Retirement Age may go up

Central govt employees’ retirement age to be extended by 2 years to 62 - Financial Express

The government is planning to extend the retirement age of all central government 

employees by two years — from the current 60 to 62 years. Sources said that an 

in-principle decision has been taken in this regard and the department of personnel 

and training (DoPT) has begun the work to implement the same. A formal announcement

 to this effect is expected this year itself.

The last time the government extended the retirement age of central government 

employees was in 1998. It was also a two-year extension from 58. This was 

preceded by the implementation of the 5th Pay Commission, which had put severe 

strain on government’s finances. Subsequently, all state governments followed the 

Centre’s policy by extending the retirement age by two years. Public sector undertakings

 followed suit too.

The decision to extend the retirement age is well-timed both politically and economically.

The UPA government reckons the move would be a masterstroke. At a time when it is 

buffeted by several corruption cases, it is felt that the extension of the retirement age

 will go down well with the middle classes. Economically also, the move makes sense 

because by deferring payment of lump sum retirement benefits for a large number 

of employees by two years, the government would be able to manage its finances better.

“An in-principle decision has been taken to increase the retirement age by two years 

within this year itself. This would reduce the burden on the fisc from one-time 

payment of retirement benefits for employees including defence and railways 

personnel,” an official involved in the discussion said. With the fiscal consolidation 

high on the government's agenda, this deferment would come handy.

There’s some flip side too if the retirement age is extended by two years. Those 

officials empanelled as secretaries and joint secretaries would have to wait longer to

 actually get the posts. And of course, there is the issue of average age profile of the 

civil servants being turning north.

It is also felt that any extension is not being fair with a bulk of people who still look for

 jobs in the government.

However, officials point out that at least it prevents an influential section of the 

bureaucracy to hanker for post-retirement jobs with the government like chairmanship 

of regulatory bodies or tribunals.

“As it is, a sizeable section of senior civil servants work for three to five years after 

the retirement in some capacity or the other in the government,” said a senior 

government official. The retirement age of college teachers and judges are also 

beyond 60.

As per a study, the future pension outgo for the existing Central and State 

government employees is estimated at a staggering Rs 1,735,527 crore or 55.88% 

of GDP at market prices of 2004-05.

SOURCE;FINANCIAL EXPRESS