Pension proposal raises debate in China

Life extension

People are also living longer across the country, with the average life expectancy currently standing at 73.5 years.

Some academics have recommended caution regarding increasing the retirement age, saying that such an adjustment should not be introduced for the sake of reducing the state's pension subsidies.

"The fundamental goal of any reforms for the pension system should be to guarantee the sustainable development of the funds," said Chu Fuling, director of the Social Security Research Center with the Central University of Finance and Economics.

The Chinese government introduced its nationwide pension system in 1997.

Chu said the state should take responsibility for subsidizing pensions and cover the pension payment shortfall in accordance with the Social Insurance Law.

If everyone in China worked one extra year, pension funds will be boosted by more than 4 billion yuan, while pension payments would be reduced by 16 billion yuan, according to research by Zheng Bingwen, head of the Social Security Research Center at Renmin University.

If the retirement age was raised to 65, China's workforce would be increased by 25 percent and the number of retirees cut by 28 percent, Zheng said.

The retirement age in most countries is around 65.

He noted that the aging population is creating pressure for social security funds.

"Many insured people now just contribute to pensions and have yet to spend pension savings, thus concealing risks," he said.

The total number of workers older than 15 and younger than 60 amounted to 920 million in 2010, but the figure is expected to shrink gradually between now and 2013, according to census results.

Pros and Cons

Some senior citizens support the government's proposal, including 60-year-old Huang Shujing, a preschool education expert from central China's Hubei province.

"I am still in good physical condition and it would be a pity for me to give up my expertise and experience over the years," Huang said. She was given approval to continue working by local authorities after reaching retirement age.

"I think many of my female peers working as teachers or doctors are quite willing to work past 60," she said.

Government and public employees tend to support postponing retirement and spending pension savings later, as observed by Zhang Zhanxin, a social security study expert with the Chinese Academy of Social Sciences.

But critics argue that the downsides of raising the retirement age should be more thoroughly examined.

In an online survey by People.cn, the official website of the People's Daily newspaper, about 93.3 percent of 450,000 respondents indicated that they oppose raising the retirement age

"I oppose delaying the retirement age and pension payment," said Li Hui, a 47-year-old accounting manager for a Japanese company in Shanghai, "since I have to spend three hours commuting during work days and the work pressure is huge."

"[Retiring at] 50 is my bottom line," she added.

Employment is another concern, as raising the retirement age will produce even more difficulties for young people and the poor, who are sensitive to the job market.

China creates between 10 and 12 million new jobs annually, of which about 3 to 4 million are vacancies left by retirees.

"At any time in the future, China will still have at least 700 million to 800 million workers, no matter how bad the aging problem gets," said Tang Jun, secretary-general of the Social Policy Research Center under the CASS.

"We have about 100 million people without a job or underemployed," he said, "therefore, employment will continue to be a top concern for a country like China."