Working till late

Initiated in the early days after the founding of the People's Republic of China in 1949, China's retirement policy was developed in line with the nation's social and economic status as well as its people's health and life expectancy at that time. Since the rapid aging of China's population has raised concerns about the sustainability of the current pension system based on a pay-as-you-go approach, further discussions on postponing the retirement age need to be put on the agenda.

People's life expectancy in many countries and regions has been prolonged due to social and economic development, leading to higher burdens on countries' pension systems. Therefore, many developed economies have delayed the age at which people can receive their pension in accordance with their changed social situations. The postponement of the retirement age can help increase the labor force supply as well as productivity.

The requirements for physical conditions, intelligence and working abilities have also changed. The types of jobs and the ages at which people can work have also changed. Therefore, aging does not necessarily mean people lose their entire working capacity once they reach a certain age. People ought to be entitled to choose their retirement age or make decisions with employers jointly. As social pensions are public resources and concern the interests of several generations, the minimum age of receiving pensions, obligations of insurance payment and pension rights need to be clarified based on public consensus and fairness.

The government needs to outline a road map for reform of the retirement policy to make it gradually accepted by the public, the sooner the better. Trials of a flexible retirement system can be launched. Employees and employers need to be granted retirement options. The authorities can also develop regulations on the actual pensions received depending on the age at which a person chooses to retire, it means the minimum retirement age (or age for receiving the full pension) should be redefined. A flexible retirement system can be implemented first in regions with large aging populations and start from people with high academic training and strong skills.

Postponing the retirement age calls for improvement of the current institutional settings. First, China's current law on protecting rights and interests of older people refers to them as citizens over 60.Although the law has stipulated that older people can provide consulting services, participate in the development and application of technologies, and engage in business and productive activities, the rights and interests of people above the mandatory retirement age of participating in social and economic activities need to be clarified during the reforms. The laws and regulations should be expanded to establish clear regulations on social security and injury at work for people who postpone retirement.

Second, the reform will affect labor participation of the generation approaching retirement and the childbearing of the coming generation. It is a common practice in China that grandparents take care of their grandchildren. While China has launched the three-child policy and the postponement of retirement age is expected, the policies may collide with each other due to high costs of bearing and raising children and the lack of public childcare services. Therefore, the government needs to expand social childcare services and introduce supporting policies and public services such as male maternity leave, household tax relief plans and elimination of hidden discrimination on women of childbearing age in the job market to facilitate the launch of new retirement age policies.

Finally, the authorities need to build a lifelong education system. As the development and application of modern technologies represented by artificial intelligence are changing the nature of work, traditional education and training systems can no longer ensure that workers can keep up with technological development and remain competitive in their work. Therefore, lifelong learning has become an important approach to maintaining economic vitality in the new era. The government should play a leading role in promoting lifelong learning, reform the education system for older people, and encourage enterprises and social organizations to participate in lifelong education, especially vocational education for those older adults.

Peng Xizhe is a professor and director of the Center for Population and Development Policy Studies at Fudan University. Song Liangjun servers at the same institution as the postdoctoral research fellow. The full text was published in the Journal of Chinese Social Security Review, Volume 3. The authors contributed the selected one to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.