Wed, Mar 11, 2015 - Page 6 News List

China plans to raise age for retirement gradually: minister

Reuters, BEIJING

China’s pension fund is expected to come under tremendous pressure to break even in coming years and as such, the government needs to gradually raise the official retirement age to salvage its finances, a top official said yesterday.

Chinese Minister of Human Resources and Social Security Yin Weimin (尹蔚民) said the government would gradually raise the official retirement age, which is as low as 50 for some female workers, but said that any policy changes would be phased in over five years.

He did not say when the country’s retirement ages would be raised.

Analysts have long warned about China’s state pension crisis and the severe funding shortage, with some estimating that the cash shortfall could rise to as high as nearly US$11 trillion in the next 20 years.

Yin said the finances were not as dire for the moment, but warned about challenges ahead.

“The pension fund faces tremendous pressure in terms of breaking even in future,” he told reporters at a news briefing on the sidelines of the annual meeting of China’s parliament.

The fund’s income stood at 2.3 trillion yuan (US$367.3 billion) last year, exceeding its expenditure of 2 trillion yuan for the year, he said.

However, in coming years the proportion of Chinese over the age of 60 will rise to 39 percent of the population, from 15 percent now, Yin said.

That would depress the dependency ratio — the ratio of the number of people younger than 15 or older than 64 to the working age population — to 1.3 from the current 3.04, he said.

And as China’s economy slows to an expected 25-year low of about 7 percent this year, Yin cautioned that the country’s labor market would also face greater pressure.

Employment fell more year-on-year in January and last month compared with the same two-month period a year earlier, he said, but added that he was confident that China can still create more than 10 million jobs this year.

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