China will not raise the mandatory retirement age to address the
huge deficit in the national pension fund, a top official said.
Liu Yongfu, vice-minister of Labour and Social Security said in
an online talk with netizens on Wednesday, that current conditions
were not conducive to raising the retirement age.
He said the retirement age was low compared to some other
countries, but China has an abundant labour force.
The current policy must consider all factors, and will continue
to be implemented, Liu said.
The retirement age at present is 60 for men and 55 for women or
50, in some cases.
It was earlier reported that officials with the Ministry of
Labour and Social Security were studying the feasibility of raising
the retirement age and would put forward proposals to higher
authorities.
Liu's remarks have dispelled concerns in certain sectors that
raising the retirement age would worsen the unemployment
situation.
In a recent poll, 77 per cent of 2,743 people surveyed were
against the proposal.
The biggest problem confronting the ministry is "money," Liu
said.
The pension system was implemented in the 1990s. Before that,
China was a planning economy, with a policy of low unemployment and
low salaries. There was no pension system or provident fund.
Today, 43 million retired people are on the system's pay role. A
number of them have not contributed to the fund, and about 8
million have not contributed as much as they should because they
retired before the mandatory age.
The nation's social security fund was 800 billion yuan (US$102
billion) in the red at the end of last year.
The good news, however, is that collection methods have
improved.
Last year the fund received 509.3 billion yuan (US$63.7 billion)
and paid out 404 billion yuan (US$50.5 billion).
The ministry will continue to strengthen its collection methods
to ensure that retirees enjoy an adequate lifestyle, Liu said.
The government is now studying new investment management methods
to ensure that the fund's security and it value increases.
(China Daily December 22, 2006)