Sunday, June 9, 2013

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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