“Financing Public Pensions in Times of Demographic Change: Increasing Retirement Age as Panacea?"

Event: Society and Politics

Chinese – European Conference jointly organized by Fudan University, the University of Münster, and the Friedrich-Ebert-Stiftung Shanghai.

On June 11th 2014, Fudan University, the University of Münster, and the Friedrich-Ebert-Stiftung Shanghai Office jointly organized a Chinese-European conference on the topic of increasing the retirement age to maintain retirement-income stability in a financially sustainable, social and fair way.

Photo from left to right: Prof. Peng Xizhe , Prof. Dr. Ding Chun, Dr. Tian Dewen

Demographic change is considered one of the most striking challenges for social insurance systems and subsequently for a stable social, political and economic environment. Many developed economies already expend a sizeable share of their GDP on publicly-funded pension and health care programmes. The rapid aging of societies is becoming a prevailing trend in post-industrialized countries as well as in a growing number of transitional countries. As a result public expenditure in health care and public pension is expected to rise as a share of national income. In addition, the provision of social security by the state is an important tool to maintain and improve social cohesion and build up a more equal society.

Looking at the complex field of public pension insurance, especially contributory systems like China and Germany face the challenge of a decreasing number of contributors paying for an increasing number of retirees. To sufficiently countervail the demographic trend, delayed retirements seem to be an efficient measure: longer working lives foster financial sustainability by both, reducing the period over which pensions are claimed and extending the time people spend as contributors. But how can governments implement policies in a fair and sustainable way for all generations? What unintended results are likely to arise?

Photo: Illustration of China’s demography

The conference formed a platform to answer these questions, evaluate the recent situations of pension system and discuss the possible reform of the retirement and pension system.

The event included discussions on demographic trends, public pensions, labor markets and longer working lives. Overall, the experts provided valuable policy recommendations on how to maintain sustainability and fairness.

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