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
COURTESY-NFPE,Ottapalam
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