What Factors Affect the Average Retirement Age?

A "Timeline of Progressive Delaying Retirement Age of the Ministry of Human Resources and Social Affairs" was circulated in the WeChat circle of friends, and many people began to calculate their retirement time against this table. Jin Weigang, director of the Social Security Research Institute of the Ministry of Human Resources and Social Security, told the First Financial Daily that the watch was not true. ^[1]

Progressive delayed retirement age schedule

Right!

A "Timeline of Progressive Delayed Retirement Age of the Ministry of Human Resources and Social Affairs" was circulated in the WeChat circle of friends, and many people began to calculate their own

The deferred retirement policy being developed by the Ministry of Human Resources and Social Security is a relatively stable plan that raises the number by one year every three years. The basic principle of the program is: walk slowly and gradually

Revenue and expenditure contradicts delaying retirement

In recent years, the imbalance in the income and expenditure of pension funds has forced the government to accelerate the pace of reform of the pension system. From the perspective of the operation of the fund, an important reason for the imbalance in revenue and expenditure is the increase in the system's dependency ratio: retirees have increased rapidly, and the proportion of those who have paid contributions has decreased.

The dependency ratio is one of the most sensitive factors in the basic pension insurance revenue and expenditure. The low retirement age of urban employees is an important reason for the increase in the system dependency ratio.

Li Zhen, a professor at the School of Public Management at Renmin University of China, said that delaying the retirement age can increase premium income and reduce pension expenditures. It can positively affect the financial status of the system in both directions and is an inevitable choice under the aging population.

The retirement age in China (50 for female employees, 55 for female cadres, and 60 for males) has not been changed for more than 60 years. In the 1950s, the average life expectancy of the Chinese population at the retirement age was only over 40. At the beginning of the reform and opening up, the retirement system under the Labor Insurance Law was 37 people working and one person retired. The life expectancy of the Chinese population is 73.8 years old, and the dependency ratio of pension insurance is 3: 1, but the retirement age has not changed.

Not only that, the problem of early retirement is also very serious. In addition to the tens of millions of early retirees during the state-owned enterprise reform, there are also special types of jobs that allow early retirement, and the number of early retirements is increasing in many places. Jin Weigang said that the current "retirement before retiring" problem is particularly prominent, and some regions retired early, accounting for 30% of retirees in that year. The actual average retirement age in China is only 54.

Some local social security directors also told this reporter that due to the 11th consecutive adjustment of pensions, the wages of retirees and employed employees have "inverted". Retirements are paid a few hundred yuan more than each month of employment. The number of people who require early retirement in various ways has increased greatly, and anyone who has a little relationship with a particular job category will apply for early retirement.

Early retirement has exacerbated the imbalance in fund revenues and expenditures, so some experts also believe that the "premature retirement" stance is currently blocked first, and then the retirement age is delayed. Judging from the plans formulated by some institutions, the delayed retirement age will be a package plan. Under the premise that everyone will be delayed, different groups of people will be used to formulate different steps of the retirement plan and use a long transition period to achieve the same age retirement. ^[1]

The Institute of Population and Labor Economics of the Chinese Academy of Social Sciences last week announced the "Social Science Edition" postponement plan, suggesting that the retirement age reform plan for employee pension insurance go in two steps.

The first step: When the integration of the pension system was completed in 2017, the distinction between the status of female cadres and female workers was eliminated, and the retirement age of women in the employee pension insurance was uniformly set to 55 years. Step 2: Beginning in 2018, the retirement age of women will be delayed by 1 year every 3 years, and the retirement age of men will be delayed by 1 year every 6 years until they reach 65 at the same time in 2045.

Delaying retirement is a reference to the international approach to aging in order to promote the long-term sustainable development of the old-age security system. This is a slow transition policy that will not have a large negative impact on society. ^[1]

Li Zhong, a spokesperson for the Ministry of Human Resources and Social Affairs, said that the overall consideration in formulating a delayed retirement policy is to grasp the nodes and pace of adjustment according to the trend of aging population and labor conditions. The retirement age of several months, and at the same time advance notice to the community, to give the public psychological expectations.

Although the government issues "announcement notices" from time to time, every topic about delayed retirement causes social controversy, and there are far more opponents than supporters.

A survey of 2,000 people in the 2015 Survey Report on the Retirement Readiness Index of Chinese Residents released by Tsinghua University on the 9th showed that 39% of respondents believe that the retirement age should remain the same, and 30% of respondents think that the retirement age It can be delayed, but there must be a limit. In China, only 10% of respondents believe that the retirement age can be extended with longer life expectancy.

The report also shows that respondents from different age groups gave diametrically opposite answers to the delayed retirement age. Most interviewees opposed delaying retirement before retirement, but turned to support after retirement. 51% of middle-aged (33-44 years old) respondents opposed delaying retirement, probably because of work pressure, but 77% interviewed after retirement. Those who turn to support delayed retirement may be considering the income and expenditure of pensions, hoping to increase the number of contributors and reduce the number of retirees like themselves.

The root cause of the public's objection to delaying retirement is that retirement is a benefit. The rigid principle of benefits determines that once it is reduced, it will be criticized. Not only in China, but the delayed retirement age will be opposed by the public to varying degrees in various countries around the world, but the situation in China is different from that in developed countries.

Tang Jun, a researcher at the Department of Sociology of the Chinese Academy of Social Sciences, said that the difference between China and many developed countries lies in the different stratum structures. The developed countries are dominated by middle class and dominated by white-collar workers. Relatively speaking, they are more likely to accept delayed retirement. And 70% of Chinese workers are blue-collar workers.

Zhang Yan, an associate professor at Peking University's Guanghua School of Management, said that as China's population is aging, it is reasonable to delay retirement. But it should also be noted that a large number of blue-collar workers affected by delayed retirement are worried about unemployment and low-income employment.

Because even if delayed retirement has not yet been implemented, this group of workers has encountered the problem of finding a job or a significant decline in income even if there is a job. They worry that the delay in implementing the retirement policy will further extend the period of unemployment or low-income employment, which will lead to a decline in their living standards.

Zhang Ye believes that under the employment policy, laid-off workers who are over 40 years old and men over 50 years old are classified by the government as having difficulty in employment. According to existing regulations, the retirement age of blue-collar workers is 50 years old for women and 60 years for men This means that it is mainly blue-collar workers who are less than 10 years away from the current retirement age. For them, delayed retirement is not a choice between work and retirement, but a choice between unemployment and retirement. ^[1]