The Impact of the Raising of China’s Statutory Retirement Age on Foreign-invested Enterprises

Summary


●       The effect of the raising of China’s statutory retirement age will be far-reaching for employers
●       Employers can take a number of steps to avoid disputes in relation to retirement age
●       Precautions should be taken to avoid possible age discrimination claims
●       There will also be an impact on the management of foreign employees

On September 13, 2024, the Decision on the Implementation of Progressive Deferment of the Statutory Retirement Age (全国人民代表大会常务委员会关于实施渐进式延迟法定退休年龄的决定) ( the "Decision") was adopted by China’s top legislature, marking the implementation of the long-discussed "delayed retirement" policy. The Decision stipulates that within 15 years, the statutory retirement age for male employees will be gradually raised from 60 to 63 years old, while female employees’ statutory retirement ages will rise from 50 and 55 years old to 55 and 58 years old, respectively. The Measures for the Progressive Deferment of the Statutory Retirement Age (关于渐进式延迟法定退休年龄的办法) (the "Measures"), which were approved at the same time, stipulates that starting from January 1, 2030, the minimum contribution period required for employees to enjoy monthly basic pensions will be gradually raised from 15 to 20 years.