CRI听力:China to Extend Retirement Age

As the topic has again provoked hot debate among the public, experts say it is time to put it on the government's working schedule.

Professor Zheng Bingwen is director of the Social Security study Center at the Chinese Academy of Social Sciences.

"The extension will have a significant effect on our pension system. As the average life expectancy of Chinese citizens has increased, the aging population has been exerting pressure on pension funds. If the retirement age remains unchanged, the current pension system will be unsustainable in the future. The problem is universal as it can be found in many countries in America and Europe."

Zheng says the current retirement policy was introduced in the 1970s when the average life expectancy was 70. The retirement age was set at 60 for male employees, 55 for women officials and 50 for female workers. But during the past 30 years, the life span of Chinese citizens has increased to 75 years.

Zheng Bingwen points out another serious issue:

"Early retirement is a serious problem. Each year, 10 to 20 percent of the country's retirees haven't reached the retirement age. But if one retires too early and his non-working life is longer than his working life, it just won't make any sense."

The annual pension report for 2011 indicates that the revenue in the public and individual pension accounts in 14 provinces and municipalities fell short when it came to paying the pensions and the deficit was almost 70 billion yuan. It is unrealistic for the central coffers to always subsidize the pension funds in the long run. Thus, extending the retirement age seems to be the best solution for filling the void. The extension would add 4 billion yuan to China's pension fund annually and cut expenditures by 16 billion yuan.

But some worry that extending the retirement age will reduce the opportunities for young job seekers. The number of university graduates will be around 6.8 million this summer. The Chinese Academy of Social Sciences estimates that more than 800,000 will remain unemployed upon graduation, not including unemployed graduates from previous years. The extension of the retirement age will make it even more difficult for them to land a job.

But Zheng Bingwen believes the extension won't have much effect on the unemployment rate.

"In the U.S., the retirement age can be postponed to as late as 70. But their unemployment rate is not higher than ours is. I see a similar situation in northern Europe. And it is often the case that many people in China seek other jobs after their retirements, taking up large number of job openings."

Zheng says making the adjustment will take years, and a quick jump in the retirement age from 60 years old to 65 is unlikely to occur. He advises the government to lay out a plan as soon as possible as we have already started late.

For CRI, I'm Wang Wei.