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.
