 years - for women and men, respectively - this will be the main age, to which, according to the pension reform, adjustment months are added, for example, in 2020 - 55.6 years for a woman and 60 .6 – for a man), the required insurance period (10 years – in 2020). If an individual entrepreneur is forced to cease his activities for a number of reasons, he has the right to apply for early retirement. It is paid to men over 58 years old and women over 53 years old with 25 and 20 years of individual entrepreneur experience.

Calculation example

Let's consider what kind of pension an individual entrepreneur with an income comparable to the average salary in the Russian Federation will receive.

The formula for calculating the IPC is given in paragraph 18 of Art. 15 of Law No. 400-FZ:

IPC = (SV / SVn) x 10, where:

• SV – insurance premiums paid by the future pensioner for the year;
• SVn – standard insurance premiums, which are determined on the basis of the individual tariff of insurance premiums and the maximum value of the base. This limit is set annually by the Government and for 2020 is RUB 1,021,000. (Resolution dated November 15, 2017 No. 1378).

The average salary in Russia in the 1st quarter of 2020, according to Rosstat, was about 42,000 rubles, which in annual terms would correspond to 504,000 rubles. To simplify the calculations, let's round up and assume that the entrepreneur earns 500,000 per year. Then the amount of his pension contributions for 2020 will be:

CB = 26,545 +1% x (500,000 – 300,000) = 28,545 rub.

IPC = (28,545 / (1,021,000 x 16%)) x 10 = (28,545 / 163,360) x 10 = 1.75

Let’s assume that an entrepreneur has been operating without significant changes for 35 years (the average length of service of a Russian pensioner at the time of granting a pension). Then his income will increase only due to inflation. But because inflation is also taken into account when determining the maximum base for calculating contributions, the number of points for the year will not change.

In this case, by the time he retires, he will receive 35 x 1.75 = 61.25 points. Those. The entrepreneur has earned the right to receive a pension (more than 30 points). Let's consider what its size will be, based on the current provisions of the law.

The insurance pension consists of two parts – fixed and variable. The fixed rate is approved by law for each year and for 2018 is 4982.90 rubles. The variable is defined as the product of accumulated points and the cost of one point. It is also established by law and for 2020 is 81.49 rubles. As a result, the insurance pension of an entrepreneur with an annual income of 500 thousand rubles. based on the current norms of pension legislation will be:

P = 4,982.90 + 61.25 x 81.49 = 4,982.90 + 4,991.27 = 9,974.17 rubles.

So, having looked at how a pension is calculated for an individual entrepreneur, we saw that its size is quite small at the average income level. It barely exceeds the cost of living of a pensioner, which in 2020 in the Russian Federation is slightly less than 9 thousand rubles.

Calculation of pension for individual entrepreneurs

Calculating pensions has always been a difficult task even for experienced accountants, and after the reform three years ago, everything became even more complicated. Only the Pension Fund can accurately calculate all the coefficients, because only they know many of the nuances. There is a convenient online calculator on the official website of the Fund, but in order to know what our pension will depend on, we will try to understand the calculation process ourselves.

How is a pension formed?

The pension of every citizen of the Russian Federation is the sum of three components:

1. Basic - the minimum amount available to all citizens, regardless of their length of service and type of activity.
2. Insurance – an addition to the basic one, depends on the individual indicators of the citizen. This part undergoes periodic indexing.
3. Cumulative - can be formed at the initiative of a citizen. It is not indexed. It was assumed that citizens born after 1967 would be able to accumulate it through non-state funds, but from 2014 to the present it has been frozen.

Individual pension coefficient

The pension is calculated according to the number of pension points, otherwise - individual pension coefficients (IPC). Their total number is subject to length of service, age and other indicators. To receive a pension, an individual entrepreneur must have more than 16.2 points in 2020. Every year the pension coefficient increases by 2.4, and by 2025 it will be 30.

You can earn a maximum of 10 points in one year.

Correctly calculating the coefficient is quite problematic. Before and after 2020, they are derived using different formulas, and then summed up.

The surest way to increase your future pension now is to accumulate more pension points.

This can be done in the following ways:

1. Increase your length of service, that is, work after reaching retirement age. For late retirement, bonus coefficients are added to the calculation formula.
2. Earn extra points for military service, childcare and more.

How is a pension calculated for an individual entrepreneur?

The pension is calculated using the formula: number of points * point value + fixed part

Pension in 2020 = IPC * 87.24 + 5,334.19

But the most difficult stage of calculating a pension for an individual entrepreneur remains the calculation of the IPC. To calculate everything correctly, it is better to submit a request to the Pension Fund itself.

