Hundreds of millions of workers behind Asia’s economic miracle are heading into uncertain old age after governments failed to set aside enough funds for their pensions,said a book released today.
“Without far-reaching reforms,the financial burdens of these (Asian pension) schemes on future workers may become politically unacceptable,” said the book,edited by Asian Development Bank principal economist Park Donghyun.
The book,”Pension Systems in East and Southeast Asia: Promoting Fairness and Sustainability”,forecast current or looming problems both in rapidly greying East Asia as well as younger Southeast Asia.
“Just as Asia’s economic landscape was transformed… due to exceptionally rapid growth,its demographic landscape is transforming due to a change in population age structure that is unprecedented both in its scale and speed,” it said.
China will have 200 million people aged 60 or older by 2015,the year before its working-age population is forecast to begin to shrink,it said.
Its private-sector workers contribute a fifth of their incomes to pension pools,yet retired workers now get just USD 221 a month.
Its public sector workers meanwhile do not contribute at all,the study found.
In Indonesia,where workers retire at 55,the pension system covers only 14 per cent of private sector employees in Indonesia,according to the book.
It called for the system to be expanded more than eight-fold to cover informal sector workers.
It also described the South Korean pension system’s long-term financial state as “unstable”,said Malaysia’s was “inadequate and inequitable”,and noted a funding gap in the Philippines.
Singapore’s system is “inadequate”,while Thailand’s covers only 27 per cent of private formal sector workers,according to the book.
Vietnam’s system covers just 20 per cent of the labour force and will be in “large deficit” within 30 years,the book warned.
Fewer childbirths,longer lifespans and sluggish recovery by Western trading partners all point to an increasingly bleak picture for Asia’s greying army,it said.
The book also warned changing cultural mores meant elderly Asians could no longer depend on family-based old-age support mechanisms of adult children supporting their elderly parents.