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: www.financialexpress.com