A less reliable, but easiest way is to use the calculator on the official website of the Pension Fund. However, on the calculator’s page, its creators warn that the main purpose of the service is to give an approximate idea of ​​the future pension, but in no case to know its exact value.

Let's conduct an experiment and calculate the pension for IP Sidorov using an online calculator. He was born in 1970 and plans to retire in 2035. He did not serve in the army and was not on maternity leave. Let's say that he registered as an individual entrepreneur in 2000 and plans to continue his activities until retirement. We will indicate the annual income in the amount of 720,000 rubles. In total, for 35 years of service, he receives 35.13 pension points and claims a monthly pension of 35.13 * 87.24 + 5,334.19 = 8,398.93 rubles. Please note that the calculation is an estimate based on 2020 calculation components. By the time the individual entrepreneur retires, they will be indexed by correction factors.

For comparison, let’s calculate the pension for individual entrepreneur Sokolova, who, in addition to the same 30 years of entrepreneurial activity with an annual income of 720,000 rubles, worked for another 5 years as a hired worker with an official salary of 20,000 rubles and for 5 years combined this work with entrepreneurship. Sokolova raised three children and agrees to retire 5 years later than the permitted age. Such a heroine will be awarded approximately 108.41 points and a pension of 20,115.77 rubles.

Here is the calculation procedure:

Since IP Sokolova did not immediately apply for a pension, but only after 5 years, she is entitled to a bonus coefficient , which is established by law depending on the delay in the moment of registration of the pension. In our case – 5 years – the bonus coefficient is 1.36.

Let us repeat once again the bonus coefficient is a kind of bonus that increases the size of the fixed calculation component, as well as the value of the accrued points.

Thus, IP Sidorova’s future pension will be as follows:

(5,334.19 * 1.36) + (108.4 * 87.24 * 1.36) = 7,254.50 + 12,861.27 = 20,115.77 rubles

When can an individual entrepreneur retire and what is needed for this?

All citizens, regardless of type of employment, have the same right to an old-age pension . The minimum age at which a woman has the right to retire is set at 55 years; for a man this figure is higher - 60 years. For those who will not apply for a pension at this age, they will be able to count on additional coefficients when calculating their insurance pension. There is no maximum when you should retire. As we know, pop stars, film industry stars, teachers, and highly qualified doctors continue their activities almost until the end of their days. But this is not a standard, and everyone decides for themselves when to start receiving a pension.

As for filing an application, it is very important to have as many documents as possible on hand:

• papers confirming your contributions to the Pension Fund,
• a copy of the entry from the Unified State Register of Individual Entrepreneurs;
• certificate of registration as an individual entrepreneur;
• certificate confirming the closure of the individual entrepreneur;
• personal identification documents: passport, military ID, SNILS;
• labor, if you were once employed;
• an employment contract, if you carried out your activities using this method of employment;
• birth certificates of children (for a parent who was on maternity leave to care for a child).

All these documents are presented to the inspector, who, after filing the case, hands it over for a detailed calculation and assignment of the pension payment due to you based on age, length of service and contributions made.

The procedure for registering a pension for individual entrepreneurs

The procedure for registering a pension for individual entrepreneurs does not differ from the procedure provided for employees. The only difference is that in the latter case, this is often done by an accountant from the employer, in the former – by the individual entrepreneur himself.

The entrepreneur must submit documents to the Pension Fund in person or by registered mail, one month before the expected start of receiving a pension.

The standard package of documents includes:

• Passport;
• Marriage certificate for those who changed their last name after marriage;
• Employment history;
• Certificate from the Pension Fund about the transferred contributions;
• Documents that affect the change in pension points (for example, military ID, child’s birth certificate, etc.).

Verification of documents takes about ten working days. If the Fund gives a positive answer, then pension accrual will begin from the next calendar month. In case of refusal, the documents are returned to the applicant.

How can an entrepreneur increase his pension?

The law provides a number of opportunities to increase your future pension. Additional pension points (at the rate of 1.8 per year, and when caring for children - up to 5.4 per year) are awarded for the following periods (Clause 12, Article 15 of Law No. 400-FZ):

1. Military service.
2. Care for children under 1.5 years old, disabled people of group 1, disabled children or people over 80 years old.
3. Living with spouses - military personnel or diplomats at the place of service (work).

But it is clear that all of the above is quite difficult or even impossible to combine with running a business.

Another way is to retire later than the established age. It allows you to maximize your payout amount by more than doubling. True, for double growth you need to apply for a pension 10 years later (Appendices 1 and 2 to Law 400-FZ).

And the third option is to invest funds yourself. This can be either voluntary pension insurance or other options - real estate, stock market, etc. But this requires a fairly high level of income and special knowledge in the field of investing.

Also see “How to increase your pension due to Soviet experience.”