Debate on flexible retirement

0 Comment(s)Print E-mail China.org.cn, June 14, 2012

 



Editor's note: An increase in China’s retirement age is believed to be on the cards after a spokesman for the Ministry of Human Resource and Social Security said the ministry is conducting research into the retirement and pension system.

The news has drawn heated debate on China's internet, with some saying that postponing retirement could increase labor efficiency and help balance the pension funds while others said extending working years could reduce opportunities for job seekers.  [Have your say!] 

[Facts & figures: retirement ageportion of aging porpulation, pension fund deficit, pension system ]


   Experts and the public pitch in for the pension reform debate. Where do you stand?

The demographic benefits are diminishing. >>More

China's demographic benefits, in essence, stem from the economic growth and the social benefits achieved through increased human capital investment. This investment, however, cannot be sustained. 

--Mu Guangzong, a Professor and Ph.D Supervisor of Population Research Institute, Peking University

The aging problem is increasing the burden on the pension system. >>More

The most populated country in the world faces a serious aging crisis: the ratio of citizens over the age of 65 to the total population is currently 9 percent and is expected to reach 30 percent by 2065. At the same time, the ratio of the population aged 15-64 will fall to 56 percent of the total population. This aging problem will eventually increase the burden on the pension system, with the number of pensioners soaring rapidly while the number of contributors grows more slowly.

 --Hu Yifan, the chief economist of Haitong International Securities Group Limited

It would help cut the social security funding shortfall.

If China’s retirement age were to be extended by a year, the extension would add 4 billion Yuan to China's pension fund annually and cut expenditures by 16 billion Yuan. And the social security funding shortfall would be cut by 20 billion Yuan.

--Zheng Bingwen, director of the Center for International Social Security Studies of the CASS

The total pension amount one gets after retirement won't be affected. 

The current national pension system’s basic principles are "those who pay more pension and delay collecting their pension can get more." By working longer, the impacted personnel could enjoy a higher salary for longer. In the meantime, the increasing income of the pension fund would make the fund more sufficient.

--Lu Jinghai, a committee member of the China Association for Labor Studies

Certain occupations need more experienced workers.

Elderly workers are normally the ones with the most experience; they are more likely to do well managing employees and developing companies further. It's a waste of human resources if we let these experienced workers retire early.

--Holger Hanisch, an internet user

The unemployment situation will worsen.

Generally, labor supply has exceeded demand in China. If older employees do not retire job vacancies for new employees will inevitably shrink.

-- Liu Yulin, a waiting-for-job youth

It's not conducive to social equity. >>More

The possibility of being dismissed for blue-collar workers at their 40s or 50s is greatly increased. Once they are being dismissed, which means not only they no longer have a steady income, but also means that they still have to pay pension.

--Tang Jun, Secretary General of the Social Policy Research Center of the CASS

 

An employee has to continue contributing to his/her pension account after retirement and collect it several years later. This could create uncertainty and generate more financial burdens for the already retired and the unemployed.

--An anonymous official from the Nanjing Municipal Civil Affairs Bureau

People who want early retirement are mostly labor-intensive and low-income manual workers. As they get older, they will become physically incapable of coping with their job. Those working in state-owned companies and the public sector would only earn more. That’s not fair.

 --Ranmo, a Sina Weibo user

Filling the pension gap is not an excuse to delay retirement.

Priority should currently be placed on deepening the reform and speeding up economic development. As long as China's economy develops in a healthy way, its pension system will be safeguarded. It's not right to fill the pension gap by increasing the age at which employees can collect their pensions.

--Li Lin, director of the CASS Institute of Law

The government should not delay the retirement age without compensation. 

In many countries, the government provides a variety of compensation measures when the retirement age is postponed. Obviously, no one wants to work full-time when it's time to enjoy retirement.

--Wulebuzuo, a Sina Weibo user



Ageing problem is posing a huge challenge to China



Elderly care worries become more acute

The growing size of China's aging population begins to weigh down its economic growth. 

Retirees feeling squeeze as pensions shrink

As the tight employment market puts the strain on young job seekers, retirees are feeling an heavier burden. 

Halted in mid-career [By Jiao Haiyang/China.org.cn]

 China can avoid welfare pitfalls

By starting its social security and medical and health care reforms late, China can learn from mistakes made by the US and Europe.

Heavy load [By Jiao Haiyang/China.org.cn]

Ageing Japan a warning to China

Like Japan, China is also facing an ageing problem. The country's demographic shift poses a huge challenge to policymakers. 

The statutory retirement age
in major countries
 

Country

Men

Women

U.S.A.

66 

66 

France

62 

62 

Germany

65 

65 

Russia

60

55 

UK

65

60

Italy

57-65 

57-65 

Austria

65 

60

China

60

50-55

India

60

60

Belgium

65

65

Denmark

65-67

65-67

Greece

58-65

58-65

Iceland

67 

67 

Ireland

65-66

65-66

Netherlands 

65 

65 

Norway 

67 

67 

Pakistan 

60

60 

Spain

65 

65 

Sweden 

61-67

61-67

Switzerland

65

64

Vietnam

60 

55 

Tajikistan 

63 

58 

Turkmenistan 

62

57



 



  Conclusion

China's population is growing old before it could secure its wealth, so policymakers need to look beyond surface troubles such as funding for social security and address more pressing issues. Raising the retirement age is a short-term solution with limited results. It may scrape off small portions of the funding shortage, but it does not tackle more profound social problems created by an aging population such as declining morale and productivity.


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