Urban workers can postpone receiving their pensions and continue working when they reach retirement age starting Oct 1, the local human resources bureau has said.

The move is intended to make full use of human resources and raise pensions with continuous input into employees' social security accounts while they are still working, the Shanghai municipal human resources and social security bureau said in a notice posted on its website.

The current legal retirement age in China is 60 for male workers and officials. It is 50 for female workers and 55 for female officials, according to a law passed in 1978.

Workers can receive a monthly pension from the government's social security fund after they retire, but they have to pay into their social security accounts for at least 15 years before they retire.

Shanghai's new policy does not seek to raise the legal retirement age, but it is the first time a Chinese city will delay the distribution of pensions for workers, as the government appears to be addressing a financial shortfall in its social security fund.

Shanghai has the largest share of the aged population among Chinese cities - about twice the national average. Senior residents now account for more than 20 percent of the city's population and there are more than 3 million registered residents older than 60, according to official figures.

In Shanghai, one retired worker is supported by 1.5 taxpayers, while the national average is 3.5 taxpayers for every retired person. The large number of retired people has created a yearly shortage of about 10 billion yuan ($1.49 billion) in the city's social security fund, according to Peng Xizhe, director of Fudan University's Institute of Population.

"It's an international trend to delay the distribution of pensions as workers become more educated and needed, and also to fill up the shortage of the social security fund," Peng said.

"But the government could also consider extending the urban social security net to migrant workers so as to have a greater variety of sources of funding to fill up its shortage," he said, adding that many countries are also delaying retirement age to fill up the need for more skilled workers.