EPFO calls for increasing retirement age to ease pressure on pension funds
By 2047, India is expected to become an ageing society as around 140 million people are estimated to be above the age of 60 years. This can put immense pressure on the pension funds in the nations. The Employees’ Provident Fund Organisation (EPFO), in its Vision 2047 document, has vouched for increasing the retirement age in the nation, and aligning it with life expectancy to ensure the viability of the pension system in India and provide adequate retirement benefits, reported The Economic Times on Monday.
The EPFO in its document said, “Increasing the retirement age, going forward, could be considered in line with the experience of other countries and will be key to the viability of pension systems.”
Explaining the suggestion by the EPFO, a senior government official told ET, “Raising the retirement age would mean deposit of higher quantum pensions for longer duration with EPFO and other pension funds in the country and will help offset inflation.”
The EPFO has almost 60 million subscribers and it has a cumulative pension and provident fund corpus of more than Rs 12 trillion. According to ET, the EPFO will include the Pension Fund Regulatory and Development Authority (PFRDA) in its plan. The PFRDA administers the National Pension Scheme of the central government.
According to the National Statistical Office (NSO)’s Elderly in India 2021 report, the nation’s elderly population of 60 and above is expected to touch 194 million in 2031 from 138 million in 2021, a 41 per cent increase, lifted by a higher population and rise in life expectancy for both males and females
“Consequently, the number of people requiring old age income and health security will go up exponentially,” the EPFO said.
While in India the retirement age varies from 58 years to 65, across the European Union, it is 65 years. Meanwhile, in Denmark, Italy, and Greece, the retirement age is 67 years and in the US, it is 66 years, as most of these nations have an ageing population.