What kind of pension can an individual entrepreneur expect when he retires?

How are pensions of an individual entrepreneur calculated?

Recently, a pension reform took place in Russia, which not only increased the retirement age for citizens, but also made some changes to the issues of pension calculation and security. Now all working citizens of the Russian Federation, including individual entrepreneurs, have the same conditions for retirement:

• reaching a certain age;
• having a minimum insurance period;
• availability of minimum pension points.

Individual entrepreneurs are required to pay their own contributions to the Pension Fund. This obligation arises regardless of the tax system that he applies. Even if he does not have employees, he must pay for himself to the Pension Fund.

After the pension reform, entrepreneurs became equal to ordinary employed citizens in pension accrual and security. To receive cash benefits in old age, the following conditions must be met:

• Reaching the required age. For women – 55 years, for men – 60 years. Since 2020, a gradual increase in the retirement age has begun. In 2020, women aged 55.5 years and men aged 60.5 years will be eligible to receive payments. Then, every year this figure will increase until women retire at the age of 60, and men at 65. The right to early retirement is still preserved for some categories of citizens.
• Availability of a minimum pension coefficient. In 2020 it should be equal to 9 points. But this figure will also gradually increase until it reaches 15 points in 2025.
• Availability of mandatory insurance experience. In 2020, this indicator began its growth at 7 years, and will stop only in 2025, when it will be equal to 15 years.

Important! If retirement age has arrived and the number of points is not equal to 30 or there is no mandatory insurance period of 15 years, then the person will receive a social pension. In 2020, its size is 5,034.25 rubles. The state also makes additional payments up to the subsistence level, which is established in the region of residence of the pensioner.

After receiving the right to retire, a person can continue to work or conduct business. The employer or the individual entrepreneur himself will have to make contributions to the PRF. Then the pension will be indexed and increased annually. Unemployed pensioners are indexed annually by the state.

What documents are needed

The list of documents depends on how the individual entrepreneur conducted his activities. If he worked under a standard employment contract, then he needs to bring the following documentation to the Pension Fund at his place of residence:

• identification;
• work book;
• all employment contracts he has;
• a certificate from the PRF, which will indicate that insurance premiums have been paid;
• other documents, if labor or business activity was carried out before 2002.

If the individual entrepreneur used a taxation system such as UTII, then you need to prepare:

• certificate of registration with the NSF as a taxpayer under such a system;
• if the activity was terminated before retirement, then a certificate from the Pension Fund confirming this fact.

If an entrepreneur worked under the simplified tax system, then he needs to submit:

• a certificate from the Pension Fund, which will indicate the amount of deductions before 2001, if such activities were carried out;
• a certificate from the Federal Tax Service on the transfer of contributions after 2001;
• archival documents for the periods before 01/01/2001 and before 01/01/1991;
• if the entrepreneur changed his personal data, then documents confirming this;
• other papers that Pension Fund employees may need to correctly calculate pensions.

Important! Some documents have a limited validity period, so you need to order them at the last minute.

Confirmation of experience for individual entrepreneurs

The length of service of an individual entrepreneur is not calculated according to the work book. As you know, entrepreneurs cannot reflect information about their work in the work book. Therefore, other papers are used as documents confirming entrepreneurial experience. In particular, we are talking about Certificates issued by the tax authorities at the place of registration. There you can also get certificates, which are sometimes additionally requested by the Pension Fund.

In addition, it is worth having documentary evidence of payments made “for yourself”. Of course, all accrued IPCs are reflected in the Pension Fund of the Russian Federation, but in some cases errors are possible and some payments are not made. Therefore, you should at least take care of statements of the movement of funds on accounts for the periods in which deductions were made.

Most entrepreneurs pay a fixed amount of contributions “for themselves”. In 2020, the contribution to the Pension Fund will be 29,354 rubles. With income over 300,000 rubles. you will also have to pay an additional 1% of the amount exceeding the threshold. But the maximum accepted contribution to the Pension Fund account will be 234,832 rubles, which will ensure the accrual of 8 pension points. With a minimum amount of deductions, about 1 point will be awarded for each year of entrepreneurship.

It is worth noting that the accrued points reflected in the account with the Pension Fund significantly affect the size of the future pension. With minimal contributions, an entrepreneur will need at least 30 years of “entrepreneurship” to secure a minimum pension. Therefore, there is no particular point in hiding income, because in this case you will not be able to earn money for a decent old age.

