Number of pensioners in the country
Here, as in most countries of the world, the issue of general aging of the population is becoming increasingly acute. How many pensioners are there currently in China? Statistics reveal about 226 million pensioners. However, not all of them receive decent content.
The number of senior citizens is projected to peak by 2050. It is planned that it will amount to 487 million people or 34.9% of the total number of citizens of the country. Therefore, various programs are being developed to improve the situation and rejuvenate the population.
Current pension programs in China
The main problem is that here the pension is not accrued to everyone who is entitled to it due to age. Because of this, there is a misconception that there are no pension accruals in the country. There are 2 pension programs in China:
- for the urban population;
- for rural residents.
Previously, payments in the country were intended only for employees of budgetary organizations and civil servants. Since 2014, city residents have been included in this category. The city pension in its mechanism resembles old-age payments in Russia. In terms of rubles, the average payment in cities reaches 24,600 rubles. In the village, the minimum pension is 1,260 rubles. Payments are not accrued to about 20% of current pensioners.
The exact level and specifics of payments are quite difficult to determine due to the specifics of the legislation. About 40% of citizens are rural residents. Urban workers who moved from the countryside are also considered as such. This creates additional difficulties with calculating actual payments.
Features of the Chinese pension system
At what age do people retire in China currently? Much depends on where you live and working conditions. The harmfulness of production and the position held are taken into account. It is interesting that a high position in a commercial structure is equivalent to working in the civil service.
Previously, pension insurance applied only to a narrow group of people. Before 1990, no more than 5.4% of Chinese could count on payments. As a rule, this concerned some employees of state enterprises. Until now, the main problem remains not only the payment of not all elderly Chinese, but also insufficient accruals in rural areas. This contributes to the outflow of the rural population to cities.
The retirement age in China for men is standard, regardless of industry. It is 60 years in all positions. In rural areas, provision begins at age 60 for both men and women. Payments here are much lower, since the costs are not as significant as in urban conditions.
The retirement age in China for women depends on working conditions. Certain standards are established:
- 55 years for women holding positions in public service;
- 50 years if work is carried out in hazardous industries and commercial companies.
There are no plans to raise the retirement age until at least 2024. The formation of pensions in cities is carried out on the basis of mutual contributions from both the employee and the employer, depending on the monthly salary. If employers contribute 20% monthly, employees are charged 8%. The employer contribution may vary by province.
In addition to the funded pension, city residents are provided with funds from the general fund. Funds from it are transferred based on the following data:
- work experience;
- life expectancy;
- average salary level in the province.
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Age debate
“China’s population is aging faster than pension funds are growing,” explains Alexey Maslov. — It is expected that in 2050 the army of unemployed citizens over 60 years of age will amount to almost 335 million people. Even earlier - by 2030 - the pension fund’s debt to them will reach several billion dollars, this is officially recognized.” So is it inevitable to raise the retirement age in China? The first discussions began about three years ago. There were rumors that the bar for all residents of the Middle Kingdom - both men and women - would be raised to 65 years. However, many experts believe that an increase will not happen. “China is terribly afraid of unemployment,” recalls RG’s interlocutor. - Now it is decreasing precisely due to the fact that people are retiring early. Officially, its level does not exceed 4 percent, but hidden unemployment is much higher. We must not forget that the PRC mainly continues to live due to the extensive development of its workforce. If in Germany there are 4-5 people per unit of robotics, then in China there are 10 thousand! But the situation is gradually changing, and with structural reforms, unemployment may rise. On the other hand, these same reforms in the economy will lead to an increase in money in the country’s pension fund and an increase in pensions.”
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Old age and stress on children
Until 2010, the growth of pension payments was quite slow. The number of people receiving pensions here did not exceed 20%. Often savings were spent for other purposes, even if deductions were made during working age.
The Chinese tend to save money for old age, since they do not have to rely on children. During 1970-2015, a demographic policy was pursued, according to which only one child should be born per family. This has affected the structure of society, where one child bears the burden of supporting elderly parents.
Now the working population cannot fully provide for pensioners. As retirement age approaches in China, many are looking to work longer. This allows you to maintain the same standard of living.
Rates vary significantly by province. Thus, in wealthy Guangdong, there are 9 workers per pensioner. And in the northeast of the country the proportion is 1:1.5. This is due to the slowing economy in these regions. For the fourth year now, the government has had to cover the gap in the Chinese pension fund.
Pension system crisis
This year, the Chinese pension system is stagnating. This is due to the disastrous consequences of the “one child per family” policy, which has been propagated by the authorities for a long time. Another reason is the significant increase in life expectancy of Chinese citizens.
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Today in China there are many people with disabilities and a small number of young people who make contributions to the Pension Fund. It is not possible to return to the traditional system of keeping old people young. According to some expert forecasts, already in 2050 there will be at least 2 citizens of working age per pensioner. As a result, the Chinese authorities are planning a pension reform - they want to increase the retirement age by 5 years.
A big problem for China is the prejudices of the local population. Citizens do not trust PF and tend to keep their savings at home or in a bank. Private enterprises and workers try to hide the real amount of earnings from the state, and this despite a strict system of penalties and constant monitoring. For this reason, the PF in China is missing billions of yuan every year.
There are also prerequisites for a crisis in the organizational structures that are responsible for the full operation of the pension system. The social security and labor bureaus were not initially designed for such a huge number of pensioners and cannot cope with the significant workload. The structure needs modernization and new personnel.
Determining the size of a pension in China
Who is paid a pension in China and how much in 2021? Monthly payments provided for old age can differ tens of times. It is difficult to directly compare pensions in Russia and China, since quite large payments are provided for urban residents, while in villages the payments are very small. In the latter case, pensioners are forced to rely on the help of their children, which is not always possible.
