Increase retirement age,says Kerala panel

The expenditure committee of the Kerala Assembly has recommended that the government raise the retirement age of state government employees in two phases from 55 to 58 and then to 60 in order to minimise its pension liabilities. The committee,headed by Dr K K Subramaniam,also said the age limit to apply for government service should be reduced to 30 from 35. The report was submitted in the state assembly on Tuesday.

The committee noted that considering the high life expectancy in Kerala,it was not feasible to allow the workforce to retire at 55. It would be better,said the report,to increase retirement age to 58 and then to 60. The committee argued that if the retirement age remains 55,the state would have to spend 90 per cent of its salary bill towards pensions within the next five years. It added that the relatively young retirement age makes a government employee a pension drawer for more than two decades if the average life expectancy of 73.9 years is considered.

Recently,the Finance Commission had also advised the government to review the retirement age and introduce the contributory pension scheme. While the state government is yet to take a decision on increasing the retirement age,the budget for 2009-10 has proposed that employees who superannuate in the middle of a financial year can continue in service until the end of that fiscal. Incidentally,there are already provisions allowing teachers in the government and aided sectors to continue in service until the end of the academic year.

Though service organisations have been demanding an increase in retirement age,successive governments have avoided addressing the issue,perhaps fearing an outcry from youth organisations the state has around 40 lakh registered unemployed youth.

According to government sources,though a review of retirement age is under consideration,the suggestion to reduce the age limit for entering into government service is likely to be spiked.