In-Depth: Delaying Retirement Is Inevitable – How Will the Plan Be Designed?(AI Translation)
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文｜财新周刊 周信达 许雯 汤涵钰 蒋模婷 崔笑天 黄蕙昭
By Caixin Weekly's Zhou Xinda, Xu Wen, Tang Hanyu, Jiang Moting, Cui Xiaotian, and Huang Huizhao
“延迟退休终于要来了吗？”
"Is Delayed Retirement Finally Coming?"
看到“自愿、弹性推进延迟退休”的新闻，“80后”上班族桃子（化名）有种预感，争论已久的延迟退休，很快就要实施。她打开手机计算器，做起小学算术题：自己已经在北京工作13年，按50岁退休计算，本来到2036年可以退休，还要再工作12年。假如今年开始推行延迟退休，按照讨论较多的几种渐进式延退方案估算，每一年延迟两个月，那要再多工作2年，到52岁退休；如果每一年延迟四个月，就要再多工作4年，到2040年54岁时退休。
Upon hearing the news about "voluntary, flexible implementation of delayed retirement," an '80s-born office worker nicknamed Peach has a hunch that the long-debated delayed retirement policy will soon become a reality. She pulls out her smartphone calculator and starts doing some elementary arithmetic: having already worked in Beijing for 13 years, under the current retirement age of 50, she would be eligible to retire by 2036, requiring another 12 years of work. However, if the delayed retirement policy is implemented this year—based on various gradual delay schemes widely discussed—she estimates that with a yearly delay of two months, she would need to work an additional 2 years, retiring at age 52. Should the delay be four months each year, she would need to work an additional 4 years, retiring at age 54 in 2040.
国内法定退休年龄为女工人50岁、女干部55岁，男职工60岁——上述规定从1951年延续至今，放眼全球，中国退休年龄几乎处于最低档。1981年时，中国人的平均预期寿命为67.9岁，到2021年，这一数字增长到78.2岁。
The statutory retirement age in China is set at 50 for female workers, 55 for female cadres, and 60 for male employees—a regulation that has been in place since 1951. Looking globally, China's retirement age is among the lowest. In 1981, the average life expectancy of Chinese citizens was 67.9 years. By 2021, this figure had increased to 78.2 years.
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- **Delayed Retirement Implementation:** China is considering a "voluntary, flexible" delayed retirement policy, potentially pushing retirement ages by 2 to 4 months annually. This would delay retirement age to 52 or 54 for an '80s-born woman.
- **Aging Population & Labor Shortage:** China's aging population is growing rapidly, with those aged 60+ doubling from 126 million (2000) to 297 million (2023). The labor force aged 15-64 is expected to shrink by 170 million over the next 30 years.
- **Impact on Social Support Systems:** Pension funds face significant deficits; social security may become unsustainable. Delayed retirement is seen as vital to address pension gaps, increase labor participation, and manage resources for elder care and healthcare.
**Summary**
China's statutory retirement age, which has been in place since 1951, is one of the lowest globally: 50 for female workers, 55 for female cadres, and 60 for male employees. As life expectancy in China has increased significantly, from 67.9 years in 1981 to 78.2 years in 2021, and the population aged 60 and above has also surged from 126 million in 2000 to 297 million in 2023, the country faces significant challenges from its aging population [para. 3][para. 4].
The prolonged debate over delayed retirement seems to be concluding as a “voluntary, flexible implementation of delayed retirement” is becoming more likely. According to various gradual delay schemes discussed publicly, this policy would incrementally increase the retirement age [para. 1]. The International Monetary Fund (IMF) estimates that China's labor force aged 15-64 will shrink by 170 million over the next 30 years, while the elderly population aged 65 and above will soar, further stressing social security systems [para. 3][para. 4].
Declining birth rates have exacerbated the issue, with 2023 recording a new low in births at 9.02 million. This demographic change deeply impacts China's economy and the sustainability of its social security system [para. 4][para. 5]. The burden of elderly care, which includes increased dependency ratios and rising healthcare costs, is straining public and private resources [para. 8][para. 9]. The current pension system, mainly based on a pay-as-you-go model, is predicted to face fund depletion challenges, amplifying the need for a delayed retirement policy [para. 10].
The Chinese government's approach to delayed retirement is reflected in a recent "Decision" by the Central Committee, which advocates for a gradual and flexible increase in the retirement age, balancing the needs of various demographic groups [para. 11][para. 13]. Two main reform approaches are observed: altering policy parameters within the existing system and adjusting the balance between pooled funds and individual accounts to encourage personal contributions [para. 11][para. 12]. Scholars argue that delaying retirement not only helps reduce the pension payment gap but can also expand labor force participation and optimize human resource allocation [para. 12][para. 14].
The timeline and implementation specifics of the delayed retirement policy are yet to be finalized. Since the first proposal in 2013, the government has discussed various plans, but concrete steps have been slow to materialize [para. 15][para. 16]. The introduction of flexible retirement could help address public resistance by allowing individuals to choose their retirement timing based on health, employment difficulty, and pension benefits [para. 22][para. 23].
However, there's a concern about how delayed retirement might crowd out youth employment amidst an already competitive job market [para. 80][para. 81]. In the short term, "younger elderly" entering the job market might displace older workers, especially in government and state-owned enterprises (SOEs), while the longer-term outlook suggests that addressing labor force shortages through delayed retirement will become necessary as the population ages [para. 82][para. 83].
To facilitate the delayed retirement policy's success, there need to be systematic support measures from industrial, fertility, and healthcare policies to mitigate potential negative effects on birth rates and family dynamics [para. 118][para. 120]. Scholars emphasize that creating a family-friendly environment is crucial to counteract potential declines in fertility rates due to delayed retirement [para. 127][para. 129].
Finally, the concept of healthy aging is essential to support extended working lives. The Chinese elderly population faces significant health challenges, hence integrating health improvement measures into policy reforms is critical [para. 150][para. 151]. The biopharmaceutical and elder care industries are pivotal in this context, requiring both innovative approaches and long-term sustainable investments to meet public health needs and improve the quality of life for the aging population [para. 155][para. 157].
[para. 1]
- 1951：
- The statutory retirement age in China was set at 50 for female workers, 55 for female cadres, and 60 for male employees.
- 1981：
- The average life expectancy of Chinese citizens was 67.9 years.
- By 2021：
- The average life expectancy of Chinese citizens had increased to 78.2 years.
- 2023：
- China's population aged 60 and above increased to 297 million, and the number of births hit a new low of 9.02 million.
- By mid-2024：
- Less than two years remain until the end of the 14th Five-Year Plan, and the reform plan for delayed retirement has yet to be disclosed.
- June 2024：
- The basic pensions for retirees from enterprises and public institutions were increased by 3%.
- July 18, 2024：
- The 20th Central Committee of the Chinese Communist Party's Third Plenary Session reviewed and approved the 'Decision of the Central Committee of the Communist Party of China on Further Comprehensive Deepening of Reform and Advancing Chinese-style Modernization,' proposing the reform of gradually delaying the statutory retirement age based on voluntary and flexible principles.
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