The Chinese Communist Party authorities said on the 26th. is studying the delayed retirement program, indicating that delayed retirement is on the table.
The mainland’s aging society is accelerating, and there is a huge funding gap in pensions, after rumors that the CCP is going to implement delayed retirement, sparking widespread controversy. On the eve of the Communist Party’s two sessions, Chinese officials said the Ministry of Human Resources and Social Security was studying specific reform proposals for delayed retirement.
On Feb. 26, CCP Vice Minister of Human Resources and Social Security Youjun disclosed the news at a press conference, adding that the retirement age in major economies around the world is generally above 65 years old.
As for the Chinese Communist Party’s claim to determine the timing of delayed retirement at this Time, financial commentator Wang Jian said that since the Communist Party’s two sessions will be held next month, it is likely that the proposal will be passed in the form of legislation and implemented at the two sessions.
Wang Jian believes that the Chinese Communist Party is implementing a delayed retirement age mainly to cope with two problems, one is the aging of society; the second is to ease the pressure on the basic pension insurance fund for enterprise employees, and the Chinese Communist Party is mainly to fill the hole in social security.
Commentator Wen Xiaogang believes that once the CCP postpones the retirement age, the late retirees will not only delay getting their pensions, but also continue to pay pensions because they are still working, so the CCP’s move can be called “killing two birds with one stone”, temporarily relieving the huge pressure on pensions, while those affected are working employees.
According to the current rules of the Chinese Communist Party, men retire at the age of 60, female cadres at the age of 55, female workers at the age of 50, employees engaged in underground, high-altitude, high temperature, heavy physical labor, and other types of work harmful to health and work in such positions for a specified number of years, men at the age of 55, women at the age of 45 retirement.
At present, there are two ways to talk about delayed retirement in mainland China, one is gradual, that is, delaying a few months every year, or delaying one year every few years. The second is to unify the retirement age for men and women to 60, and then extend the retirement age for both men and women at the same time.
The CCP’s delayed retirement is widely believed to be due to a huge funding gap in old-age pensions. On Nov. 20 last year, the China Insurance Association released a report on pensions, which talked about how China’s pension gap is expected to be between 8 trillion (RMB) and 10 trillion yuan, and that the number will further expand over time.
And in April 2019, the Chinese Communist Party’s Academy of Social Sciences had released an actuarial report on pensions, which predicted that pensions would be depleted by 2035, even with financial subsidies. If the government wants to fill the black hole of pensions, it needs to invest $11.28 trillion by 2050, which means the balance will be negative $11.28 trillion in 2050.
Xie Tian, a seminar professor at the Aiken School of Business at the University of South Carolina, has said that in addition to the problem of a rapidly aging population, there is a structural problem with the Chinese Communist Party’s pension problem, which has to pay for the pension expenses of the Communist Party’s huge bureaucracy, whose pensions and retirement benefits are the highest paid.
In addition, China’s social pension insurance fund has been accused of becoming a cash machine for corrupt officials and a small treasury for local governments to divert at will. Li Jinhua, the auditor general of the Communist Party’s National Audit Office, has said, “The irregular misappropriation of social security funds by local government officials in China is widespread, and the loss of funds is serious.”