If soaring living costs, low returns on savings investment and longer life spans are forcing more Westerners to work longer, why should many lowly paid Chinese wage earners facing the same problems prefer to retire early?

Amid the current heated debate on the government's intention to raise retirement age, officials have indicated that the average Chinese worker retires at about the age of 53, with great numbers of workers ready to take the plunge earlier rather than later. While the government rules on early retirement are strict, 55 for men and 45 for women engaged in dangerous or harmful lines of work, fraud is reportedly rampant as people who don't qualify find creative ways to beat the system.

You may blame it on a problematic pension policy that pits private workers who fork out for retirees in exchange for promises of pensions many years later, against government and public employees who don't need to pay a cent, but who will receive several times more in government payouts when they leave.

At the moment, a private employee contributes 8 percent of his or her wages while the employer provides 20 percent to their retirement account. But the accounts are "empty" because the savings, together with the employers' contributions, are used to pay those who have already retired, including those former government employees.

But, social injustice aside, isn't it true that the longer one works, the more benefits he will claim later?

Here is what new pensioners have found difficult to stomach: Despite their longer history of contributions, their payouts are less than those of their former colleagues who retired years ago. The reason is that China bent on improving social harmony has aggressively raised the pensions for non-government retirees in the past several years. In Beijing, the average pensioner who previously worked in a factory now earns 2,516 yuan ($395) a month, twice the amount in 2006. This compares with the average salary of a working Beijinger, which stands at 4,672 yuan, or slightly more than 2,000 yuan in pensions, with the prevailing official replacement rate of 45 percent.

The economic logic for early retirement is even more convincing for those skilled workers in their 40s or early 50s, who want to start a second career to supplement a modest pension.

The warnings of a possible future pension crunch as a result of a fast ageing population may also discourage people from putting their savings in a pension system that is as murky as it is unfair.

Zheng Bingwen, director of the Global Pension Fund Research Center of the Chinese Academy of Social Sciences, has described an individual's contributions like loaning cash to someone who promised to return in a year. He doesn't have to tell you how he'll spend the money, but you would start to worry if there are signs that your friend is transferring assets overseas, planning to "disappear" or having other credibility problems, he said in an interview with the Life Week newsmagazine.

Even if the money is still there, the real worth of the poorly managed pension funds could have been eroded by a combination of high inflation and low interest incomes, to the tune of 100 billion yuan a year, he said.

This will really make people sit up and think, if they have trusted the system with their retirement nest eggs.

The tendency for evasion may also spread to privileged groups. Some experts have already predicted an early retirement wave of government employees if they are put on the same retirement pension plan as people in the private sector.

The writer is editor-at-large of China Daily. E-mail: [email protected]