You can determine what the average pension in China is in 2021. For urban residents it is fixed at 2.5 thousand yuan (24.6 thousand rubles), and for rural residents - 127 yuan (1.26 thousand rubles).
Pensions are indexed every year depending on the growth of average wages in the province. When there was active economic growth, payments were increased by 9-10%. Today the indexation level is within 5-7%.
Increase in pension payments
The future pension is made up of monthly contributions. From the beginning of 2018, the State Council decided to increase the basic level of pensions for employees of government agencies and enterprises.
If we calculate the general data for all provinces, the pension in China in rubles for the country is 5,500 rubles. At the same time, Shanghai and Beijing pensioners receive 3,500 yuan, which is 31 thousand rubles. But it is important to take into account the high price level. As a result, payments can be slightly more than the cost of living.
Features of life of Chinese pensioners
Many people are interested in how retirees live in China. Here, much is determined by the place of residence and the capabilities of the province. Rural pensions do not even cover basic needs by the standards of Chinese villages. At the same time, the city pension provides a comfortable standard of living.
It is difficult to compare payments with our country. On the one hand, urban Chinese residents earn much more on average. But at the same time, we do not have such low pensions as in Chinese villages. Thus, Russian pensioners receive an average of 14,000 rubles. At the same time, the cost of living in China and Russia is comparable.
The insurance certificate is similar to the Russian SNILS. It also has an individual number. The document can be not only in paper, but also in electronic format.
For urban residents, the average payment is 20% of the average salary in the province or region. The rural population cannot count on an accrual of more than 10%. This is because villagers are not required to pay dues. Because of this, they do not have the labor part of their pension payments.
Good payments can be received by persons who live in an economically developed region and have a working experience of at least 15 years.
Who can receive pension payments
Employees who have reached a specified age and have the required length of service retire:
- civil servants, employees of municipal institutions - at least 10 years;
- other segments of the population –— 15.
During working life, contributions to the pension fund were required. Failure to comply with these conditions means non-receipt of assistance from the state.
The amount of payments differs in different places of residence and is:
- 20% of the minimum salary received in a particular city;
- 10% in the village.
How do you receive a pension in China?
The Ministry of Human Resources and Social Security of the People's Republic of China is responsible for the functioning of pension programs here. To process payments, two documents are submitted - a passport and an insurance certificate. Interestingly, China has not used paper passports for a long time. A card is provided with a special electronic chip on which basic data is stored.
After reviewing the application, determining the length of service and place of work, pension payments are calculated. From this moment on, accruals are assigned. In most provinces, the amount accumulated by the employer and employee is divided into 120 months. This rule was introduced when the average period of life after retirement was 10 years. Currently, the average life expectancy is 76 years, but this system continues to be used.
How are pensions calculated in the Middle Kingdom?
From an employee’s salary in China, contributions to the Pension Fund are 11%. Of this, 7% is paid by the employer himself, and 4% by the future pensioner. Many private enterprises accumulate funds themselves and pay the employee after retirement.
The Bureau of Social Security and Labor has the right to independently dispose of accumulated funds. For example, money is invested in securities or business, which helps increase the pension budget.
A number of citizens believe that working pensioners already live well and do not need a pension...
Pensioners in China and other cities receive pension payments equal to 20% of the average monthly salary in the region of residence. However, each region has its own system of bonuses and additional payments, which allows pensioners to receive a quite decent pension.
The pension of former agricultural workers is about 10% of the average monthly salary in the province. This circumstance is based on the fact that village residents do not pay contributions from their income and, accordingly, do not have the right to claim the labor part of the pension.
Retirement age is decreasing
Today, the country has a classic retirement system for socialist countries. But the government has announced a reduction in the retirement age in China since 2014, which should be gradual.
According to scientists, a long period of work after 55 years for men and 50 years for women leads to various diseases. Among the most common causes are clinical depression and fatigue. The government intends to reduce the retirement age by 5 years.
At the same time, the authorities assure that this event will not have a negative impact on the economy. In the age of widespread technology development, large amounts of hard human labor are not required. The state strives to take care of its citizens, gradually improving working conditions and quality of life.
It is also planned to encourage those who plan to continue working after retirement. By 2025, a complete analogue of the North Korean system is planned, where every working pensioner receives a significant increase depending on age.
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Retirement age in China
The legislation of the PRC establishes the retirement age at which people can receive pension payments:
- males over 60 years of age;
- females over 50-55 (previous place of work is taken into account).
This resolution was adopted back in 1997 and is still in effect today. Accruals are not made to all persons who have reached the above age. People who previously held positions in government agencies, as well as workers in the industrial segment, can receive a pension in China.
Attention! The above retirement age rule does not apply in all parts of the country. Many regions have their own age limits.
What are the prospects for China's pension system?
Since 1997, payments have been consistently increasing in the country. The main goal is to fully provide pension benefits to existing pensioners by 2021.
Despite the existing difficulties, the authorities are trying to solve the following problems in the next few years:
Eliminate hukou. This is a system in which the size of the pension depends on the place of residence. This will remove the imbalance and outflow to large cities with high economic indicators.- Equalize and reduce the difference between regional pension budgets.
- Connect village and city funds. This should promote equal social protection.
- Make more transfers to employees’ personal accounts.
- Improve working conditions so that employees have an increased incentive to continue working long-term.
Due to the fact that the monthly pension in China is steadily increasing, domestic consumption is increasing. It provides more than half of the country's economic growth. As a result, increasing the well-being of pensioners is becoming one of the government’s priorities.
Thus, China has a rather complex pension system and there are currently unresolved problems. But gradually the situation is improving, and pension provision is increasing.
