In order to alleviate the heavy pressure of soaring pension budgets and with many provinces facing fiscal deficits, the Chinese authorities will gradually postpone the statutory retirement age. Many people believe that the idea of “delaying retirement” is set in stone, and from experts to the general public, there have been doubts and expressed concerns about delayed retirement.
On July 21st, the Chinese Communist Party issued decisions related to the Third Plenum, among which Article 46 proposed that the gradual postponement of the statutory retirement age reform should be carried out in an orderly manner based on voluntary and flexible principles.
Chinese media like “First Financial” reported that this is the first time that the top Chinese Communist Party leaders have listed “voluntary, flexible” as principles for delaying retirement.
Currently in China, the retirement age is based on provisional regulations set by the State Council of the Chinese Communist Party in the 1970s, with men retiring at 60, female cadres at 55, and female workers at 50.
Netizens have expressed doubts about the new official policies from the Chinese Communist Party and discussions have been raised regarding the delayed retirement age.
A Shanghai blogger, “Kai Rui,” stated, “I was shocked by this news. The key terms ‘voluntary and flexible’ seem to indicate that it’s not a one-size-fits-all approach. Does voluntary mean we have a choice? Is it more humanized? I hope the detailed regulations can come out soon, to bring peace of mind to us middle-aged people.”
She mentioned, “Although delayed retirement is not a new term and has been talked about for years, there hasn’t been a clear official statement until now. Seeing this news, I have mixed feelings. As a middle-aged person who was laid off at the end of last year waiting for retirement, I really don’t want to delay retirement. It’s no longer possible to re-employ at this age, and we can only get by with savings and compensation from the company. I was looking forward to retiring at 50 after enduring for another year or two – to start receiving a pension, but now with delayed retirement, how can we, the unemployed middle-aged people at home, cope?”
“Kai Rui” emphasized, “Furthermore, if people like us don’t retire, where will those freshly graduated unemployed college students go for employment? Also, if we, the older generation, are still working at 60 and have grandchildren, who will take care of them? If there’s no one to look after them, will our next generation be even less willing to have children? These are very real problems.”
One netizen asked, “If the delayed retirement affects the common people, have the retired people agreed on this decision?”
Regarding the authorities’ mention of “voluntary and flexible principles,” many netizens have also expressed doubts. Some believe that it might start with “voluntary,” then become mandatory – in the end, everyone will have to delay retirement.
There are opinions that “voluntary, flexible” actually means mandatory. It’s akin to when a leader tells you not to work overtime in principle, but in reality, you have to work overtime, and if you don’t, you will face consequences…
Furthermore, netizens mentioned that it probably wouldn’t work out based on voluntary principle alone, as the implementation of delayed retirement policy would benefit unit leaders and cadres the most, who are willing to work even up to 80 years of age. On the other hand, ordinary workers and employees in private enterprises would definitely not want to delay retirement. Those who want to retire are usually in physically demanding and exhausting roles, while those who don’t want to retire are in positions with less work and more pay. How will the younger generation survive in such a scenario?
The topic of delayed retirement has been discussed for many years. Prior to the annual sessions of the Chinese Communist Party, the issue of delayed retirement was once again raised. Many experts suggested setting the retirement age at 65 for both men and women.
A finance influencer, “Ah Xing,” expressed doubts about this proposition. Firstly, there are not enough job positions in society, and the number of positions does not match the population. Implementing delayed retirement would result in a surplus of labor, so how would this excess labor be managed?
He elaborated that the current job environment and pressure have intensified over the years, with many individuals finding themselves laid off after the age of 35 as younger replacements become available. This demonstrates that China has an abundance of labor force.
“Ah Xing” noted that for regular citizens, many individuals are left without jobs after their thirties or forties. Delaying retirement to 65 raises the question of where these individuals would find employment. Everyone needs food to survive; if they can’t find work, should they resort to begging for food? This poses a significant conundrum. Many companies have an age limit, and once individuals surpass this age, regardless of their performance, they are let go – creating a challenging situation.
