Increase retirement age, suggests Economic Survey

The Economic Survey on Thursday suggested increasing the retirement age given the better life expectancy in the country and also to ease the pressure on pension funding.

“Given that life expectancy for both males and females in India is likely to continue rising, increasing the retirement age for both men and women going forward could be considered in line with the experience of other countries,” said the Economic Survey, which was presented to Parliament by Finance Minister Nirmala Sitharaman.

It said the increase in retirement age will be key to the viability of pension systems and would also help increase female labour force participation in the older age-groups.

Current retirement age for central government employees in 60 years.

The Survey said since an increase in the retirement age was perhaps inevitable, it may be worthwhile signalling this change well in advance – perhaps a decade before the anticipated shift – so that the workforce can be prepared for it.

“This will also help plan in advance for pensions and other retirement provisions,” it said.

The Survey noted that countries such as Germany, France and US have increased the retirement age.

Some countries such as Australia and the UK used to allow women to retire earlier than men
but have changed the rules to bring them at par.

Many countries such as Germany, the UK and the US have signalled that they will keep increasing the retirement age according to a pre-set timeline.

The Survey noted that in the U.K. the state pension age will increase for both men and women to 66 by October 2020. It added that the UK government was planning further increases in the retirement age to 67 spanning the years 2026-28 and to 68 during 2044-46.

Germany us planning the gradually increase the retirement age to 66 by 2023 and to 67 by 2029, the Survey noted.

In the US, pension benefit age is set to rise gradually to reach 67 for those born in 1960 or later.

In Australia, pensionable age was scheduled to increase gradually to 67 by 2023

China was considering to raise the retirement age for women by one year every three years and for men by one year every six years so that by 2045, the retirement age for both men and women would be 65.

Japan was considering to increase the retirement age to 70.