How should China raise retirement age?

Regulate contributions to build consensus

During the 14th Five-Year Plan (2021-25) period, the statutory retirement age will be raised in a phased manner.

Lu Quan, an associate professor at Renmin University of China, stressed that apart from uniformly raising the retirement age across the country, the authorities also need to adopt a flexible and incentive-oriented system based on changes, for example, in the job market to achieve success.

Yet such comments have not swayed the skeptics. Many are worried that given the general health condition of the Chinese people, it will be hard for many to continue working after 60, and some argue that delayed retirement means they will have to continue contributing to the pension funds for some extra years and get fewer years to enjoy the returns (as pension) after retirement.
Although the authorities denied the policy change is aimed at replenishing the pension funds, there is indeed huge pressure on the pension funds, especially because of the rapidly rising aging population.

Whether a consensus can be reached on delayed retirement depends on whether retirement is recognized as a right or a duty for the people. Currently, it's an obligation for employees to retire after reaching the legal retirement age.

Disputes do crop up over compulsory retirement, particularly among workers such as skilled technicians and supervisors. In China, the retirement age for men is 60, while for women it is 55 for "white-collar" workers and 50 for "blue-collar" employees. It has been so since the 1950s.

And despite the central government and local authorities issuing documents raising the retirement age for women cadres and experts to 60, its implementation has varied from place to place, and the courts have dismissed cases of women experts and cadres being forced to retire at 55 by giving precedence to the law over the government documents.

I once offered legal help to some women, who were forced to retire at the mandatory age of 55 or 50, including a pharmacist in Tangshan, Hebei province, 13 teachers in Wenzhou, Zhejiang province, and the director of the nursing department at a nursing home in Daxing district, Beijing. All of them failed the arbitration or lost the lawsuit.

Many women have complained that their right to work had been violated, because despite being managerial-level employees, they were forced to retire at the age of 50, the retirement age for women "blue-collar" workers.
In recent years, cases related to the retirement age have involved people in managerial positions who have to take a backseat five years before retiring. Both men and women whose careers have been cut short before their schedule retirement have suffered this way.

Such obligatory retirement system needs reform. Perhaps the right-standard retirement arrangement, followed by many countries, is more suited to China. For instance, in Italy, from Jan 1, 2019, all categories of workers have to contribute to the pension fund for at least 20 years and yet get pension only after reaching 67 years (applicable till 2026). Italy also has specific regulations on the number of years of contribution to the pension fund for different retirement ages including early retirement and delayed retirement.

In Australia, in July 2017, the age for receiving pension was increased to 65 and 6 months.

The retirement age will continue to increase by six months every two years until July 1, 2023, when it will reach 67.

Australia has also given its citizens the right to choose to work or not to work after reaching the retirement age.

Any mandatory retirement regulation based on age would go against Australian laws such as the Sex Discrimination Act 1984 and Equal Opportunity Act 1995.

In China's case, full pension should be paid to the people who have contributed their share of pension for at least 25 years, with the minimum requirement for getting pension being 20 years of contribution to the pension fund.

And accordingly, after employees, either male or female, contribute to the pension funds for at least 20 years, they should be free to retire in advance or continue to work.

Such a right-standard retirement system takes into account the different demands of the parties, and respects the will of the people.

As for the employees, they should be able to retire after reaching a certain age, because it will create room for young people to be employed and contribute to the pension funds.

In fact, it is an important way of building a public consensus on raising the retirement age.

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