After maintaining a 58-year retirement age for three decades, the government has proposed reverting to the earlier retirement age of 60 years, citing increased life expectancy.

The change has been proposed in the Federal Civil Service Bill registered in Parliament on Monday.

The issue of raising the retirement age has surfaced repeatedly, whenever the government made amendments to the law. Now, the government has come up with a formal proposal to this effect in the bill. The Civil Service Act-1993 reduced the retirement age to 58 years from 60 years.

Experts on public administration point out it is already late to increase the retirement age, as life expectancy of Nepalis has grown substantially over the last 31 years, and the burden of pension for the retired civil servants has also been rising.

According to the World Bank, when the current civil service was introduced, the average life expectancy of Nepali people was 58 years and this had grown to 68 years by 2021.

“We had also recommended increasing the retirement age for civil servants,” said Lilamani Poudyal, former chief secretary,who had headed the High-Level Pay Commission formed in 2022. “It is one of the measures that we suggested to reduce the government’s unnecessary expenditure.”

According to the Pension Management Office, the pension liability increased from Rs37 billion in fiscal 2016-17 to around Rs75 billion in the fiscal year 2022-23.

“As much as Rs77 billion is expected to be spent for pensions in the current fiscal year,” said Bishnu Prasad Kharel, chief at the Pension Management Office.

There are nearly 300,000 pensioners who include retirees representing the civil service, security forces, teachers, intelligence services, and judiciary, among others, according to the office.

The Public Service Commission has also long been suggesting the government to increase the retirement age.

The Annual Report 2022-23 of the Public Service Commission states the retirement age should be maintained at 60 years, considering increased life expectancy and retirement age of other services from 60-65 years.

“For example, the retirement age is 60 years in health, education and university services,” said Poudyal. “People remain active at the age of 60 years. But retiring them earlier means the government has to bear the cost of both pensions and recruiting new staffers.”

The government’s liability on both salary and pension has been rising steadily over the years. For the current fiscal year, the government has allocated as much as an amount for salary and pension.

“It has already been too late to hike the retirement age,” said Umesh Mainali, former chairperson of the Public Service Commission. “When I was the chairperson of the Public Service Commission, we consistently advised the government to hike the retirement age in view of the growing burden of pension.”

The government has to increase the pension amount along with a hike in salary of the serving government staff. Pensioners are those who should be paid from the state coffers without being required to work.

Similarly, the government spent as much as Rs112 billion in the last fiscal year 2022-23 in distributing social security allowances, according to the Department of National ID and Civil Registration.

Elderly people, single women, children, disabled people among others are beneficiaries of social security allowances.

Last year, France faced stormy protests after the French government sought to raise the age limit for retirement. After the French government proposed to raise the retirement age from 62 to 64 and increase the number of years people must make contributions to receive a full state pension to 43 years from 42, it had invited massive protests there. The bill was later passed by the French parliament.

The French government was of the view that changes were essential to prevent the pensions system from falling into deficit and younger people carrying the burden. “Increasing the retirement age will help to minimise the pension burden,” said Mainali.