CHINA Trends and Developments Contributed by: Linda Liang, Ai Luo, Faluan Pan and Chutian Wang, King & Wood Mallesons
raised statutory retirement age of 61 years and four months in May 2031. Flexible retirement mechanism The Measures and the FRS Interim Measures have introduced a flexible retirement mechanism, allow - ing employees some flexibility regarding their retire - ment timing, either earlier (“Early Retirement”) or later (“Delayed Retirement”) than statutory retirement, pro - vided that certain requirements are met. • Early Retirement: (a) employees shall meet the minimum contribu - tion period for receiving pension benefits (see below); (b) employees may voluntarily opt for early retire - ment; (c) the period for Early Retirement shall not ex - ceed three years; (d) the actual retirement age should not be earlier than the original statutory retirement age (ie, 60 for male employees and 50/55 for female employees); and (e) employees shall give written notice (“Writ - ten Notice”) to their employers at least three months prior to the selected retirement date. • Delayed Retirement: (a) employees shall meet the minimum contribu - tion period for receiving pension benefits (see below); (b) employees shall consult with and reach an agreement with their employer on Delayed Retirement; (c) the period for Delayed Retirement shall not exceed three years; (d) a written agreement (“Written Agreement”) shall be executed by the employee and em - ployer at least one month prior to the employee reaching their raised statutory retirement age, confirming the delayed retirement date and relevant matters; and (e) once the postponed retirement period is con - firmed, it can no longer be extended further. For example, a male employee with the raised statu - tory retirement age of 62 can voluntarily choose to retire at a time between the ages of 60 and 62, or, after consultation and reaching agreement with his
employer, can choose to postpone his retirement to a time between the ages of 62 and 65. Some cities, such as Beijing and Guangzhou, have issued template documents for the Written Notice required for Early Retirement and the Written Agree - ment required for Delayed Retirement, providing guid - ance for employers and employees. Relevant formali - ties at local human resources departments have also been updated accordingly. The Measures and the FRS Interim Measures also set other stipulations related to flexible retirement. For example, both rules emphasise that during the implementation of flexible retirement, it is not allowed to illegally force employees to choose their retirement age directly or in a disguised form against their will. In addition, there are special rules for certain catego - ries of employees. Public servants, leaders and other management personnel of state-owned enterprises and public institutions shall promptly go through the retirement formalities upon reaching their new statu - tory retirement age. Other employees of state-owned enterprises and public institutions opting for flexible retirement shall obtain approval pursuant to relevant procedures. Minimum contribution period for receiving pension benefits The current minimum contribution period for employ - ees to receive pension benefits (“Minimum Contribu - tion Period”) is 15 years. According to the Measures, starting from 1 January 2030, the Minimum Contribu - tion Period will be increased by six months each year, until it reaches 20 years in 2039. Employees who have reached their statutory retire - ment age but have not met the Minimum Contribution Period can satisfy the requirement of the Minimum Contribution Period either by extending the contribu - tion period or by making a one-time contribution in accordance with the relevant laws and regulations. As the Minimum Contribution Period will be changing from 2030 to 2039, a question arises for employees opting for flexible retirement as to whether to use the actual retirement date selected or the date they reach
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