international employment law firm alliance L&E Global
China

China: National People’s Congress Standing Committee to Implement a Gradual Increase in the Statutory Retirement Age

Author: Carol Zhu and Lynsey Liu

On September 13, the Standing Committee of the National People’s Congress issued the Decision of the Standing Committee of the National People’s Congress on Implementing a Gradual Increase in the Statutory Retirement Age (“the Decision”) and announced the Measures of the State Council on Implementing a Gradual Increase in the Statutory Retirement Age (“the Measures”) at the same time, which will take effect on January 1, 2025.

The Measures points out that the reform of gradually delaying the statutory retirement age will be advanced in a steady and orderly manner, following the principles of voluntariness and flexibility. Effective 1 January 2025, the statutory retirement age for male employees originally scheduled to retire at the age of 60 and female employees originally scheduled to retire at the age of 55 will be postponed by one month for every four months, incrementally delaying to the ages of 63 and 58 respectively. For female employees whose original statutory retirement age was 50, the retirement age will be postponed by one month for every two months, gradually increasing to 55 years old.  Over a period of 15 years, the statutory retirement age for male employees will be gradually increased to 63 years old, and the statutory retirement age for female employees will be gradually increased to 55 years old and 58 years old, respectively.

Starting 1 January 2030, the minimum number of years of contribution for employees to receive basic pension on a monthly basis shall be gradually increased from 15 years to 20 years with an increase of six months each year. Employees who have reached the minimum contribution period may voluntarily opt for flexible early retirement, with the earliest retirement date not exceeding three years prior to the standard retirement age. However, the retirement age shall not be lower than the original statutory retirement ages of 50 years or 55 years for female employees and 60 years for male employees.

Key Action Points

Currently, the legal retirement age is set at the age of 60 for male employees, at the age of 50 for female employees (female employees in management and technical positions retire at the age of 55) in China.  When employees reach the legal retirement age, the employment contract should be terminated, and the employer should process the retirement procedure for them.

However, starting 1 January 2025, employment contracts terminated due to employees’ reaching statutory retirement age shall be based on the new statutory retirement age. It is suggested that the employer apply the new retirement ages for their employees as per the Measures, particularly for those who are less than five years away from the statutory retirement age.