Shanghai city increases retirement age

Shanghai city has extended retirement age after facing shortfall in social security funds.

Beijing: Shanghai city, where the highest
number of Chinese pensioners live, has extended retirement age
after facing shortfall in social security funds, the official
media said on Wednesday.

Urban workers can postpone receiving their pensions
and continue working when they reach retirement age starting
October 1, according to the Shanghai human resources bureau.
The move is intended to make full use of human
resources and raise pensions with continuous input into
employees` social security accounts while they are still
working, the state-run China Daily reported.

The current legal retirement age in China is 60 for
male workers and officials and 50 for female workers and 55
for female officials. There was no mention of what would be
new retirement age.

According to the prevailing system, workers can
receive a monthly pension from the government`s social
security fund after they retire, but they have to pay for
their social security accounts for at least 15 years before
they retire.

Shanghai`s new policy does not seek to raise the legal
retirement age, but it is the first time a Chinese city will
delay the distribution of pensions for workers, as the
government appears to be addressing a financial shortfall in
its social security fund, the Daily reported.

Shanghai has the largest share of the aged population
among Chinese cities - about twice the national average.

Senior residents now account for more than 20 per cent
of the city`s population and there are more than three million
registered residents older than 60, according to official
figures.

In Shanghai, one retired worker is supported by 1.5
taxpayers, while the national average is 3.5 taxpayers for
every retired person.

The large number of retired people has created a
yearly shortage of about 10 billion yuan (USD 1.49 billion) in
the city`s social security fund, said Peng Xizhe, director of
Fudan University`s Institute of Population.

"It`s an international trend to delay the distribution
of pensions as workers become more educated and needed, and
also to fill up the shortage of the social security fund.

"But the government could also consider extending the
urban social security net to migrant workers so as to have a
greater variety of sources of funding to fill up its
shortage," he said.

The retirement age has triggered great public concerns
recently in China after Wang Xiaochu, vice-minister of human
resources and social security, said the central government is
researching the possibility of delaying the legal retirement
age. According to estimates, if the retirement age is put
off by a year, the shortage of the social security fund could
be alleviated by 20 billion yuan (about USD three billion) a
year.

Online survey here said more than 90 per cent of
200,000 participants polled in an online survey expressed
their opposition to extending the retirement age.

"China`s working population will stop growing by 2020
when it may face a shortage of labour, so it is inevitable we
need to postpone the retirement age at a proper time to
relieve pressure on young labourers," Peng said.

But the idea of delaying pensions or raising the
retirement age worries many labourers who bear heavy workloads
but are not paid much.

Miao Yang, a Shanghai-based editor, said she would
prefer receiving a stable pension after retirement.

"Even if I continue working after retirement, I don`t
think I would receive a lot of money. I`d rather get my
pension as soon as possible," she said.

She also said some government officials can enjoy high
incomes by extending their working years, which is unfair
compared with common workers.

According to a recent report by the Chinese Academy of
Social Sciences, China will become the most aging society in
the world by 2030. The country`s population above 60 years
will account for 28 per cent of its total by 2040.

A white paper issued by the MHRSS predicted that due
to the aging of the population, every two taxpayers would have
to pay for the social security expense of one retired person
by 2035 against the current situation of every 3.5 taxpayers
paying for one retired person.

PTI

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