Retirement Reform in Progress: The Path to Implementing Gradual and Flexible Retirement

Introduction

On September 13, 2024, the Standing Committee of the National People's Congress passed the Decision on Implementing Gradual延迟法定退休年龄 (Delaying the Statutory Retirement Age), and approved the Measures of the State Council on Gradual延迟法定退休年龄 (hereinafter referred to as the "Measures"), which took effect on January 1, 2025. To implement the Decision of the Standing Committee of the National People's Congress on Implementing Gradual延迟法定退休年龄, the Ministry of Human Resources and Social Security, the Central Organization Department of the Communist Party of China, the Ministry of Finance and other three departments issued the Interim Measures for Implementing the Flexible Retirement System (hereinafter referred to as the "Interim Measures") on January 1, 2025, clarifying the procedures for flexible retirement and the contents of basic pension benefits.

The Measures adhere to the principles of "gradual adjustment, flexible implementation, classified advancement, and comprehensive consideration," adjusting the statutory retirement age in a gradual manner, involving specific rules for retirement age delays, adjustments to pension insurance contribution periods, flexible retirement, protection of rights and interests for over-age workers, extension of unemployment insurance benefit periods, and early retirement for special occupations. This issue will help everyone understand the relevant regulations on gradual延迟法定退休年龄, flexible early retirement, and flexible delayed retirement.

I. Policy Highlights: Gradual Adjustment, Flexible Options

(1) Gradual Delay of Statutory Retirement Age

The Measures stipulate the detailed rules for the gradual delay of the statutory retirement age. Starting from January 1, 2025, the retirement ages for various types of workers are adjusted as follows:

(2) Increase of the Minimum Payment Period for Pension Insurance

For employees retiring from 2025 to 2029, the minimum payment period for receiving basic pension remains 15 years. Starting from January 1, 2030, the minimum payment period for pension insurance will be gradually increased by six months each year, and within the next ten years, the minimum payment period will be gradually increased from the current fifteen years to twenty years. Starting from 2039, the minimum payment period for employees to receive basic pension will be confirmed as twenty years. After adjustment, it is as follows:

(3) Voluntary Flexible Retirement System

To further reflect the flexibility and humanization of the policy, the Measures introduces a flexible retirement system. Workers who have met the minimum contribution period for pension insurance may voluntarily choose to retire early on a flexible basis according to their own circumstances, with the maximum advance period not exceeding three years; however, the retirement age shall not be lower than the original statutory retirement age of 50 for female workers, 55 for female cadres, and 60 for male workers.

At the same time, for workers who have reached the statutory retirement age, if they reach consensus with the employer through consultation, they may also choose flexible delayed retirement, with the delay period not exceeding three years in total.

The flexible retirement system breaks the rigid restrictions of traditional retirement age, granting workers more space for independent decision-making, and makes the choice of retirement time more aligned with individual actual needs. Regarding the specific methods for voluntary flexible early retirement and delayed retirement, the "Interim Measures for Implementing the Flexible Retirement System" further specifies:

(1) Clarification of the application time limit for voluntary flexible early retirement:According to the "Interim Measures", if employees voluntarily choose flexible early retirement, they shall notify their employer in writing at least 3 months before their chosen retirement date.

(2) Determining the flexible delayed retirement time in written form:According to the "Interim Measures", when employees reach the statutory retirement age, if the employer and the employee reach consensus through consultation, they may implement flexible delayed retirement, with the delay period not exceeding 3 years from the statutory retirement age. The employer and the employee shall clarify the delayed retirement time and other related matters in writing 1 month in advance. Once the flexible delayed retirement time is determined, it shall not be extended further.

During the flexible delayed retirement period, if the employer and the employee reach consensus through consultation, they may terminate the flexible delayed retirement and go through retirement procedures as prescribed.

(4) Improving the pension insurance incentive mechanism

Article 4 of the "Measures" explicitly stipulates that pension calculation and disbursement shall implement an incentive mechanism where employees receive more for longer contributions, more for higher contributions, and more for later retirement. The calculation ratio of basic pension is linked to the employee's cumulative contribution years, the calculation base of basic pension is linked to the employee's actual contributions, and the personal account pension is determined based on factors such as the employee's retirement age and the balance in their personal account.

