Work till you dropIncreasing retirement age is a question that calls for proper deliberation
The Ministry of Law and Justice and the Ministry of Finance have a conflicting opinion regarding the retirement age for civil servants. While the Law Ministry is of the view that the pension age should be maintained at the current age, 58 years, the Finance Ministry wants to increase it to 60 years.
The Finance Ministry says since the government has to balance pensions and already stretched public finances, to help shore up the sustainability of the social security programs, the age should be increased to 60.
The ministry has also argued that the retirement age across all civil services should be the same and that since the average life expectancy has also increased to 71 years, it is only apt that the retirement age is increased.
Data from the Pension Management Office shows that the pension bill has swelled to more than Rs 26 billion annually—money it has to provide to nearly 2,50,000 retired civil servants every year. Given the demand for a hefty rise in salaries and the subsequent increase, under the garb of increasing allowance, in every budget, the bill is only expected to rise further. Quite naturally then, the need to control this expense cannot be overstated, especially at a time when the government is struggling to bridge its growing budget deficit.
What’s more, the current retirement age limit of 58 was set in 1992 when life expectancy was 51 years. Today’s 60-year-olds are fit and healthy, and have much to contribute to the economy. More often than not, they also have a depth of institutional memory incomparable to other workers. As such, the Finance Ministry’s rationale provides good reasons to consider increasing the retirement age for civil servants.
On the flipside, some would argue that the higher the retirement age, the fewer jobs there would be for the young people. Therefore, whether or not the retirement age should be increased is a question that calls for proper deliberation. Since an increase in the retirement age concerns the interests of everyone in society, the government should encourage a thorough public discussion on the issue, especially between employees and employers, before reaching a decision.