China is trying to delay its retirement age. Here's why
来源:World Economic Forum;发表于:2022-05-16;人气指数:286
China is trying to delay its retirement age. Here's
why
https://www.weforum.org/agenda/2022/05/china-change-retirement-age/
China's retirement ages have remained static as life expectancy has
increased.
Image: Unsplash/Ewan Yap
03 May 2022
Tripti Lahiri
Asia bureau chief at Quartz
*China is planning on raising its retirement age as its working-age
population shrinks.
*But the idea is unpopular with both younger and older workers.
*Existing pension systems are significantly underfunded and rely on
contributions from current workers to pay for older generations.
*The increased retirement age could harm birth rates and childcare
arrangements.
China has some of the youngest retirement ages in the world, which is
becoming a major problem for a country that is steadily aging.
The official retirement age for men is 60. Women in managerial positions
have a retirement age of 55, while blue-collar female workers can retire at 50.
In many other countries, leaving the workforce at 65 is the norm; China’s
earlier and gendered retirement ages have been in place since 1951, when
the country’s life expectancy was less than 50 years. (It’s now 77.)
China’s pension systems are drastically underfunded for the growing number
of people set to retire in coming years, and the costs of sustaining that net
will become prohibitive if people can continue to retire as early as they do
now. Last year, China’s 14th five-year work plan laid out how it intends to
address the pension problem, including by raising the retirement age.
When broached in the past, that idea has proven unpopular with the
young, who fear it will delay their own work opportunities, as well as the old,
who are looking forward to collecting benefits. But with a shrinking
working-age population, it makes sense for China to try and keep experienced
workers in the workforce—and paying into a social welfare system—for as long as
possible.
The number of retired workers is overtaking China's working-age
population.
Image: World Bank, Chinese Census
China’s pension problems
China is reforming its pension management and starting to
encourage private retirement savings. Yesterday (April 21), China’s
cabinet announced that people will be allowed to contribute up to around
$1,800 annually over their mandatory contributions, though it’s unclear
when this will begin. For now government funding is critical.
Pension systems are underfunded in part because local governments rely
on current contributions to pay older generations of state
workers—who themselves didn’t have to make contributions—rather than reserving
that money for future payouts. Company contributions to employee pensions are
already set high, and in 2020 the main state pension fund reported
its first annual deficit after the government allowed companies to reduce
contributions as a form of a pandemic relief.
Those gaps, coupled with growing evidence of China’s rapidly aging
population, are bringing new urgency to the retirement-age conversation. China
has yet to lay out a timetable for changing it, but has said the change would
be “gradual” and voluntary. That likely means starting by experimenting
regionally. In March, China’s coastal Jiangsu province, which neighbors
Shanghai, kicked off a pilot program (link in Chinese) to encourage
workers to voluntarily delay retirement, if both the company and employee
agree. Other provinces sounded out public opinion at meetings with employees
across industries last year, and several are currently drafting rules for their
own trials, according to state business publication, China Economic Weekly (link
in Chinese).
What’s also unclear is whether China intends to standardize retirement
ages for men and women. The current system truncates women’s professional
lives, and lowers the money available to them in retirement, as they’ve had fewer
years paying into the system.
China’s child care challenge
A better pension system isn’t the only thing China will need if it wants
to up its retirement age. Retired workers serve a key function for their
children—as safe, free child care. That means delaying retirement could incidentally
hurt another of China’s goals: getting younger women to have more children.
“There’s a lot of resistance to changing retirement age,” says Ye Liu, a
sociologist and senior lecturer in international development at King’s College
London. “People want to retire earlier. One of the main reasons is to look
after their grandchildren…the women of the one-child generation really rely on
parental and in-laws’ support for child care.”