BEIJING, Jun 7 – A Chinese government agency has revealed that it will propose a more flexible pension system to the central authorities at an appropriate time to keep a balance between employment and expected shortfall in retirement payments.
The Ministry of Human Resources and Social Security said in a written statement posted on its website Wednesday that the ministry is conducting research into the retirement and pension system, and will submit the proposal at an appropriate time after listening to comments from all circles.
In China most men retire at 60 and women at 50. And China is facing a ballooning deficit in the country’s retirement pension funds due to an aging population.
Almost all employees in China, in both private and state-owned organizations, have an individual pension account, into which both employee and employer have to make a monthly contribution. The employee can not withdraw any funds until he retires.
However, in line with current contribution ratio, the pension funds can only pay women about 40 percent of their working wage monthly for 15 years after retirement.
“From an academic view point, to gradually raise the retirement ages is an inevitable choice due to increasing life expectancy,” Zheng Chenggong, a professor with Renmin University of China, told Xinhua on Wednesday.
Some say raising the retirement age will only worsen the unemployment situation since generally labour supply has been exceeding demand in China.
“If the retirement ages remains unchanged, the current pension system will be unsustainable in the future,” said Zheng Bingwen, a researcher with Chinese Academy of Social Sciences.