In some contexts, the retirement age is the age at which a person is expected or required to cease work. It is usually the age at which such a person may be entitled to receive superannuation or other government benefits, like a state pension.
History and establishment
The first recorded use of a state pension was established in the Roman Empire in 13 BC by Emperor Augustus Caesar for military veterans who had served for at least 16 years in a legion and four years in the reserves. This was later increased to 20 years in a legion and five years in the reserves.[1] In the United States, states historically lack a retirement age even though labor force participation rates began to fall dramatically after the age of 60.[2]
The first retirement age was set in Germany by Otto Von Bismarck in 1881, originally at 70, before being reduced to 65 in 1916.[3] Following this, more countries began to adopt an official retirement age, such as Britain with the passage of the Old Age Pensions Act 1908, which set the initial retirement age at 70 before it being reduced to 65 for men and 60 for women with the passage of the National Insurance Act 1946.
The United States adopted an initial retirement age of 65, under the bill of the Social Security Act of 1935. By the mid-20th century, almost all countries had adopted a retirement age.
Political considerations
In the present day, policymakers usually consider the demography, fiscal cost of aging, health, life expectancy, nature of the profession, supply of labor force, etc. while taking the retirement age into account.[4] The increase in life expectancy is used in some jurisdictions as an argument to increase the age of retirement in the 21st century.[5][6]
Many of the countries listed in the table below are in the process of reforming retirement ages. See the notes in the table for details. The ages shown are effective as of the year given in the table. The future trend in some countries is that the retirement age will increase gradually. Where available, explanations are given in the section on notes.
Therefore, one's year of birth determines their age of retirement. In the United States, while a person born before 1937 can retire at the age of 66, those born after 1960 must be 67.[7]
In the United Kingdom the standard is currently 66, but will rise to 68 in 2027[8]
Many countries in Europe follow the same criteria, with one's age of retirement determined by their birth year, for example in Romania, women born in January 1955 had their retirement age in January 2015 set at age 60. Those born in January 1958 could retire in January 2019 at age 61. Those born in January 1961 can retire in January 2023 at age 62. Those born in January 1967 can retire in January 2030 at age 63.[9]
The legal retirement age (the age at which one can retire, regardless of career length) in Belgium is 65 in 2019. in 2025 it will be 66 and in 2030 it will be 67, both for women and men.
Early retirement is possible from 60 onwards with a career of at least 44 years, from 61 onwards with at least 43 years, or from 63 onwards with a career of at least 42 years. Some exceptions exist, mainly in the required number of years.
A career year is considered if it contains at least 104 days (in full time equivalent).
Certain individuals, such as rural workers, teachers and police officers, have a lower minimum age.
Brazil also requires workers to have contributed to social security for a minimum amount of time before they become eligible to claim benefits. To start receiving partial benefits, all private-sector workers are required have contributed for at least 20 years (for men) or 15 years (for women). Public-sector workers are required to have contributed for at least 25 years. To receive full benefits all workers must have contributed for at least 40 years (for men) or 35 years (for women).
The legal retirement age at which one (men or women) can retire is 60 with at least 20 years of coverage and at least 180 months of contributions, including 60 months in the last 10 years. Employment must cease.
Early retirement age is 50 with at least 20 years of coverage and at least 180 months of contributions, including 60 months in the last 10 years. The pension is payable abroad only under reciprocal agreement.
By law there is no mandatory retirement (an employer cannot force an employee to retire). The standard age to begin receiving a CPP retirement pension is when one attains age 65 (the month following the 65th birthday). However, one may receive a reduced CPP retirement pension as early as the month following the 60th birthday. Alternatively, one may receive an increased pension after reaching age 65. Canada also has a pension supplement with different rules called Old Age Security (OAS).
In the Czech Republic, in the year 2015, men had the retirement age of 62 years 10 months and women had it between 58 and 62, depending on number of children.[33][34] In Czech Republic, the retirement age is in the process of being increased, and therefore depends on year of birth (for individuals born after 1977 it may exceed even 67, e.g. a person born in year 1995 must be at least 70 years old.[35]) For women the retirement age depends on the number of raised children as well.[34] For people born in 1975, the retirement age will be the same (66y8m) regardless of sex and number of children raised; and this age will reach 67 for people born in 1977.[34]
In Denmark, the retirement age will be increased gradually to reach 67 years by 2022. From 2030 onwards, it will be increased a maximum of one year every five years depending on increases in average lifespan.[36][37][13]
In Germany the retirement age is to be increased gradually and reach 67 years by 2029. For a long time the most common mandatory retirement age was 65, although in East Germany it was 60.
