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"Sustainable social security is not only the government's responsibility but also a long-term strategy for businesses." – HRDept
The revised Social Insurance (SI) Law, effective July 1, 2025, introduces a significant change: reducing the minimum contribution period for pension eligibility from 20 years to 15 years. This is considered a major step forward, allowing employees easier access to retirement benefits. However, for businesses and HR departments, this change presents both opportunities and challenges. HRDept provides an in-depth analysis to help companies develop suitable strategies.
1. Opportunities: Attracting And Retaining Talent
The reduction in the required SI contribution period expands pension eligibility, creating a strong motivation for employees. This brings several advantages to businesses.
✔ Increased Employee Motivation: Older employees or those with interrupted careers will have a better chance of receiving pensions earlier, leading to higher commitment levels.
✔ Attracting Experienced Talent: Companies can now recruit skilled workers who previously lacked enough time to meet the 20-year SI requirement.
✔ Enhancing Corporate Social Responsibility (CSR): Implementing flexible welfare policies helps businesses build a positive employer brand.
HRDept emphasizes: "A well-structured HR policy not only retains talent but also fosters long-term trust."
2. Challenges: Rising Costs And Increased Turnover Risks
However, businesses also face significant challenges when implementing this new policy.
2.1. Financial Burden And Workforce Management
Reducing the SI contribution period to 15 years may lead to financial pressures as companies adjust their workforce plans and salary budgets.
| Factors | Before 2025 (20 Years) | After 2025 (15 Years) |
|---|---|---|
| Long-term SI Contribution Costs | Stable, minimal fluctuations | May increase as more employees exit the SI system earlier |
| Workforce Planning | More predictable, long-term employee retention | Requires adjustments, potential rise in early retirements |
| Employee Commitment | Employees stay longer to reach the 20-year milestone | Some may opt for early retirement instead of long-term employment |
Solution from HRDept: "Businesses should develop compensation packages that combine SI benefits with additional perks like health insurance and supplementary retirement funds to retain talent."
2.2. Risk Of Increased Employee Turnover
The shorter SI contribution period may lead some employees to withdraw from the system earlier, rather than staying long-term with their companies.
✔ Risk of Losing Experienced Employees: Those eligible for pensions may choose to retire early, causing a shortage of skilled workers.
✔ Impact on Succession Planning: Companies must revise workforce development strategies to maintain stability.
3. Strategies For Businesses To Maximize Opportunities And Mitigate Risks
To adapt to this change, businesses must implement flexible HR strategies. HRDept suggests the following solutions:
3.1. Restructuring HR Policies
✔ Developing Long-Term Career Roadmaps: Helping employees see the benefits of staying with the company.
✔ Enhancing Non-Monetary Benefits: Providing healthcare, training, and career growth opportunities to add long-term value.
3.2. Implementing Supplemental Retirement Programs
Many businesses have introduced supplementary retirement funds to attract and retain talent.
✔ Benefits For Employees: Increased post-retirement income, reducing reliance on government pensions.
✔ Benefits For Employers: Stronger employee loyalty and reduced turnover rates.
HRDept recommends: "Smart businesses don’t just comply with the law—they leverage it to build a sustainable workforce."
4. Conclusion: HR Must Be Proactive In Adapting
The reduction of the SI contribution period to 15 years presents both opportunities and challenges, requiring businesses and HR departments to adopt strategic and proactive approaches.
✔ Stay informed and ensure compliance with the new law.
✔ Design flexible compensation and benefits programs that combine SI with supplementary retirement plans.
✔ Foster employee engagement through non-monetary incentives and career development opportunities.
"A sustainable business is not just a workplace—it is a foundation for employees' future." – HRDept
Are you ready to adapt to the changes in the 2025 SI law? HRDept is here to support businesses in staying compliant and optimizing their HR strategies!