Some exception is the “northern experience”. The insurance experience of individual entrepreneurs operating in the Far North and equivalent regions is calculated in accordance with the law and gives certain preferences.

How to increase your insurance pension

Pensions for all citizens of the Russian Federation are calculated based on their length of service. Therefore, there are not many options for legally increasing it. This:

• do not apply for a pension after the conditions for its occurrence have occurred. For example, if a person does not receive money within 5 years after the onset of the grounds, then the amount of old-age payments will increase by 40%;
• Additionally, you can independently form a savings part. Several years ago this project was frozen. Now employers make contributions only for the insurance portion. If you make additional savings, old-age payments will be increased.

You can also voluntarily participate in pension programs of non-state funds. But Russians have little trust in them.

List of documents required to apply for a pension

Subsequently, individual entrepreneurs who have passed state registration will receive pension payments. Also paying mandatory taxes and not having any debts - make contributions to the Pension Fund. Citizens' data will be entered into the pension fund system and sent to the tax authorities.

Entrepreneurs must apply personally , collecting a package of documents.

The list varies depending on the situation:

• a personal statement - the citizen submits it to the Pension Fund office;
• citizen's passport + copy;
• work book (if available, it is given to hired workers);
• employment contract (to take into account the periods of work of a citizen as a simple worker);
• information document - issued by the pension fund department, which indicates the pension contributions transferred to the individual entrepreneur;
• documents confirming the reasons for changing the surname - for example, the woman got married;
• certificate confirming income (5 years of work are taken into account).

In addition, individual entrepreneurs who work to remit the single tax will need a certificate submitted by the tax authority. It confirms the existence and frequency of such payments, plus a certificate from the Pension Fund of the Russian Federation that the entrepreneur is ceasing to operate and, as a result, is being removed from general accounting.

If the individual entrepreneur used the simplified tax system, then he collects:

• a certificate from the Pension Fund of Russia (reflecting information about its contributions made earlier than 01/01/2001);
• a certificate from the Federal Tax Service (territorial branch), where he transferred the contributions; they will later be transferred to the Pension Fund (if the activity continued later than 01/01/2001);
• archival certificates (for entrepreneurs who worked before 01/01/2001);
• certificates that can confirm the change of name - if this happened and why;
• a certificate reflecting the citizen’s 0 debt to the Pension Fund.

The list of documents is really wide and has variations. It is worth clarifying this by contacting the Pension Fund in advance. The staff will tell you what to bring.

Additional odds

It is possible to use additional pension coefficients when calculating your pension. There are several of them, and they are all used in combination or separately. This:

• coefficients that are used when calculating the basic pension;
• coefficients that are multiples of 5;
• coefficients that are awarded for years of military service. For each calendar year that a pensioner served in the ranks of the RF Armed Forces, he is accrued an additional indicator of 1.8;
• coefficients for each maternity leave, which is provided to every woman by law. For 1 child 1.8 points per year are awarded, for 2 – 3.6, for 3 and subsequent – ​​5.4 points per year;
• coefficients from the maximum salary. For each month the additional indicator is 2.3.

If a pensioner conducted labor and entrepreneurial activities, then the pension is calculated taking into account many nuances.

Features of calculating the pension of an individual entrepreneur

What pension does the individual entrepreneur receive? The individual entrepreneur's insurance pension consists of 2 parts:

• fixed, established by the state for all categories of citizens;
• replaceable, which depends on the number of pension points and the cost of one point at the time of registration.

The formula for calculating the basic part of the pension can be presented as follows:

Pension = Fixed Ch. + (SumPB*StPB), where:

• An individual entrepreneur’s pension is the cash equivalent that an entrepreneur will receive when pension conditions are met;
• Fix. Ch. is a fixed part of the pension. In 2020, its size is 5,334.19 rubles;
• SumPB – the sum of accumulated pension points at the time of retirement;
• StPB – the value of one pension point at the time of retirement.

Accumulated points are also calculated using a specific calculation formula. This is: SumPB = (SumStrVz/PokNormStrVz) * 10, where

• SumPB – the sum of accumulated pension points at the time of retirement;
• SumStrVz – the total amount of insurance premiums that were paid by the entrepreneur for the entire period of his labor and entrepreneurial activity;
• PokNormStrVz is an indicator of the standard of insurance contributions to the PRF. It sets at the federal level. In 2020 it is equal to 1.15 million rubles. To calculate this value, 16% is taken.

