Key Provisions of the Retirement Age Reform

Phased Increase in Retirement Age

• For male employees, the retirement age will gradually increase from 60 to 63 years over the next 15 years.
• For female employees, the current retirement age will rise to 58 years for those who retire at 55, and to 55 years for those retiring at 50.
• These changes will be implemented gradually, with small adjustments made over time to ensure a smooth transition.

Guiding Principles

The reform follows four key principles:

• Small step adjustments to ensure gradual change.
• Flexible implementation to accommodate individual and employer needs.
• Classified advancement, allowing different categories of employees to experience tailored changes.
• Overall consideration to align the policy with broader socio-economic goals.

Encouraging Employment and Entrepreneurship

Local governments are tasked with actively supporting employment opportunities for workers of all ages, fostering entrepreneurship, and ensuring that the rights and interests of workers are protected. Special attention will be given to developing and maintaining systems for old-age care and childcare services to address both population aging and labor needs.

Changes to Pension System

• The minimum required period for receiving a basic pension will gradually increase from 15 to 20 years starting in 2030, adding six months each year.
• Workers who reach the statutory retirement age but have not completed the minimum pension payment period can either extend their payments or make a one-time payment to qualify for a monthly pension.

Flexible Retirement Options

Employees with sufficient years of service may choose to retire earlier, provided they meet minimum retirement age requirements—50 or 55 years for women and 60 years for men. Additionally, employees and employers can mutually agree to extend retirement by up to three years, offering flexibility in retirement planning.

Key Measures for Supporting Implementation

Incentives for Longer Service

To encourage long-term employment, the reform introduces incentives where employees who work longer and contribute more to the pension system will receive larger pensions. The basic pension will be linked to the number of years contributed, the retirement age, and the amount of savings in the employee’s personal account.

Employment Prioritization

The government is committed to promoting high-quality, full employment, supporting employment services, and expanding training opportunities. Special efforts will be made to integrate older workers into the workforce and to provide employment assistance to vulnerable groups.

Protection for Workers’ Rights

Employers are required to uphold the rights of workers who exceed the statutory retirement age, ensuring they receive adequate remuneration, safety protections, and vacation entitlements. The reform also strengthens the legal framework around flexible employment and new forms of work, promoting job security for all types of workers.

Unemployment Insurance Extension

Employees close to retirement who are unemployed will have their unemployment insurance extended until they reach the new statutory retirement age. During this period, their pension insurance premiums will continue to be covered by the unemployment insurance fund.

Early Retirement Provisions for Special Jobs

Special provisions are in place for employees engaged in physically demanding or hazardous work, as well as those working in high-altitude areas. Workers in these categories can still apply for early retirement if they meet the necessary conditions.

Addressing Population Aging and Social Services

The reform acknowledges the growing aging population and the need for better social services. To address this, China will expand elderly care services, coordinating community and institutional care with medical and health services. At the same time, the government aims to develop an inclusive childcare service system, ensuring that the broader needs of working families are met.

Conclusion

This gradual retirement age reform represents China’s effort to adapt to an aging society while maintaining economic stability and labor market flexibility. By promoting long-term employment, improving pension incentives, and offering flexible retirement options, the government aims to support both workers and employers as the country navigates demographic shifts. As the reform rolls out, both businesses and employees will need to adjust to the evolving landscape, making the most of the opportunities and support provided by the new system.