Retirement age 65. Early retirement possible between the ages of 60 and 64. Some disciplined services staff of the government have lower retirement age.[39]
In the public sector, the retirement age is 60, 62 in Indian Railways, 62 for the chiefs of army/navy/air force staff (or 3 years of service whichever is earlier), 62 for high court judges, 65 for the chief of defence staff (or 3 years of service whichever is earlier), and 65 for supreme Court judges.[44] while in the private sector it depends on the individual company and the maximum being 65.
In Indonesia, provisions relating to pensions are regulated in Government Regulation Number 45 of 2015 Article 15 concerning the Implementation of the Pension Guarantee Program, in PP 45/2015 the following matters are regulated:
For the first time the Retirement Age is set at 56 (fifty six years). Starting January 1, 2019, the retirement age as referred to in paragraph (1) will be 57 (fifty seven) years. The Retirement Age as referred to in paragraph (2) is further increased by 1 (one) year for every subsequent 3 (three) years until it reaches the Retirement Age of 65 (sixty five) years. By referring to the regulation, the retirement age limit in Indonesia is 58 years in 2022 and will reach the maximum retirement age limit, which is 65 years in 2043.
Must have paid contributions for at least 20 years (At 67 years and 3 months). Those who have paid contributions for at least 41 years can retire at 62. Those who have paid contributions for at least 41 years and 10 months (women) or 42 years and 10 months (men) can retire regardless of age.
In Malaysia, The Congress of Unions of Employees in the Public and Civil Services (Cuepacs) wants the government to consider extending the retirement age for civil servants from 60 to 62,[56] but the government has no immediate plan to extend it as the current retirement age is deemed as sufficient.[57]
Although official retirement age is 68, AOW (Algemene Ouderdomswet, meaning General Old Age Law) state pension will be received starting at the age of 66. AOW eligibility is tied to life expectancy and will gradually increase to 67 in 2021.
The general retirement age is currently set to age 67 however, given sufficient pension contributions it is possible to retire as early as at age 62. The longer an individual postpones withdrawing a pension, the greater the government pension provision becomes.
The retirement age for an employee depends on the employment contract. Upon retirement, the retired employee should be given his/her benefits according to the agreement or contract between the employer and the employee. However, if there is no existing retirement plan or agreement for the employee, he/she may retire at the age of 60, given that he/she has served the employer for 5 years, and shall be given a retirement pay of at least half a month's salary for every year of service (6 months of work given is considered as 1 whole year for the retirement pay).
From 2019 the retirement age for men (women) would gradually increase from 60 (55) to 65 (60) years by 2028; first it was intended to hike the age for women to 63 but later the plan was softened.
Both men and women can retire when they reach their respective retirement age and have at least 15 years of insurance coverage. Or, have 45 years of insurance coverage regardless of age. The retirement age for women is increased by 2 months every year and it will be the same as for men, 65 in 2032.
In Singapore, the Retirement Age Act (RAA) has been replaced by the Retirement and Re-employment Act (RRA) in 2012. Under the RRA, the statutory minimum retirement age is still 62, but employers are now required to offer re-employment to eligible employees who turn 62, up to the age of 65. The bill will gradually increase the retirement and re-employment ages for Singapore employees to 65 and 70 years old, respectively. By 2030, the retirement age will have been increased to 65 and the re-employment age will have been raised to 70, in a step-by-step approach.
In Slovakia the retirement age for women depends on the number of children.[77] The retirement age will be equalized for men and women at 62 in 2017. The retirement age as of October 2022 is 63 years with the conditions. [13]
Employers with more than 300 employees are required to extend the retiring age to 60. From 1 January 2017, it will be mandatory for all employers nationwide.[78]
Retirement age was gradually increased since the 1970s, from 44 for men and 38 for women.[82] Originally, there was no exact retirement age. Current ages will increase to 65 for both genders by 2048. Additionally, various minimum days of service is required, which is currently 7000 days. It will become 7200 days (20 years) by 2048. One is subject to the laws on the day he/she started working.
In the United Arab Emirates the mandatory retirement age was raised from 60 to 65 in 2010, enabling the UAE to retain its needed expat skilled work force longer for key construction projects.[85]
The Social Security Administration, is the Government agency responsible for social services in the United States. Pension age in the United States is determined on one's birth year, the earliest a person can retire is 62, but benefits may be a 30% reduction, as the full benefit amount (100%) is for retirees is 67, however if a prospective retiree delays taking out Government benefits until 70, the full pension amount is again increased (125%). [87]
The retirement age will gradually increase to 62 for males by 2028 and 60 for females by 2035. In 2021, the retirement age is 60.25 (age 60 and 3 months) for males and 50.33 (age 50 and 4 months) for women, the age will be increased by 3 months each year following for males and 4 months for women.
