In recent years, the topic of delayed retirement has become a focal point of discussion across various sectors. As societies evolve and demographics shift, the traditional concept of retirement is undergoing significant changes. The implementation of this policy will be closely related to individuals and enterprises.
On 13 September 2024, the 11th session of the Standing Committee of the 14th National People’s Congress officially approved a decision to implement a phased extension of the statutory retirement age (effective from1 January 2025)
The delayed retirement policy aims to gradually increase the retirement age for both men and women and pension contribution period. This move is essential to maintain a sustainable labor force and address the challenges posed by an aging population. The policy will be implemented in a phased manner, ensuring a smooth transition for workers and employers alike.
Key Points of the Policy:
Gradually raise the mandatory retirement age
| Original retirement age | New retirement age | Increase | Completion Cycle | |
| Male | 60 years old | 63 years old | 3 years | 15 Years |
| Female cadre | 55 years old | 58 years old | 3 years | |
| Female employee | 50 years old | 55 years old | 5 years |
- The statutory retirement age for male employees and female employees whose original statutory retirement age was 60 and 55 years old shall be increased by one month every four months to 63 and 58 years respectively.
- For female employees whose original statutory retirement age was 50 years old, the statutory retirement age shall be extended by one month every two months and gradually extended to 55 years old.
Gradually raise the minimum contribution period for basic pensions
| Year | Minimum payment period of the current year | Year | Minimum payment period of the current year |
| 2025 | 15 years | 2032 | 16 years + 6 months |
| 2026 | 15 years | 2033 | 17 years |
| 2027 | 15 years | 2034 | 17 years + 6 months |
| 2028 | 15 years | 2035 | 18 years |
| 2029 | 15 years | 2036 | 18 years + 6 months |
| 2030 | 15years + 6 months | 2037 | 19 years |
| 2031 | 16 years | 2038 | 19 years + 6 months |
| From 2039, the minimum contribution period will increase to 20 years | |||
Notes:
This gradual raise will start from 1 January, 2030.
For employees who reach the statutory retirement age but have not met the minimum contribution period, they may extend contributions or make a lump-sum payment to qualify for a monthly basic pension after retirement.
Flexible retirement system
Employees who have met the minimum contribution requirement may elect to retire on a flexible basis, with the option to retire up to three years earlier or later than the statutory retirement age, but early retirement cannot be earlier than the original retirement age.
Potential Impacts
- On the Labor Market: By extending the working years, the policy aims to mitigate the impact of an aging population on the labor market. This will help maintain productivity levels and support economic growth.
- On Pension Sustainability: By extending the working years, the policy aims to reduce the financial burden on the pension system. This is crucial for ensuring the long-term sustainability of pension benefits for future retirees.
- On Individuals: For some employees, the opportunity to work longer may provide financial security and a sense of purpose. However, it is also important to consider the potential impact on work-life balance and the need for adequate support systems for older workers.
Practical Recommendations
Update Employment Documents: Employment documents such as labor contracts and employee handbooks need to be updated to reflect the new statutory retirement age. For flexible retirement, prepare separate agreement or confirmation templates in advance for practical needs.
- Enhance HR Management Processes and Update Company Policies for Flexible Retirement:
- Collect additional information on employees’ birth dates and social security contribution periods to identify potential flexible retirement dates, confirm employees’ willingness, and plan the retirement process in advance.
- Update company policies to clearly define conditions for work handover procedures, advance notice requirements, and compensation for damages related to early or delayed retirement, providing guidance for employees.
The delayed retirement policy represents a significant shift in our approach to aging and work. It is a response to the evolving needs of our society and economy. We will continue to monitor its implementation and provide updates in the future.
How can we help you?
Rita Yu
Manager