(5) Protection of Rights and Interests of Over-age Workers

Article 6, paragraph 1 of the "Measures" specifies the protection of rights and interests for workers who have exceeded the statutory retirement age. Employers who hire workers beyond the statutory retirement age shall ensure that such workers enjoy basic rights including remuneration for labor, rest and vacation, occupational safety and health, and work injury protection. This provision also strengthens the employer's mandatory work injury insurance protection responsibility for over-age workers.

(6) Protection for Near-retirement Unemployed Persons

Article 7 of the "Measures" addresses persons who are receiving unemployment insurance benefits and are within one year of reaching the statutory retirement age, extending their unemployment insurance benefit period until they reach the statutory retirement age. During the implementation of the gradual delay of the statutory retirement age, the unemployment insurance fund shall pay pension insurance premiums for them in accordance with regulations.

(7) Early Retirement Policy for Special Types of Work

Prior to the implementation of the "Measures," Article 1 of the "State Council's Measures Concerning the Retirement and Resignation of Workers" also explicitly stipulated provisions for early retirement due to special types of work. Persons engaged in underground work, high-altitude work, high-temperature work, other particularly heavy physical labor, or work harmful to health, who are males aged 55 or above and females aged 45 or above, with a continuous length of service of not less than ten years, shall retire.

Article 8 of the "Measures" further clarifies the state's standardized improvement of early retirement policies for special types of work. For workers engaged in special types of work as stipulated by the state, such as underground work, high-altitude work, high-temperature work, and other particularly heavy physical labor, as well as workers in high-altitude regions, those who meet the conditions may apply for early retirement. However, the specific regulations for improving early retirement policies for special types of work have not yet been issued. The specific retirement policies for special types of work shall be subject to the formally issued regulations.

II. Policy Interpretation: Further Explanation of the "Measures" with Examples

We use several specific scenarios to help you further understand the relevant provisions on gradual delay of mandatory retirement age, flexible early retirement, and flexible delayed retirement.

(1) Gradual Delay of Mandatory Retirement Age

According to the provisions of the Measures, the gradual adjustment of the mandatory retirement age is as follows:

(1) Male employees and female employees originally required to retire at 55 will follow a rhythm of 1 month delay for every 4 months, with male employees gradually delayed to 63 years old and female employees gradually delayed to 58 years old;

(2) Female employees originally required to retire at 50 will follow a rhythm of 1 month delay for every 2 months, gradually delayed to 55 years old.

Case 1: Li Shifu is a male employee born in May 1965. Under the original regulations, he should have retired at age 60 in May 2025. However, according to the gradual delay retirement provisions, Li Shifu needs to delay his retirement by 2 months, so his retirement date becomes July 2025. During these additional 2 months of work, Li Shifu's employer pays him wages according to the normal wage standard and continues to contribute to his social insurance such as pension insurance.

Case 2: Ms. Wang was born in March 1970, and she is an enterprise management employee at her workplace. Her original mandatory retirement age was 55. According to the gradual delay retirement provisions, she needs to delay her retirement by 1 month, with her retirement date postponed from March 2025 to April 2025. Similarly, the employer must also pay her normal wages and contribute to social insurance during the delayed retirement period.

(2) Flexible Early or Delayed Retirement

According to the provisions of the Measures, employees who have reached the minimum contribution period for pension insurance may voluntarily choose flexible early retirement or delayed retirement. In addition, the Interim Measures also provide clear guidance on the application and methods for choosing flexible early retirement or delayed retirement.

Specifically:

（1）Early retirement: The advance period shall not exceed 3 years, and the retirement age shall not be lower than the original statutory retirement age (original statutory retirement age: female workers at 50 or 55 years old, and male workers at 60 years old); If employees voluntarily choose flexible early retirement, they shall inform their employing unit in writing at least 3 months prior to their chosen retirement date.

（2）Delayed retirement: Flexible delayed retirement may be implemented upon mutual agreement between the employing unit and the employee, with the delay period not exceeding 3 years; The employing unit and the employee shall, 1 month in advance, clarify in writing the delayed retirement time and other matters. Once the flexible delayed retirement period is determined, it shall not be further extended.

However, during the flexible delayed retirement period, upon mutual agreement between the employing unit and the employee, the flexible delayed retirement may be terminated, and retirement procedures shall be processed in accordance with regulations.

