In a major policy shift, China will increase its retirement age for the first time in 70 years. This change comes as the country grapples with an aging population and a dwindling pension fund.
Currently, China’s retirement ages are among the lowest in the world. On Friday, Sept. 13, China’s top legislative body approved a plan to gradually raise the statutory retirement age starting next year.
Under the new policy, men will see their retirement age climb from 60 to 63, while women in blue-collar jobs will retire at 55, up from 50. Women in white-collar positions will retire at 58, instead of 55. The change will be phased in over the next 15 years.
The policy aims to address the rapid depletion of the pension fund. By 2035, China’s state pension fund is projected to run out of money, according to the state-run Chinese Academy of Social Sciences.
China’s working-age population has been shrinking since 2012 and is expected to continue declining. Over the next decade, about 300 million people are set to leave the Chinese workforce, nearly the size of the entire U.S. population.
Other measures included in the plan are an increase in workers’ contributions to the pension system by 2030 and a requirement of at least 20 years of contributions to access pensions by 2039. Retiring before the new statutory age will be prohibited unless an individual meets the new contribution requirements.
The previous retirement age was established in the 1950s, when life expectancy was around 40 years. Policymakers say the increase in retirement age is necessary to stabilize the economy and preserve the pension fund. However, the changes have not been well-received by the public, as the new law was quietly introduced and passed within days.
The issue of retirement age is not unique to China; it is also a topic of discussion in the United States, where it has been a subject of debate ahead of this year’s presidential election.
