In a significant move, China has decided to raise the retirement age for the first time since the 1950s. This change comes as the country faces an aging population and a shrinking pension fund. The decision was approved by China’s top legislative body on September 13, 2024.
Why the Change?
China’s population is aging rapidly. By 2040, almost a third of the population will be over 60 years old. This demographic shift puts a lot of pressure on the pension system. The current retirement ages in China are among the lowest in the world. Women in blue-collar jobs retire at 50, while those in white-collar jobs retire at 55. Men retire at 60.
The new plan will gradually increase the retirement age. Women in blue-collar jobs will now retire at 55, and those in white-collar jobs will retire at 58. Men will see their retirement age go up to 63.
When Will This Happen?
The changes will start from January 1, 2025. The retirement age will be raised every few months over the next 15 years. This gradual approach aims to ease the transition for workers and employers.
Impact on Workers
Many workers are worried about the new retirement age. Some feel that they will have to work longer in tough conditions. Others are concerned about finding jobs as they get older. On social media, some people expressed their frustration. One user wrote, “In the next 10 years, there will be another bill that will delay retirement until we are 80”.
However, some people expected this change. They pointed out that in many European countries, men retire at 65 or 67, and women at 60. They believe that China is following a global trend.
Economic Reasons
China’s economy has been slowing down, and the pension fund is running out of money. The Chinese Academy of Social Sciences said in 2019 that the main state pension fund would run out of money by 2035. This estimate was made before the COVID-19 pandemic, which hit China’s economy hard.
To address this issue, the new plan also includes changes to the pension policy. Starting in 2030, employees will have to make more contributions to the social security system to receive pensions. By 2039, they will need to have 20 years of contributions to access their pensions.
Health and Life Expectancy
The decision to raise the retirement age was based on several factors. These include the average life expectancy, health conditions, population structure, education level, and workforce supply in China. The average life expectancy in China has risen to 78.2 years.
Public Reaction
The announcement has drawn mixed reactions. Some people are unhappy and worried about the future. Others see it as a necessary step to ensure the sustainability of the pension system.
One social media user said, “What a miserable year! Middle-aged workers are faced with pay cuts and raised retirement ages. Those who are unemployed find it increasingly difficult to get jobs”. Another user commented, “This was expected, there isn’t much to discuss. Men in most European countries retire when they are 65 or 67, while women do at 60. This is going to be the trend in our country as well”.
China’s decision to raise the retirement age is a significant step in addressing the challenges of an aging population and a shrinking pension fund. While the move has sparked mixed reactions, it is seen as a necessary measure to ensure the sustainability of the pension system and the economy. The gradual implementation of the new retirement age aims to ease the transition for workers and employers alike.
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