Delayed retirement, national coordination of pension insurance China’s young people’s future sad?

China’s aging population is becoming more and more serious, and how to deal with “retirement” and “pension” has become the focus of policy. China’s Ministry of Human Resources and Social Security recently announced the implementation of national coordination of pension insurance, and Jiangsu Province also announced a plan to “postpone retirement” in order to deal with the problem of insufficient funds for pension social security. Some scholars are concerned that the move will cause inequitable regional distribution and raise questions about whether people will receive the expected amount of pension after retirement.

February 22, the Ministry of Human Resources and Social Security held a press conference, the Ministry of Human Resources and Social Security, deputy director of the Department of Pension Insurance Qi Tao introduced the implementation of the national coordination of pension insurance from January this year: will be deployed nationwide on the current balance of pension insurance funds between regions, “to ensure that pensions are paid in full and on time, which systematically solves the structural contradictions of the fund problem, and pension payments in difficult areas are more secure.”

In 2018, the Chinese government established and implemented a central transfer system for pension insurance funds to balance the burden of pension insurance funds between provinces, taking the first step toward national coordination. According to the official People’s Daily, a total of more than 600 billion yuan will be transferred across provinces during the four years between 2018 and 2021 when the central transfer system is implemented. Among them, the size of the cross-provincial transfer reached more than 210 billion yuan in 2021.

The netizens do not buy it: “developed areas are sucked blood”

However, such “inter-provincial transfer” is not loved by all people. After the release of the news, many netizens on microblogging described the move “is to let the rich provinces to help the poor”, “southeast to save the northeast”, “a pot of porridge for everyone to eat”, the fairness of the policy was questioned. The fairness of the policy has been questioned.

Wang Qingmin, a columnist living in Europe, analyzed to the station that this is because of the uneven development of China’s regions: “Some regions are developing faster and some are poorer, which leads to a higher and higher proportion of transfer payments, which also leads to more conflicts between regions.”

The Report on China’s Financial Development Index by Regions 2021, released by the Institute of Finance and Taxation of Renmin University of China in January, shows that in 2020, China’s pension surplus rate fell off a cliff, with only six provinces and cities, including Beijing, Tibet and Guangdong, having a positive surplus rate in the basic pension insurance fund for urban workers, meaning that pension insurance income exceeded expenditure in that year; the three northeastern provinces, Heilongjiang, Jilin and Liaoning The surplus of the pension insurance fund is even worse, with Liaoning’s pension insurance surplus rate at -42.9%.

“So there are not provinces that receive more than (have surpluses)? Let’s take their money and spend it, right? Those provinces with losses are happy, so at least they can share their money, but the provinces and cities with surpluses, of course, won’t do it.” Li Hengqing, a senior auditor at the U.S. pension fund and director of the Institute for Information and Strategic Studies in Washington, describes it vividly. He explained that because Chinese provincial and municipal officials are usually government-affiliated, they can only “respond” to national coordination at the behest of the central government, and cannot consider the livelihood of the people in the province or municipality as their greatest well-being.

Jiangsu’s “delayed retirement” trial to test the waters for the national “delayed retirement”? (Photo by Radio Free Asia)

Jiangsu’s trial of “delayed retirement” is testing the waters for the whole country?

In addition, the implementation of the “Measures for the Implementation of Basic Pension Insurance for Enterprise Employees in Jiangsu Province”, which will be implemented on March 1, has aroused public attention. The “measures” stipulate that, with the consent of the person and the relevant unit and after the record can “postpone retirement”, the minimum time to postpone retirement is not less than one year. This announcement has led to speculation about whether this move is a test of water temperature for the “delayed retirement”? In the planning notice issued by the State Council on February 21, in addition to improving the basic pension insurance and basic medical insurance system, as soon as possible to achieve national coordination of the basic pension insurance for enterprise employees, but also mentioned the implementation of “progressive” delay in the statutory retirement age.

China’s current retirement system stipulates that male workers can retire only when they reach the age of 60, female cadres when they reach the age of 55, and female workers when they reach the age of 50; manual workers in high-risk industries can retire when men reach the age of 55 and women reach the age of 45. Sun Yongyong, an associate professor at the School of Public Administration of Huazhong Normal University, told China Media First that the core idea of Jiangsu’s new “delayed retirement” is to give workers some choice in retirement age so that they can choose a more suitable retirement age according to the actual situation. The core idea of Jiangsu’s new “delayed retirement” policy is to give workers some choice in the retirement age, so that they can choose a more suitable retirement age according to the actual situation; while the national “delayed retirement” policy emphasizes the postponement of the legal standard retirement age.

In Wang Qingmin’s view, as the aging problem becomes more serious and the birth rate decreases, China’s choice from “delayed retirement” to statutory “delayed retirement” is an inevitable process when it comes to pension shortage: “In the face of a serious aging population, China’s retirement age will be lower than the statutory retirement age. With a severely aging population, delayed retirement has become almost a certainty. Delayed retirement is still likely to be gradually rolled out across the country, and will become more and more common as the aging process progresses.”

Some young netizens on the Internet in China are also unhappy about this, saying they “won’t be able to retire?” Others believe that the national coordination of pension insurance coupled with the delayed retirement age will only quench the thirst of the turtles, and that people may face the problem of receiving less or later pensions in the future. In this regard, Li Hengqing also expressed his concern: “You (pension) will not have it, and by that time it will be spent, but you don’t know.” He believes that the official planning for delayed retirement is actually in response to the lack of pension social security, the official lack of transparency and long-term planning under the money paid by young people now, I’m afraid there is no way to receive after retirement.

One netizen even concluded, “You may have been looking forward to receiving your social security pension as soon as possible, but when you receive it on the day after thirty years, you will find that it is really pathetic!”