How is an individual entrepreneur's pension calculated? From 2025, the minimum length of service to receive an old-age pension will be 15 years. You will also need to have at least 30 earned odds.

How can an individual entrepreneur confirm his length of service for a pension and what is included in it?

For people who work for others throughout their lives, a document confirming their insurance experience is a work book, in which employers make appropriate entries at each new workplace. By hiring employees to his enterprise on a permanent basis, an individual entrepreneur becomes an employer and is also obliged to keep work books for everyone with whom he has entered into an employment contract. However, he cannot make entries in his own work book, and upon subsequent employment at foreign enterprises, an entry about his previous activities as an independent individual entrepreneur is also not made.

Confirmation of the beginning of its activities is the Certificate of State Registration issued by the Federal Tax Service at the place of registration, but the fact of termination is confirmed by the Certificate of termination by an individual of activities as an individual entrepreneur. It is these two documents in the established form No. P61001 and No. P65001 that in the future will be able to confirm the necessary periods of activity of an individual entrepreneur for calculating his length of service. In addition, given the mandatory need to make voluntary payments to the Social Insurance Fund, information on insurance premiums paid will be needed.

According to the Rules, in order to confirm periods of activity as an individual entrepreneur for the years preceding 1991, you will need to provide a document from the financial authorities or a certificate from the archive confirming the payment of insurance premiums. In order to confirm activities for the periods from 1991 to 2000, as well as for periods after 2003, you will need to provide a certificate from the territorial body of the Social Insurance Fund.

As noted above, periods of individual entrepreneurial activity count as an individual entrepreneur if all the necessary conditions listed above are met. But it happens that periods of work are interrupted due to circumstances, and the legislator equates some of these circumstances to work activity or simply includes them in the insurance period, which will make it possible to later claim a higher pension.

As for breaks in work due to illness, or in connection with the birth of a child, as well as for caring for him until he reaches a certain age, if the individual entrepreneur was subject to social insurance during these periods, that is, he paid insurance premiums on time and in full in the Social Insurance Fund, they are certainly included in the insurance period.

As for other, more serious life circumstances, according to the current legislation, some of them also make it possible to take into account their duration in the insurance period, if there are supporting documents, namely:

• periods of work as a deputy in the Federation Council or State Duma (obviously, it will not be difficult to confirm these facts);
• periods of work in state or municipal positions, which can be confirmed by simply providing a certificate from the Social Insurance Fund;
• periods of military service, as well as service in internal affairs bodies, fire and criminal executive services, as well as bodies for control of the circulation of narcotic and psychotropic substances, are confirmed by providing military ID cards, certificates, labor records and documents from their archives;
• periods of imprisonment during which the citizen was involved in paid work, which is confirmed by documents from the institution where the punishment was carried out.

In addition to the above, the Rules also contain other possible periods of work, activity or service that may be included in the insurance period.

What else you need to know about pensions for individual entrepreneurs

Experience is also important for an entrepreneur. When a person conducts official work, he knows that all periods when the employer made contributions to the Pension Fund for him will be counted towards his pension. The situation is similar with entrepreneurs. This is how the insurance record is kept.

All those periods when he conducted his business activities (the applied taxation system does not play a role) and made contributions to the PRF for himself are taken into account in his insurance experience. If during his life he both worked and was an individual entrepreneur, then the calculation of the individual entrepreneur’s length of service for calculating a pension includes all periods.

Important! If “gray” entrepreneurial activity was carried out, contributions to the Pension Fund were not made at all or were made in a smaller amount, then you should not count on a decent salary in old age.

Not everyone knows that there is a real chance to significantly increase their pension payments. To do this, you need to show restraint and not apply for pension accruals for several years. Although, after increasing the retirement age, this is quite difficult to do. In addition, during the “seasoned” years, it is necessary to work regularly or conduct business activities, and make mandatory contributions to the Pension Fund.

If you work 4 years after reaching retirement age, payments will be increased by the amount of contributions made. In addition, the state will also provide additional support measures. After 5 years, the pensioner will have 36% added to the basic pension and 45% to the pension points. The overall growth rate will be almost 40%

If you hold out for 10 years, the increase in pensions for individual entrepreneurs will be more noticeable - more than 2 times. At the same time, previously accumulated points will increase by 2.3 times. The increase will be noticeable!

