Consider raising the retirement age: Economic study
NEW DELHI: Citing an improvement in life expectancy, the Economic Study has defended the increase in Retirement age, raising expectations among government employees and the private sector.
“Given that life expectancy for both males & females in India is likely to continue rising, increasing the Retirement age for both men & women going forward could be considered in line with the experience of other countries,” the document said.
In 2016, healthy life expectancy at the age of 60 in India (the number of years a 60 year old person is expected to live in good health) was estimated at 12.9 years, 12.5 for men and 13.3 for women, compared to 20 years or more in Singapore, Japan, France, Canada & Australia .
Hiking Retirement age may make job creation tougher
Currently, the Retirement age for most government employees is 60 years & most private companies have aligned their age of superannuation to the Centre & state governments. Teachers, doctors & high court & Supreme Court judges are exceptions as they get to work longer. Even private bank CEOs can stay in office till the age of 70 as do a few corporate sector bosses.
For a vast majority, however, working life ends between 58 & 60 years, although a large section of the urban population lives well past 80.
The Economic Survey has suggested that a higher Retirement age would be crucial for the viability of the pension system, which was in a nascent stage, apart from increasing female labour force participation in older age groups.
It went on to suggest that this was “perhaps inevitable” and, therefore, recommended that it would be useful to signal the change a decade before the anticipated shift to help people in their pensions & Retirement planning.
In fact, as long as the Center constitutes a Payment commission , there is heightened anticipation that the Retirement age will be reviewed, especially because the Retirement age for government employees was last revised over two decades ago. With the next pay revision due in 2026, the signalling may have to begin now.
But with the survey itself pointing to the need to create 55-60 lakh jobs annually over the next two decades, an increase in Retirement age may make the government’s task of employment generation tougher. So, like several of the suggestions made in the survey, the proposal to raise the Retirement age may remain only on paper, at least for the time being.