The ruling party hinted at the change earlier this month when it released an overview of its five-year economic plan, which included a recommendation to “implement the postponement of the retirement age”. The specific measures of the plan are expected to be unveiled in March.
China’s retirement age has remained unchanged for more than four decades, at 60 for men and 55 for white-collar workers, even as life expectancy has increased. In countries like Japan and Taiwan, most men and women can retire and start receiving a pension at age 65.
The global average was 62.7 years for men and 61.3 years for women, according to an analysis of 70 countries by insurer Allianz SE.
The Communist Party’s statement produced a backlash nationwide, with tens of thousands of angry comments posted on Weibo, the Chinese equivalent of Twitter.
Among the most prominent complaints were those closest to retirement, expressing their anger at the prospect of delayed access to their pensions. Younger people argued that an increase in the number of older workers would reduce their employment opportunities.
Even so, China is moving ahead with the plans. “Delayed retirement is approaching,” the state-run China Business News said on the front page on Monday. He quoted unnamed officials as saying that a “gradual and flexible approach” had emerged from consensus among policymakers.
Experts say raising the age at which workers can claim state-funded pensions is essential to ensure the sustainability of the pension system. The Chinese Academy of Social Sciences, a government think tank, estimated in a report last year that the main urban workers’ pension fund would peak at 7 trillion yuan ($ 1 trillion) in 2027, before rising. fall to zero by 2035. The balance in The year 2019 was 4.3 trillion yuan.
Raising the retirement age would also help China maintain economic growth, slowing the rate at which the working-age population is shrinking due to falling birth rates. Beijing estimates that the number of people aged 60 and over will approach 487 million by 2050, up from 254 million last year.
China experienced a baby boom in the early 1960s, pushing more than 200 million people to turn 60 in the next decade. As a result, Chinese leaders will have no choice but to raise the retirement age during the next five-year plan which begins in 2021, said Wang Feng, a demographer at the University of California, Irvine.
“A lot of people will reach this age over the next five years,” he said. “If they don’t act now, it would impose a huge budgetary burden.”
China’s old-age dependency ratio, which compares the number of retirees to those in the workforce, will rise to nearly 33% by 2035, from around 17% this year, economist Cai said. Fang to reporters at a government conference Friday.
A public backlash derailed a previous proposal to raise the pension eligibility age in 2012. China’s Ministry of Human Resources and Social Security, which oversees pensions, has recommended raising the age from retirement during the current five-year plan period until 2020, but it has not been implemented.
While the ministry will be responsible for developing detailed implementation proposals, the top Communist Party leaders will need to approve the pension reform, Wang said. Civil servants are likely to implement reforms gradually in an attempt to reduce public discontent, for example by applying the changes to some professions or regions before others, he said.
Wang Xinmei, a pension economist at Zhejiang University, cited several other options that could also be adopted.
“We can start with a few simple steps, for example, allowing skilled people who want to work more to work more years on a voluntary basis,” she said. One proposal is to increase the age by one year each year, although this is “way too fast,” she said. “We could increase faster at the early stage, then slowly at the later stage.”