What needs special attention is:

（1）Regardless of flexible early or delayed retirement, the minimum pension contribution period must be met. Employees who retire early shall meet the minimum contribution period corresponding to the year of their chosen retirement date; Employees who delay retirement shall meet the minimum contribution period corresponding to the year of their statutory retirement age. As mentioned above, starting from January 1, 2030, the minimum pension contribution period will be gradually increased by 6 months each year until the minimum contribution period is raised from the current 15 years to 20 years.

For example:

A male worker who reaches the post-reform statutory retirement age in 2031, the minimum contribution period for that year is 16 years.

LIf he chooses to take flexible early retirement in 2029, he only needs to meet the minimum contribution period of 15 years.

LIf this employee chooses flexible delayed retirement until 2034. When receiving the basic pension in 2034, they only need to meet the minimum contribution period of 16 years in the year 2031 when they reach the statutory retirement age.

(2) Not everyone can choose to delay retirement. For civil servants, leaders of state-owned enterprises and public institutions, and other management personnel, they should promptly go through retirement procedures when reaching the statutory retirement age.

Case 3: Master Zhang is a skilled worker born in July 1972. Under the progressive delayed retirement regulations, his statutory retirement date should be June 2034 (referencing the original statutory retirement age, delayed by 1 year and 11 months). However, due to health reasons, after meeting the minimum contribution period of 17 years, he chose flexible early retirement, retiring 1 year early in June 2033. Master Zhang submitted a written application for voluntary flexible early retirement to his employer in March 2033, and the employer fully respected his wishes and promptly processed his retirement application.

Case 4: Ms. Li was born in November 1984 and is an employee working in a production operation position at an enterprise. Under the progressive delayed retirement regulations, her statutory retirement age is 55 years, which means she will retire in November 2039, and correspondingly, her minimum pension contribution period is exactly 20 years.

Ms. Li works diligently and has accumulated rich practical production experience. With the implementation of the delayed retirement policy, Ms. Li, out of her love for her work, also wishes to continue working to increase her income and further improve her pension benefits; Ms. Li's employer, recognizing the importance of her experience to the production process, also strongly hopes that Ms. Li can continue working. Therefore, through consultation, both parties reached an agreement and signed a written delayed retirement agreement one month before Ms. Li's statutory retirement age. Ms. Li will flexibly delay her retirement by 3 years, retiring at age 58.

However, special attention should be paid to the fact that the choice of delayed or early retirement will also have a corresponding impact on the final pension amount received. Because pension calculations follow the principle of "more contributions yield more benefits, longer contributions yield more benefits," early retirement allows receiving the pension earlier, but due to the shorter contribution period and lower calculation base resulting from early retirement, the monthly amount received will also be lower compared to normal retirement; delayed retirement postpones the time of receiving the pension, but the monthly pension amount after retirement will be relatively higher compared to normal retirement.

It can thus be seen that the progressive delayed retirement reform is essentially committed to building a pension security system that not only upholds the principle of fairness but also takes into account the advantages of efficiency.

3. Progressive Delayed Retirement Policy Query Guide

The content of the Measures of the State Council on the Gradual Delay of the Statutory Retirement Age fully considers the changes in China's population structure and the needs of socio-economic development. It is also the first adjustment to the statutory retirement age since the founding of the People's Republic of China. The Measures grant workers more choices, allowing them to reasonably plan their careers and retirement lives according to their own circumstances, and the right to independently choose retirement plans suitable for their work and life, thereby meeting the diverse needs of workers in arranging their work and life. Workers, when choosing their retirement plans, should also strictly follow the procedures required by the Interim Measures for the Implementation of the Flexible Retirement System for application and processing.

If you still have questions about your retirement age, you can also query your corresponding statutory retirement age through the following online inquiry service channels:

（1）Ministry of Human Resources and Social Security website;

（2）National Social Insurance Public Service Platform;

（3）National Human Resources and Social Security Government Affairs Service Platform;

（4）Electronic Social Security Card;

（5）Mobile App 12333.

Access the "Statutory Retirement Age Calculator" mini-program through the above channels, input your information, and you can query your corresponding statutory retirement age and retirement year and month. Insured persons can also query their statutory retirement age through offline methods such as calling the 12333 consultation service hotline or going to the service window of social insurance handling institutions.