Employees Provident Fund Organization (EPFO) has reportedly proposed to increase the retirement age of private and public employees. The organization says that the retirement age should be increased with the view of life expectancy. It has argued that the pension system should be more strong if the retirement age of the employees increases.
As per the Employees Provident Funds Act 1952, the average life expectancy of Indians were close to 40 years. With the span of time, it is 70 years now with increased access to better living conditions and healthcare facilities, due to which the average Indian is likely to hit 80 years in the next few years.
In India, the retirement age of an employee is between 58 to 65 years, while the age is 58 years for private sector employees and 65 years for the public sector employees. The average age of retirement in the European Union is 65 years and in Denmark, Italy and Greece of Europe is 67 years. Although in America it is fixed at 66 years.
According to media reports, the EPFO will ensure that the employees will get enough retirement benefits. If the retirement age is increased then the members will be able to save more and will also be able to get more pensions. The pension is greater by 4 percent, at 59 years. If an employee opts at 60 years then he will be entitled to 8 per cent higher pension.
“If the retirement age increases, then more money will also be deposited on behalf of the employees in the pension fund and the employees will get the more benefits,” said KK Jalan, the central EPFO Commissioner adding that if the size of the pension fund increases then it could be used to contribute in the economy.
Even after retirement, members can contribute towards the EPFO till the age of 65, but there will be no benefits on contributions after the retirement.
According to reports, by the year 2047, India will have more than 140 million retired people, whose age is now 60 years, due to which the pressure on the pension fund will also increase significantly.