Rapidly greying Shanghai is allowing people to delay their retirement by up to five years as it tries to plug the widening hole in its pension pool.
From this month, in a mainland first, the mandatory retirement ages for clerical and professional employees - 60 for males and 55 for females - will no longer apply if the workers are healthy and want to carry on in their positions.
They will continue to contribute 8 per cent of their salaries to Shanghai's pension pool - to which employers contribute 20 per cent of their salaries - but will be exempted from paying medical insurance.
When they do retire - no later than 65 for males and 60 for females - they will receive bigger pensions.
An official from the municipal human resources and social security bureau told Xinhua the policy could motivate highly educated professionals to work longer and contribute more to the society.
Demographers say postponing the retirement age is a must for Shanghai, which has a rapidly ageing population and a pension pool with rapidly rising debts. The current mandatory retirement age was introduced in the 1950s and reconfirmed in the 1970s. But when the People's Republic was founded in 1949, average life expectancy was less than 50 years. In Shanghai nowadays, women are expected to live an average of 85 and men 79, according to Dr Peng Xizhe, director of the school of social development and public policy at Fudan University.
Peng says 4.6 million people in the city contribute to the pension pool every year and there are 3.1 million people drawing from it. 'It means every 1.5 workers support one elderly person. It's hard to maintain this situation.'
