Global aging is a trend that is fundamental, irreversible and an established issue in the new millennium. Among the problems with population aging, the financing of public pensions is one of the difficulties to cope with. The paper identifies this problem from the demographic pressures on social security systems and the experiences of some countries with great population aging. In view of the complexity of the questions involved, and the diversity of problems and possible solutions around the world related to reformation of the pension system, the paper focusses on the discussion of deferring retirement age to solve the pressure of pension funds and explore the possibility of practicing it in China.
Societies all over the world are currently engaged in the process of preparing for the challenges of the coming years from population aging.
According to the recent statistics from the United Nations, the number of old population above 60 in the world is 629 million in 2002, which is 10% of the total number of the world's population. It is estimated that it will increase up to 1,964 million in 2050, which is 21% of the world's population. The statistics also report that the average life expectancy of the world was 44 years in 1950, has increased up to 66 years now, and will be 77 years in 2050. If the trends continue, a male aged 65 could expect to survive into his early 90s.
The two countries with the biggest aging problems are Japan and Italy (see table). According to figures produced by a Ministry of Japanese Health, Labor and Welfare research institute, the population in Japan, of people who are over 65 years, numbered 21 million as of October 1999. This elderly population will increase by more than 3 million every five years up to 2015. European statistics studies show that the `elderly dependence ratio' (the ratio of people over 64 years to working age population) will almost double from around 26.7% to 53.4% between 2000 and 2050. In Italy, where birth rates are the lowest, the dependency ratio is expected to reach the highest level of all the European countries-66.8% by 2050, more than twice the current level of 28.8%. Lamberto Dini, Foreign Minister and former Prime Minister of Italy, said that population aging will cause enormous strain on pubic finances, and OECD studies suggest that per capita living standards in the EU, the US and Japan may fall significantly over the next 50 years, as people reaching retirement age become net consumers rather than savers. This makes it essential that governments consolidate their budgets in order to shore up national savings rates. |