What pension will the individual entrepreneur have? There is a calculator on the PRF website that you can use to calculate future payments. The amount received will be approximate, but you can use it as a guide. It is necessary to enter the initial data correctly, then the resulting value will be as close as possible to the exact one.

Will the individual entrepreneur receive a pension? And is it worth waiting for it at all?

An individual entrepreneur or individual entrepreneur - in accordance with the Constitution of our country, has the right to pension provision. But the calculations and formulas are different. Also, the conditions for accounting for insurance contributions differ from people working in conventional structures. Only one thing remains unchanged - timely deduction of taxes and contributions to the Pension Fund. Laws change and are supplemented so quickly that it is worth following changes in pension legislation on the Internet - there are always current figures and new facts.

2018 made changes for individual entrepreneurs

Last year, a package of bills appeared that stipulate the conditions and size of the pension - the amount of future payments is directly proportional to the individual entrepreneur’s contributions that he made to the Federal Tax Service. Last year, the fee payment scheme was simplified - previously they had to be paid to various authorities and funds, but now only to the tax authority. If an individual entrepreneur has employees, then the appropriate taxes should be paid for them - in accordance with the laws of the Tax Code, in particular with Chapter 34 “Insurance premiums paid in the Russian Federation” of the Tax Code of the Russian Federation.

Reporting must be submitted strictly - after each quarter. If there is a staff, then annually, before March 1, report to the Pension Fund on the length of service.

Until last year, the amount of deductions for individual entrepreneurs was influenced by the minimum wage, today this is not the case - there is a fixed rate of deductions for compulsory medical care. insurance and insurance contributions to the Pension Fund. Moreover, there are different approaches to different amounts of profit. So, if the monthly profit is 300 thousand rubles. or more, then an additional one percent is deducted from the larger amount. But there is also an upper limit, prescribed in the laws, above which payments are impossible. Ordinary individual entrepreneurs rarely reach the upper limits, so almost everyone deducts insurance in accordance with a fixed coefficient. Today, the policy is aimed at ensuring that individual entrepreneurs make as many contributions as possible, but this does not greatly affect the amount of the old-age pension.

Registration and calculation of pensions for individual entrepreneurs

Another principle for taking into account insurance experience and the rules establishing the amount of payment for individual entrepreneurs do not affect the general principles of calculation.

Thus, the pension will depend on points and odds of at least 11.4. The concept of the latter consists of the sum of points for the entire period of work until the date of retirement. In accordance with the laws of 2015, they completely depend on length of service. For example, for a minimum length of service (today it is 10 years) you can get 16.2 PB, by 2025 the individual pension coefficient should be at least 30. There is also a value for each point, today it is equal to 87.24 rubles. But this is not a static figure and is subject to change.

The age factor remains unchanged - entrepreneurs, like employees, retire in accordance with the reform of the pension system; men retire at 65, women at 60.

The basis of the total length of service is the period of official deduction of insurance premiums. And if the individual entrepreneur has been able to cope with these contributions for many years, then the point system will help reimburse the entrepreneur’s contributions during retirement - in the form of amounts, the amount of which is not yet very large.

Calculation of the pension coefficient - step No. 1

The individual pension coefficient or IPC is assigned to the entrepreneur for each year and is made up of different values:

• Amount of points;

• Increasing coefficient;

• Inflation rate in percentage.

If the income of an individual entrepreneur for the year is less than three hundred thousand rubles, then the amount to be paid is 26,545 rubles. If more, then + 1%. The formula for calculating this indicator has been determined: IPK = (IPKs + IPKn) x KvSP.

Moreover, the second indicator is points until 2015, it was in this year that the first reform of the pension system was carried out and points, coefficients and other difficulties in calculating future “dividends” were introduced. The second period is calculated after this year, the last value is the coefficient of increase in the IPC.

Calculating an individual entrepreneur's pension - step No. 2

How to find out your individual entrepreneur pension - calculation formula. The Fund has developed many schemes and formulas that are supposed to be used when calculating pension amounts. Moreover, only a PF representative can understand all the nuances of indexing, applying coefficients and adding or subtracting points. But still, using mathematical formulas, you can pre-calculate your future pension:

FV x PC + IPK x SB x PC = SP

• 1st abbreviation – annually changing fixed payment figure;

• 2nd - bonus coefficient, if the individual entrepreneur is already retired, but applied years later;

• 3rd - individual pension coefficient, summed up points for the entire length of service;

• 4th – cost of a point for the current period;

• 5th – pension coefficient.

