The Chinese Communist authorities recently announced a plan to gradually increase the retirement age over a period of 15 years, while also raising the minimum years of contribution required to receive pension benefits from 15 to 20 years. This move has sparked widespread resentment among the population. Many people, feeling that their opposition is futile, have lost confidence in the government and are flocking to social security centers to opt out of the system in order to minimize their losses. The number of people withdrawing from social security is on the rise.
According to the announcement made by the Standing Committee of the National People’s Congress on September 13, starting from January 1, 2025, the statutory retirement age for male workers will gradually increase from the current 60 years to 63 years, while for female workers and female cadres it will be raised from 50 and 55 years to 55 and 58 years, respectively. Starting from January 1, 2030, the minimum years of contribution required to receive pension benefits will increase each year by 6 months, eventually reaching 20 years from the current 15 years. If individuals reach retirement age but have not paid contributions for the required number of years, they will need to extend their payments or make a lump sum contribution to qualify for basic pension benefits.
The authorities’ decision to gradually delay retirement age while extending the minimum years of contribution has been met with criticism from the public, who accuse the government of lacking contractual spirit and worry that they may ultimately not receive their retirement benefits. Many have realized that under the new policy, the amount of pension they will receive in the end may be less than what they have paid in social security contributions. Consequently, many people are choosing to withdraw from social security.
On mainland Chinese social media platforms, screenshots have been continuously posted by netizens showing successful online applications for withdrawal from the system. Some netizens have also shared their thoughts on opting out.
One netizen posted a screenshot of a “Stop Insurance Registration Declaration Form” with the caption: “For my child’s education, I persisted in paying for six years. Now, the other party reneges, forcing me to stop. If they don’t refund the money, it’s as if I worked for the other party for six years for nothing, deducting money every month more punctually than honoring my parents. Hard-earned money, where can we, ordinary people, go for justice.”
There are also numerous videos circulating online showing long queues of people waiting to withdraw from social security offices across various locations.
As per official regulations, receiving a pension requires making contributions for a sufficient number of years. Ceasing contributions equates to a loss of the previously paid contributions. However, many individuals believe that continuing to pay would result in even greater losses, leaving them in a dilemma.
A social media influencer on Weibo shared a comparison of losses in a video and expressed their dilemma over whether to withdraw:
He and his wife both purchased social security as flexible employees, with him buying in April last year and his wife in January the year before. The intention behind their contributions was to have a basic living guarantee in old age. However, upon the introduction of the new retirement age delay regulations, they considered opting out because upon calculation, they found the pressure of contributing to social security was increasing. He has contributed for 17 months, paying 1277 yuan (RMB) per month, totaling 21,700 yuan. If he withdraws, he can only get back 40%, which is 8,600 yuan. His wife has contributed for 32 months, paying 1195 yuan per month, totaling over 38,000 yuan. If she withdraws, she can only get back a little over 15,000 yuan. The couple has collectively contributed over 60,000 yuan, but by withdrawing, they would only receive 24,000 yuan back. Thus, the decision to withdraw has become a source of great distress. However, if they choose to continue contributing, it would require another 17 to 18 years. They are torn between enduring the current situation or opting out.
In response to the mass withdrawals from social security, an influencer provided an analogy in a video: Imagine going to a ramen shop with his wife. The owner states that a bowl costs 15 yuan, with men having to wait 60 minutes and women 50 minutes. After both pay, and having waited 40 minutes, the owner suddenly announces an additional 5 yuan per bowl and an added wait of 3 minutes for men and 5 minutes for women.
The influencer questions, is this reasonable? When prices and waiting times were agreed upon, suddenly changing them raises concerns about integrity. If the owner lacks integrity in this aspect, customers naturally worry that even after paying extra and waiting longer, the owner might backtrack at the last minute, leaving the customers with nothing. If the customers no longer wish to eat, the owner also will not refund the money. When customers are neither in nor out, the only solution is to “flip the table”.
Those categorized by the Chinese Communist Party as “flexible employees” are particularly debating and contemplating withdrawing from social security.
Netizen “Ge Yan” commented: “The minimum years for pension eligibility for flexible employees have now been extended to 20 years. Some are already considering whether they should withdraw. The most difficult situation is for those who have only contributed for a few years. They originally thought enduring 15 years would be manageable, but no one expected the circumstances to change like this. Those who have already contributed for over a decade may choose not to withdraw as they have come this far. However, those who have just started contributing should seriously consider whether they should continue. It’s unfortunate for those who have recently started contributing as withdrawing would only yield a small portion back, while continuing to contribute has no foreseeable end in sight and the amounts increase annually. In the current situation where earning extra income is difficult, it is truly distressing.”
Other netizen comments include:
– “Do they not hear the voices of the people?”
– “There is no sense of contract spirit; they change without warning.”
– “Flexible employment was no employment to begin with; it’s truly pitiful!”
– “For those who have contributed for 12 years… they thought they were seeing the light at the end of the tunnel.”
– “Only 8% is set aside in individual accounts, the remaining 12% is pooled. Try withdrawing from that!”
– “They turn a blind eye to the suffering of the people and ignore their voices. They act swiftly to benefit themselves, while it’s nearly impossible to touch the interests within the system.”
A Chinese citizen, Ms. Liu, speaking to New Tang Dynasty Television, stated that the Chinese Communist Party always promises big things and deceives the people, but nowadays many young people can access information online and see through the lies of the Communist Party.
Mr. Zhu, a resident of Guangdong, commented that the Communist government’s decision to delay retirement age was made without the people’s approval and is not in line with the law; it is an arbitrary decision by the authorities.
The Chinese Communist Party-controlled pension fund is facing severe deficits, while the country’s aging population is becoming increasingly prominent. The Chinese Academy of Social Sciences has openly stated that the pension fund may be depleted by the year 2035. It is widely believed that the authorities, regardless of public backlash, are determined to delay retirement primarily due to financial constraints. The official promotion of the retirement age delay downplays the fundamental deficit issue of the pension fund.