According to social insurance experts, the retirement age should be increased at a gradual level until it reaches 65; the changes should occur over the next one or two decades and they should include all workers.
Current Retirement Situation In China
At the moment, the official age for retirement used in China is 53, with a life expectancy that reaches 75. This automatically posses a great amount of pressure on the current social security funding matters. The lack of proper sustainability comes to emphasize the need for a clever reform plan in this department. An official reform plan has been presented to the Ministry of Human Resources and Social Security that is currently handling the pensions, and the involvement of the World Bank or the Labor Organization are expected to provide more useful proposals for the already existing retirement reform plan.
Provided there will be no future changes in the current program, the financial deficit of the country will start to become visible in the year 2030, accounting for 90 percent of the GDP of the country by the year 2050. These figures have been provided as a result of the analysis completed by the Chinese Academy of Social Sciences. The propositions of the World Bank refer to the necessity to gradually increase the age of retirement over the next ten or twenty years. This action will contribute to the relief of a third of the social security fund deficit. There is speculation in the Chinese media concerning the beneficiaries of the reform – whether they will be blue-collar workers or civil servants. The idea of targeting an initial group has been rejected by the vice minister of HR and social security, and demands have been made so that the retirement reform takes place at a national level, without targeting any specific groups of workers.
Viable Alternatives To The Retirement Reform Plan
There are specialists who oppose the retirement reform plan, taking into consideration the fact that the majority of Chinese citizens reject the idea of the changes occurring, according to specialized online polls. Reducing current pensions or boost the value of contributions could also work as alternatives to the reform. Also, certain system than ca cleverly review and manipulate the levels of the pensions on a regular basis so that they reflect the economic growth or the income changes in the country are more than welcomed. Inflation also needs to be taken into account when recalculating the new levels of the pensions. Such a system will enable the growing of the pensions by ten percent, but concerns do exist about the affordability degree of such measurements on behalf of local governments. The new pension levels need to match the inflation. The reality of the HR market in China also has to be pondered upon.
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