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72% worry about post-retirement expenses

03-13 17:23 China Daily
China's pension fund will come under tremendous pressure to break even in coming years and as such, the government needs to gradually raise the official retirement age to salvage the finances, a top official said on Tuesday.

Nearly 72 percent admit that they worry about life post-retirement, China Youth Daily reported Thursday.

According to an online survey conducted by ePanel Inc, a market research and consulting organization, out of 2,200 respondents only 18.2 percent did not express worry about post-retirement life.

The rest 10 percent said it was difficult to comment on the issue.

The retirement pension is so little that I will not be able to afford the daily expenses, said one of the respondents Zhuang Liping, a 38-year-old who works in a pharmaceutical manufacturing company.

Apart from contributing to the pension fund, 69 percent save money and 36.4 percent have bought commercial insurances to prepare for life after retirement.

The total pension fund income of employees nationwide was 2.33 trillion yuan ($372 billion) and the expenses were 1.98 trillion yuan in 2014, said Yin Weimin, minister of the Ministry of Human Resources and Social Security, at a press conference on Tuesday.

Related: China to raise retirement age as pressure on pension fund rises

China's pension fund will come under tremendous pressure to break even in coming years and as such, the government needs to gradually raise the official retirement age to salvage the finances, a top official said on Tuesday.

Yin Weimin, minister of human resources and social security, said the government will gradually raise the official retirement age, which is as low as 50 for some female workers, but stressed that any policy changes will be phased in over five years.

He did not say when retirement ages will be raised.

Analysts have long warned about China's state pension crisis and the severe funding shortage, with some estimating that the cash shortfall could rise to as high as nearly $11 trillion in the next 20 years.

Yin said the finances were not as dire for the moment, but warned about challenges ahead.

"The pension fund faces tremendous pressure in terms of breaking even in future," he told reporters at a news briefing on the sidelines of the annual meeting of China's parliament.

The fund's income stood at 2.3 trillion yuan ($367.3 billion) in 2014, exceeding its expenditure of 2 trillion yuan for the year, he said.

But in coming years, the proportion of Chinese over the age of 60 will rise to 39 percent of the population, from 15 percent now, Yin said.

That would depress the dependency ratio - the ratio of the number of people younger than 15 or older than 64 to the working age population - to 1.3 from the current 3.04, he said.

As China's economy slows to an expected 25-year low of around 7 percent this year, Yin cautioned that the country's labor market will also face greater pressure.

Employment fell more year-on-year in January and February compared with the same two-month period a year earlier, he said, but added that he was confident China can still create more than 10 million jobs this year.

Chinese leaders have repeatedly said they will tolerate slower economic growth as part of the reform process so long as employment levels remain healthy.

Some officials have said the Chinese labour market held up last year despite the economic slowdown due to a fast-growing services sector, and brisk job creation in new emerging industries such as the e-commerce sector.

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