Saturday, February 15, 2014

Retirement age around the world

China is thinking of raising its retirement age and there is a reaction as expected. Here is some information about the changes and the reaction to the proposed changes.

An overwhelming majority of those questioned in an online survey expressed opposition to a proposal pushing back the retirement age.
Nearly 95 percent of some 25,300 polled citizens said they were against the prospect of the retirement age being increased, according to the survey jointly conducted by the Beijing-based China Youth Daily and Sohu, a leading news portal.
The retirement age in China is 60 for male employees, 55 for female officials and 50 for female workers. Retirees can claim a pension immediately.
Delaying the pension age would relieve the State's financial burden in supporting a rapidly aging population, according to a proposal released by Tsinghua University earlier this month. It suggested that the government should lift the pension age for workers, both men and women, to 65 from 2030.
Yang Yansui, director of the Tsinghua Center for Employment and Social Security and one of the drafters of the proposal, said it is a matter of urgency for China to lift the pension age given the accelerated imbalance between the working-aged population and the number of senior citizens.
Currently, it takes about seven workers to support one pensioner over 65.
If there is no change to the system, in 2035, it will take two workers to support a pensioner and this would place a heavy burden on the economy, Yang said.
However, about 91 percent of respondents said that they were unwilling to work until 65. Most of the surveyed were aged between 24 to 53, according China Youth Daily on Thursday.
Some 60 percent believed they would be physically incapable of working up to 65 and half of them said increasing the retirement age would make it harder for younger people to get work.
There is no one-size-fits-all solution in terms of the retirement age and the government should allow people to have more options, based on health and their attitude, most people agreed that the retirement age for government officials should not be pushed back as this would increase the taxpayers' burden.
Liu Yiran contributed to this story

France is using another strategy which will effectively raise the retirement age without officially doing so. Here is some information about how they are trying to reform their system.

The government's plans to reform France's debt-ridden pension system , to be presented to ministers this month, fail to address the core problems and could spark fresh tensions with Brussels, experts say.

Pension reforms are highly contentious in France - with previous efforts in 1995 and 2010 unleashing mass protests and damaging strikes - and this latest effort could be the biggest test yet for President Francois Hollande.

The government stuck to his promise not to increase the current retirement age of 62 as many other countries have done following Brussels' recommendation.
The reform plan, which will be officially tabled September 18, avoids some of the more controversial proposals floated in recent weeks that included slapping a new tax on French retirees.

Instead, the government proposes that employees as well as businesses pay more every month to France's retirement system, a measure sure to raise eyebrows with the cost of the generous social net already one of the highest in the world.
French businesses had campaigned against a rise in taxes or contributions, fearing the impact they would have have on competitiveness. The French economy is grappling with record unemployment, a high cost of labour and a huge tax burden.

The plan also incrementally raises a French worker's contribution period from the current 41.5 years to 43 years by 2035. This effectively means that most people will have to work beyond 62 to qualify for a full pension.

The government said the measures would save the state's strained retirement system 7.3 billion euros ($9.6 billion) by 2020, with the books balanced by 2040.

Spain is pushing for state pension reforms that would link payments to life expectancy and to economic cycles, without raising the retirement age, employment minister Fatima Banez said.

The proposals, which the government presented to unions, would include de-linking pensions from inflation as of next year, tying them instead to a more complex formula that also takes into account the system's revenue.
Spain is under pressure from Brussels to shake up its pensions system by the end of 2013, to help it fix imbalances in its economy and as soaring unemployment puts an unprecedented strain on social security funds.
Despite recent changes restricting early retirement, an aging population and a low birth rate have also added to Spain's headaches and the ruling People's Party (PP) is now pushing for broader changes to make the pensions system more sustainable.
Banez told a news conference that the government was proposing the introduction of a minimal annual rise of 0.25 percent in pensions, so that they cannot nominally fall, as she defended changes likely to be unpopular with a key part of the electorate.

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