Flexible retirement age
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China Daily, January 20, 2012
The Ministry of Human Resources and Social Security is studying the possibility of making the retirement age flexible, according to recent news reports. This will be good news for those who either want to retire earlier or would like to extend their working days to a later age.
A flexible retirement age will certainly be welcomed by many, as some employers have their own policy that requires their employees to retire earlier than the age stipulated by the State, and some keep experts or highly skilled professionals in their positions several years beyond the stipulated retirement age.
But the ministry must be clear about the problems they mean to solve by adopting the new retirement policy.
If they want to make up for the pension deficiencies of retirees, the new policy must be designed so that it is possible for employees to postpone their retirement age by as many years as possible.
The annual pension report for 2011 shows that the pension funds of 14 provinces and municipalities were in red and the deficit was as high as nearly 70 billion yuan ($11 billion). It is unrealistic for the central coffers to always subsidize the pension funds.
Extending the retirement age is a way out. The current retirement age is 60 for male employees, 55 for women officials and 50 for female workers. Some accuse this policy of being discriminatory against women. The adjustment being deliberated upon will be an opportunity to reconsider this discrepancy.
However, increasing the retirement age will at the same time further reduce the opportunities for young job seekers. If the flexible retirement age policy makes it even harder for young people to land a job, the impact of the growing unemployment rate on social stability will offset what the new policy achieves in reduced spending. This is what policymakers must take into consideration in amending the retirement age.
It is also not without reason for some to worry that the policy may be hijacked by some highly paid officials and managers, who may take advantage of the policy to extend their careers and thus make it less possible for younger blood to get promotions.
Clearly the designing of the policy will be complicated, as it will need to balance the needs of different social groups. But enough thought must be given to disadvantaged so that the new policy does not exacerbate existing unfairness.