As a result, SP is an individual entrepreneur’s insurance pension.

Here, when calculating the IPC, there are a number of difficulties, since this value was calculated differently in different years - in accordance with different regulations, government regulations and other legislative frameworks. Therefore, to calculate this important figure, you need to understand that the entire period of experience should be divided into three periods:

• Until 2002;

• 2002-2015;

• After 2015.

Point restrictions for different years (maximum allowed points):

• 7.39 PB 2020;

• 7.83 2020;

• 8.26 2020;

• 8.70 2020;

• 9.13 2020

It’s difficult to cope here without a mathematical education - after all, every year of an individual entrepreneur’s activity must be multiplied by exactly the figure determined by the state. It is almost impossible to obtain an accurate calculation on your own; it is worth resorting to the services of specialists from the same fund. But it is not a fact that the calculations will be made correctly and accurately. To ensure your insurance, you can hire lawyers specializing in pensions.

Increasing points will not give a noticeable increase

To increase the number of points, you need to increase the coefficient. It should be noted that even successful individual entrepreneurs who spent more than a million rubles monthly have a small pension. That is why this issue is not relevant for them while business is being conducted. But if it is liquidated or the entrepreneur’s health condition deteriorates sharply and he cannot engage in his usual activities. Only then do they apply for a pension calculation and begin to receive it.

Are there options for increasing it? Yes, there are a number of legal ways:

1. Voluntary provision - official registration of guardianship over an infirm relative or even a stranger, then annually, while the disabled person is being cared for, 1.8 points are calculated - = approximately plus 150 rubles;

2. The second and subsequent children in the family - then for the second plus 3.6 points - 270 rubles. For subsequent children - up to 5.4 points;

3. Work after retirement age - assignment of an increased coefficient. - 2.11 points.

All these conditions do not justify further accruals - proportionally related to points. After all, who would be satisfied with an increase of 140-150 rubles? Namely, such increases are what we are talking about when increasing points and calculations.

How to confirm your work experience

In accordance with the law, standard work books are not provided for individual entrepreneurs. How do you keep track of your experience? There are a number of supporting documents for this:

• Notification of registration in the register;

• Unified State Register of Entrepreneurs;

• Certificate of completion of entrepreneurship;

• Documents confirming payment of taxes and contributions to the Pension Fund.

If before 2017 a document was required - registration of an individual entrepreneur, now it is not needed, since it is simply not issued, and instead there is a notification of registration.

When paying taxes, the entrepreneur must keep all documents. Since they will be the confirmation of payments in the required amount and on time. The experience of an individual entrepreneur is also confirmed only by these documents.

When entrepreneurs lose important documents, they can be requested from the archives of the relevant structures. It is better, of course, to have specific folders and put all the documentation together - by year.

How to apply for an individual entrepreneur's pension this year?

The registration is standard, you must provide documents six months in advance that can be brought to the Pension Fund of your area:

• Personally;

• Entrust and confirm with an official power of attorney to a loved one;

• Online through the Pension Fund website;

• Local MFC.

If an entrepreneur saves a pension on his own in non-state funds, he will receive all payments in this fund - only for the funded type of pension.

Choose a method that is convenient for you to calculate and process these payments. But it is better to receive all consultations before collecting documents in person, by coming to the authority. Although today the electronic service meets all the criteria of efficiency and information. So, the choice is yours.

But before applying, you should think about maybe working as an individual entrepreneur - after all, there will obviously be more money than the state has prepared.

How to improve your standard of living in retirement?

It is impossible to improve your standard of living with pension money. Therefore, any person should continue entrepreneurship as long as he breathes and moves. Otherwise there can be no talk about any level. Or rather, maybe about the level below the poverty line. Only work, entrepreneurship, connections, contracts. Income will help you meet a comfortable old age. And it’s better to find a reliable replacement in your field - a son, a nephew. Brother, so that someone will continue to earn money through honest work, and then you won’t have to live in poverty and wait for your five-plus thousand.

It is better to contribute savings to non-state pension funds and have a savings part so that you can use it in old age. Think in advance about the dividends that you are entitled to receive in those years when it will be difficult to work. Don't rely on formulas and scores. Indices and coefficients are still extremely low, and the total amount after calculations is sad and unworthy.