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Last Updated : Jul 04, 2019 07:30 PM IST | Source: Moneycontrol.com

Economic Survey 2019 makes a strong case for a higher retirement age

Since an increase in the retirement age is perhaps inevitable, the Survey has recommended that the change should be signalled at least 10 years before the anticipated shift.

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Given that life expectancy for both males and females in India is likely to continue rising, the government should consider increasing the retirement age for both men and women, the Economic Survey said.

In India, the retirement age for government employees is 60 years.

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

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Since an increase in the retirement age is perhaps inevitable, the Survey has recommended that the change should be signalled at least 10 years before the anticipated shift.

This would help the workforce be prepared for the change, and would also help plan in advance for pensions and other retirement provisions.

The Survey has pointed to countries such as Germany, France and US increasing their retirement age. Some countries such as Australia and UK have changed their rule on earlier retirement for women, and made the retirement age the same for men and women.

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

In the UK, for example, the state pension age will increase for both men and women to 66 by October 2020. The UK government is planning further increases in the retirement age to 67 spanning the years 2026-28 and to 68 during 2044-46.

Japan is planning to increase the retirement age to 70, and China is considering a proposal to raise the retirement age for women by 1 year every three years and for men by 1 year every six years so that by 2045, the retirement age for both men and women would be 65.

In Germany, the retirement age will increase gradually to 66 by 2023 and to 67 by 2029. In the US, pension benefit age is set to rise gradually to 67 for those born in 1960 or later.

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First Published on Jul 4, 2019 01:21 pm
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