In a big change affecting millions of workers who will retire sooner or later, the government is pondering whether to extend the fixed retirement age by 5 years-from 60 to 65. If the reform is implemented in 2025, the affected employees will have more opportunities for longer employment as central or state government employees, or in selected sectors in the public and private domains.
What’s Changing?
As things stand currently, for most categories of Central Government employees, the retirement age is fixed at 60 years except in some cases in technical or academic fields. The conceived plan is to extend that by raising the retirement age to 65 years hence there shall be an active service period for an additional 5 years. This act is being considered mainly due to:
- Increased life expectancy
- Better health in older employees
- Need to retain highly experienced professionals
Who Will Benefit?
The change would affect well over 1 crore employees throughout the country, especially those in:
- Central and state government service
- Public sector undertakings (PSUs)
- Education and health
- Semi-governmental institutions
In some private sector industries, depending on demand and various technical considerations, the retirement age in government sector establishments may also be revised as a consequence of this.
Economic And Social Impact
There are several benefits of changing the retirement age:
- It reduces the pension burden on the government
- It keeps older working professionals active for more years
- It increases income and savings of individuals
- It delays the recipients’ need for full retirement support or social welfare dependency.
Apart from that, some say that this may restrict employment opportunities for the younger generations, particularly in competitive areas in the public sector.
What Employees Need To Do
On the other hand, while things are still being deliberated upon, those at the threshold of retiring in 2025 are advised to keep abreast of developments through official channels, such as the DoPT or respective HR department. In effect, any changes could apply to pension calculations, service benefits, and promotion timelines.
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