Higher Retirement Age May Help Solve Pension Problem

A report in July by the University of Chicago's Paulson Institute said China's pension system faces pressing challenges, including unfavorable demographics, fragmented arrangements for different professionals that impede workers' mobility and social justice, and limited investment choices for pension funding.

Zheng Bingwen, director of the Chinese Academy of Social Sciences' World Social Security Research Center, told China Daily the country urgently needs to adjust the retirement age set in the 1950s at 60 for men, 55 for female white-collar workers and 50 for female manual laborers.

Zheng, who helped draft a proposal on pension reforms for the Ministry of Human Resources and Social Security, said the country has experienced a drastic demographic shift in the past six decades.

The fertility rate has fallen while average life expectancy has increased to about 74, he said.

"China should raise the retirement age as soon as possible, but it must take small steps and make the transitional period long enough for the public to adapt," he said.

Yang Yansui, director of the Tsinghua Center for Employment and Social Security, said seven workers support one pensioner aged over 65 nowadays. The worker-to-retiree ratio will be 2-to-1 in 2035 if the mandatory retirement ages remain the same, which would place huge pressure on the government.

Jiang Yongping, a researcher at the Women's Studies Institute of China, said ending the retirement-age gender disparity should be a vital part of the reform.

"I don't feel it will be a problem for female workers to retire at the age of 60," given that women live longer than men, she said.

She said the current retirement age arrangement discriminates against women, forcing them to retire five or 10 years earlier than men.

The negative effects of retirement at a younger age on women are profound and varied, she said.

These include some promising career women having fewer years to compete with men for promotion, and banks offering smaller loans to female applicants in view of the fact that they have less time to achieve a stable income than men.

"It is also a waste of talent for our country when educated Chinese women have to retire in their 50s," Jiang added.

More than half of the respondents to a survey of 4,500 people from four provinces by the All-China Women's Federation in 2011 agreed that women should work as long as men do.