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Thursday, December 22, 2011
OP-ED

Extension of retirement age: It was long overdue

Recently, the cabinet took the decision to extend the age of superannuation from 57 to 59 for the government employees. People seem to be curious to ascertain the implications of this decision from the financial, administrative and political perspectives. There is a general apprehension that this might result in deepening the problem of unemployment. An analysis of the background and the situational context may be useful to have a clear understanding of the matter.

To knowledgeable people the decision has not come all of a sudden. The issue has been deliberated at least for more than a decade by successive governments. Developments in the last few years have created a compelling situation in favour of this decision. In many countries, including India and Pakistan, the age of superannuation is around 60. General improvement of physical health helps maintain the productivity of the aged person beyond 60 or even 70 or 80. We have some ministers and public figures who are above 70 and still very active in their sphere of work. The superannuation age for the judges of the Supreme Court has been extended to 67, and that of the university teachers to 65. There was, therefore, no reason to keep the superannuation age fixed at 57 for civil servants and those in the lower judiciary, at least not on health or productivity grounds.

Actually, the age limit could not be extended because of informal resistance from the immediate junior officers, particularly from the additional secretary and joint secretary levels of the government. They strongly lobbied with the ministers and policy makers against extension of super annuity age. They contended that such extension could delay their being promoted to the post of secretary or additional secretary. They impressed upon policy makers that they were competent to discharge the responsibility of the secretary and any delay in their promotion would be detrimental to the country's interest. They also argued that extension of retirement age would imply enhancement of unemployment for the educated youth.

It was interesting to observe when these officers became secretaries and their retirement was approaching they turned volte-face and started arguing that the retirement age should be enhanced for the benefit of the country. It was clear that the argument for and against the extension of retirement age hinged on narrow cohort interest. It had very little significance for productivity or the welfare of common people.

The eligibility age all over the world, unfortunately, has not been determined through elaborate deliberations on the issue. Though age limit is the most important criterion to define childhood, there is no unequivocal limit of this variable. Similarly, we are still not aware of when eligibility for being a voter or MP or president of the country has been arrived at. One constitutional pronouncement follows another, that's all. There have not been many international conferences, seminars, erudite discussions to settle this issue in a scientific manner. We are following what our elders believed despite spectacular improvements in the field of cognitive development. It is strongly suggested that in all matters there should be discussion to arrive at a logical decision as to what the determinant variable would be.

Immediate financial benefit will follow the extension of age limit for superannuation. It will not be necessary to pay additional pension benefits. In future also, the incumbents will serve for additional two years before they become eligible for pension benefits. The main apprehension is about the unemployment of the young population. The author does not consider it as a big problem because government employment is only a slim swath of total employment.The number of migrant labour force every year is far too big compared to employment generation in the public sector. At any rate, thousands of posts in public service remain vacant. If serious attempts are made we would be able to fill up all the vacant posts in the next year. The apprehension of aggravated unemployment will be greatly mitigated.

On average, the country will benefit from the service of the experienced and productive employees at 57, who are no more considered as aged workers in the present day world. The decision to enhance the age limit for superannuation might have been deferred for another one or two years because of the resistance from those against it, but it could not be deferred indefinitely. The decision for extension had to be taken either now or within a couple of years. It was only a matter of time. Since the decision had to be taken, further delay would not bring any good.

The writer is a former Chairman, Public Service Commission.

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