Pension fund woes could mean rise in retirement age

(China Daily)
Updated: 2006-11-28 09:31

Early retirement can alleviate some unemployment pressure in the short term, but over time, it will negatively affect social security and economic development in an aging society, according to the magazine.

According to the United Nations, China meets all the criteria of an aging society the population over 65 has exceeded 100 million, accounting for 7.7 per cent of the total; and the population over 60 accounts for 10.5 per cent of the total.

Shanghai is already considering allowing senior technicians and engineers to continue working for five to 10 more years after they reach their retirement age, Shanghai Morning Post reported last week.

However, a central government official is reported to have told China Economic Weekly that raising the retirement age too fast would exacerbate the unemployment situation.

The ministry estimates that at least 24 million urban residents need jobs each year, but there are only 11 million openings. In addition, there are also 100 million surplus labourers in the rural areas. "We need to balance pension fund needs and unemployment," said the official.

Making matters worse is that about 7.1 billion yuan (US$905 million) of the 2-trillion-yuan (US$255 billion) social security fund has been misappropriated, according to the National Audit Office.

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