China will not raise the mandatory retirement age to address the huge deficit in the national pension fund, a top official said.
Liu Yongfu, vice-minister of Labour and Social Security said in an online talk with netizens on Wednesday, that current conditions were not conducive to raising the retirement age.
He said the retirement age was low compared to some other countries, but China has an abundant labour force.
The current policy must consider all factors, and will continue to be implemented, Liu said.
The retirement age at present is 60 for men and 55 for women or 50, in some cases.
It was earlier reported that officials with the Ministry of Labour and Social Security were studying the feasibility of raising the retirement age and would put forward proposals to higher authorities.
Liu's remarks have dispelled concerns in certain sectors that raising the retirement age would worsen the unemployment situation.
In a recent poll, 77 per cent of 2,743 people surveyed were against the proposal.
The biggest problem confronting the ministry is "money," Liu said.
The pension system was implemented in the 1990s. Before that, China was a planning economy, with a policy of low unemployment and low salaries. There was no pension system or provident fund.
Today, 43 million retired people are on the system's pay role. A number of them have not contributed to the fund, and about 8 million have not contributed as much as they should because they retired before the mandatory age.
The nation's social security fund was 800 billion yuan (US$102 billion) in the red at the end of last year.
The good news, however, is that collection methods have improved.
Last year the fund received 509.3 billion yuan (US$63.7 billion) and paid out 404 billion yuan (US$50.5 billion).
The ministry will continue to strengthen its collection methods to ensure that retirees enjoy an adequate lifestyle, Liu said.
The government is now studying new investment management methods to ensure that the fund's security and it value increases.
(China Daily December 22, 2006)