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City urges putting off retirement to save on pensions

THE city will urge local companies to ask their staff to retire later due to pressure on the retirement pension. The amount of retired people in the city was causing problems that were getting increasingly serious every year, officials said yesterday.

The population above the age of 60 registered in Shanghai reached more than 3 million by the end of last year - 21.6 percent of the total population of the city, up 4.8 percent since the end of 2007, said the Shanghai Research Center on Aging.

The center said for several years the city has had to make up for a pension shortfall by using government money, but it was hard to calculate how large the shortfall was.

However, companies usually prefer to retire their employees and then re-recruit them, rather than keeping them on longer.

This is because a retired employee will receive a state pension every month, and so their former business can justify re-hiring them for a smaller salary.

Most of the employees who get the chance to be recruited again after retirement are senior engineers, senior technicians, senior managers and college professors.


At present, no government measures have been taken to encourage companies to adopt the suggestion.

"This year many new graduates are finding it hard to land a job because of the global economic recession," said Xu Qihua, director of the center. "People may object if the government requires companies to prolong existing employees' working period."

At present, the retirement age for men is 60 and for women it's between 50 and 55, depending on their job.

Professor Peng Xizhe, dean of the School of Social Development and Public Policy at Fudan University, however, said prolonging the working period for certain posts will not exert much influence on the employment of the new graduates.

"After all, new graduates will not occupy those senior posts," he said. "Anyway, if the retired staff are recruited again after they retire, there will be still no vacant posts."

Peng reckoned that when the employment condition changes for the better the government will promote the policy to relieve pressure on the pension system.


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