Retirement age to be progressively raised in China
This is the government’s first step in gradually raising the retirement age under its five-year plan through 2025, with other provinces expected to follow suit later.
As Jiangsu calculates pensions partly based on how long each individual has worked, those who choose to defer could end up with higher monthly payments when they retire.
Amid staunch opposition against a blanket increase in retirement age, the province has opted for a voluntary scheme, which requires consent from both individual workers and their employers. Jiangsu will start allowing individuals to voluntarily defer retirement by a year or more.
It is still unclear how many workers will sign up to postpone retirement in Jiangsu. The province may not see as much of a difference in the number of workers who opt in and the amount in social spending from the scheme as it hopes.
China’s population is ageing rapidly even as its workforce shrinks. Demographics show that those in the 16 to 59 bracket has decreased 5% in the decade through 2021, while those aged 60 and above has jumped 45%.
This trend is expected to accelerate as the majority of the country’s baby boomers start retiring this year. Over 40 million are expected to retire between 2021 and 2025. Meanwhile, the working-age population is forecast to shrink by 35 million.
The official retirement age for most men is 60, while that for white-collar women is 55 and blue-collar women is 50, according to Nikkei Asia.