Senior's Day sees pension shortfall debate

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Senior's Day sees pension shortfall debate

By Xinhua Writer Zhu Shaobin (Xinhua) 18:07, October 12, 2013

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China's timeless norm of respecting the elderly is being put to the test as the nation debates measures to handle pension payment pressure while celebrating Senior's Day, which falls on Sunday.

Senior's Day, or the Double-Ninth Festival, is marked on the ninth day of the ninth lunar month and has a history of nearly 2,000 years. It is an important occasion for the Chinese to show respect and gratitude to the elderly.

However, pension shortfalls amid an increasingly aging society have invoked concern about how to ensure China's aged group can enjoy their lives without worrying about their finances after retirement.

The population of Chinese above the age of 60 stood at 194 million by the end of 2012. The government expects that number to grow to 243 million by 2020.

There is no official report on the scale of the pension shortfall, but a report released last year by the Chinese Academy of Social Sciences (CASS) showed 14 provinces could not balance pension income and expenditures for urban retirees in 2011.

The report said they together faced a pension shortfall of 76.7 billion yuan (12.5 billion U.S. dollars), while estimates by some other financial organizations even far exceeded that amount nationwide.

In coping with the pressure, suggestions raised by experts include extending the retirement age and expanding the time span in which workers and employers pay for their pension insurance, which can delay the point at which retirees start receiving their pension.

However, Ding Yuanzhu, a researcher at the Chinese Academy of Governance, opposes such plans. "Approaches designed to delay pension payment may indirectly ease the pressure in the short term, but in the long term, it would not fundamentally solve the problem," Ding said.

He said it remains unclear how useful such approaches will be because many factors need to be considered and deliberated -- for example, regional differences and their impact on employment.

Cai Fang, a CASS researcher on demography and the labor economy, likewise said that delaying the retirement age might not be an ideal solution because of the effect that it would have on productivity.

Chinese elders are generally less educated than younger generations who enjoy much better access to education, the researcher explained, while the greater requirement for efficiency in employment today means elders will lag behind and reduce productivity if they were to work beyond the retirement age.

Ding pointed out that elder care is actually a global conundrum. In the United States, every 10 recipients of a pension require financial input from 28 workers while in China, that number is roughly 30.

He said that elder care is an issue that needs profound research, firstly on the population and also differences between occupations. Any scheme to ensure robust financing of elders' lives should come only after thorough and scientific research, more of which should be done.

According to Cai, proper care for the elderly is both an emotional and important notion in the Chinese dream of rejuvenation, and proper care means availability of comfortable rooms or nursing homes to live in and also easy access to medical treatment.

In an effort to explore elder care solutions, the State Council, China's Cabinet, has vowed to complete the building of a social care network for people over 60 by 2020.

Putting aside these weighty pension topics, ordinary Chinese will this weekend show a more personal touch as they are called upon to show respect for the elderly and spend time with their older loved ones.