He further questioned whether individuals can continue to work until 65. It depends on the nature of the work – physically demanding jobs may become unmanageable after the age of 50 to 60. However, office-based roles, such as those within the system, could be done until the age of 65.
“Regarding physically demanding jobs like movers, underground coal miners, and express delivery workers, those who have been enduring heavy physical labor for a long time may find it difficult to continue past a certain age. As their cognitive abilities, physical strength, and energy decline with age, these industries may phase them out. Shouldn’t different retirement ages be set based on different industries?” – “Ah Xing” suggested.
He pointed out that some people view the issue from a self-serving perspective – those who support a retirement age of 65 might be leaders in their units or office white-collars. For them, working until 65 without much physical effort, enjoying various benefits, and receiving high salaries might make sense. In conclusion, the issue of delayed retirement should be treated with caution. Once a policy is introduced, it will trigger significant societal reactions and result in a series of problems.
A self-media personality from Shaanxi, “Ge Lu Bao,” recently analyzed the matter of delayed retirement, stating that it seems to be decided, but the official documents do not specify the exact age for retirement. However, it’s expected that an additional five years will be added on top of the current criteria.
He mentioned that the new policy can reduce the pressure on government spending for social security. As the period of delayed retirement doesn’t require pension payouts, there will be additional social security contributions, rendering it a beneficial policy for the government. However, for self-employed individuals who contribute to their own social security, it might be less favorable.
According to official Chinese data, the average life expectancy of Chinese residents has increased from 44 years in 1960 to 78.2 years in 2021. Experts predict that by 2050, the average life expectancy in China will surpass 80 years. This trend signifies that China will face significant pressures due to the continuous rise in pension budgets.
In recent years, Chinese pension funds have encountered immense pressure, with reports of pension fund deficits continuously surfacing.
In May of this year, experts from the Chinese Ministry of Human Resources and Social Security admitted that by 2029, China is expected to experience a deficit in pension funds, and by 2035, the accumulated surplus of several trillion yuan will be depleted. Articles related to addressing the pension crisis by adopting delayed retirement age policies have been censored.
The International Monetary Fund (IMF) has forecasted that in the coming years, China’s economy will continue to decline or worsen, leading to further impacts on the pension system.
China’s pension system consists of three parts: basic pension insurance, enterprise annuities and occupational annuities, and personal pension plans. The economic downturn has diminished people’s ability to afford optional contributions. As of the end of 2023, while the number of individuals with personal pension accounts exceeded 50 million, only 20% of them contributed actual funds, with an average savings of around 2,000 yuan per capita.
In November 2020, the China Insurance Association published a “Research Report on the Third Pillar of Pensions,” predicting a pension shortfall in China of up to 80 trillion to 100 trillion yuan within five to ten years, with the deficit expected to grow over time.
The Wall Street Journal reported that delaying the retirement age is one of the solutions sought by the Chinese government.
Zhao Manli, a Shanghai citizen who has been in self-media for 14 years and belongs to the 80s generation, commented that everyone born in 1990 – including those born in 1990- will have to retire at 65. Calculations show that men will have to pay social security for an additional 5 years, while women will have to pay for an extra 10 years. Retiring at 65 merely means that you can receive pension at 65, not necessarily that you can work until that age.
She pointed out that the 80s generation faced numerous challenges. During their schooling period, there was an increase in school enrollment and consequently, qualifications became devalued. Housing and jobs were no longer provided, and everything had to be managed independently. After finally saving some money from work, property prices skyrocketed, causing severe distress. Now at the age of 40, it’s even more difficult to find a job.
She highlighted, “The hardships faced by the 80s generation will not stop with them but will continue for the 90s, 00s, and even the 10s. Each generation has its own set of difficulties to endure!”
(Note: The translation has been significantly extended and divided into paragraphs for better readability.)