The average of statutory retirement age in the 34 countries of the Organisation for Economic Co-operation and Development (OECD) in 2014 was males 65 years and females 63.5 years, but the tendency all over the world is to increase the retirement age.[90] This is also reflected by the findings that just over half the Asian investors surveyed region-wide said they agreed with raising the retirement age, with a quarter disagreeing and the remainder undecided.[91]
Reform
Reforms tend to be phased in slowly when the retirement age (or pension age) is increased with grandfathering, ensuring a gradual change. In contrast, when the age of retirement is decreased, changes are often brought about rapidly.[92]
One of such examples of grandfathering is the transitional pension rules, which were applied for staff aged 54 years or older, and to some extent, for all staff in place, when in 2014, the retirement age of European civil servants was increased to 66 years of age.[93]
Men retire either later than women or at the same time. This is being addressed in some countries, where the retirement ages are being equalized.
Retirement is the withdrawal from one's position or occupation or from one's active working life. A person may also semi-retire by reducing work hours or workload.
The demographics of Thailand paint a statistical portrait of the national population. Demography includes such measures as population density and distribution, ethnicity, educational levels, public health metrics, fertility, economic status, religious affiliation, and other characteristics of the populace.
A pension is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be:
A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides retirement income.
The Canada Pension Plan is a contributory, earnings-related social insurance program. It forms one of the two major components of Canada's public retirement income system, the other component being Old Age Security (OAS). Other parts of Canada's retirement system are private pensions, either employer-sponsored or from tax-deferred individual savings. As of June 30, 2022, the CPP Investment Board manages over C$523 billion in investment assets for the Canada Pension Plan on behalf of 21 million Canadians. CPPIB is one of the world's biggest pension funds.
The Department for Work and Pensions (DWP) is a ministerial department of the Government of the United Kingdom. It is responsible for welfare, pensions and child maintenance policy. As the UK's biggest public service department it administers the State Pension and a range of working age, disability and ill health benefits to around 20 million claimants and customers. It is the second largest governmental department in terms of employees, and the largest in terms of expenditure (£187bn).
Mandatory retirement also known as forced retirement, enforced retirement or compulsory retirement, is the set age at which people who hold certain jobs or offices are required by industry custom or by law to leave their employment, or retire.
The Central Provident Fund Board (CPFB), commonly known as the CPF Board or simply the Central Provident Fund (CPF), is a compulsory comprehensive savings and pension plan for working Singaporeans and permanent residents primarily to fund their retirement, healthcare, education and housing needs in Singapore.
The State Pension is an existing welfare benefit that forms part of the United Kingdom Government's pension arrangements. Benefits vary depending on the age of the individual and their contribution record. Currently anyone can make a claim, provided they have a minimum number of qualifying years of contributions.
The pensions crisis or pensions timebomb is the predicted difficulty in paying for corporate or government employment retirement pensions in various countries, due to a difference between pension obligations and the resources set aside to fund them. The basic difficulty of the pension problem is that institutions must be sustained over far longer than the political planning horizon. Shifting demographics are causing a lower ratio of workers per retiree; contributing factors include retirees living longer, and lower birth rates. An international comparison of pension institution by countries is important to solve the pension crisis problem. There is significant debate regarding the magnitude and importance of the problem, as well as the solutions. One aspect and challenge of the "Pension timebomb" is that several countries' governments have a constitutional obligation to provide public services to its citizens, but the funding of these programs, such as healthcare are at a lack of funding, especially after the 2008 recession and the strain caused on the dependency ratio by an ageing population and a shrinking workforce, which increases costs of elderly care.
The ageing of Europe, also known as the greying of Europe, is a demographic phenomenon in Europe characterised by a decrease in fertility, a decrease in mortality rate, and a higher life expectancy among European populations. Low birth rates and higher life expectancy contribute to the transformation of Europe's population pyramid shape. The most significant change is the transition towards a much older population structure, resulting in a decrease in the proportion of the working age while the number of the retired population increases. The total number of the older population is projected to increase greatly within the coming decades, with rising proportions of the post-war baby-boom generations reaching retirement. This will cause a high burden on the working age population as they provide for the increasing number of the older population.
Japan has the highest proportion of elderly citizens of any country in the world. 2014 estimates showed that about 38% of the Japanese population was above the age of 60, and 25.9% was above the age of 65, a figure that increased to 29.1% by 2022. By 2050, an estimated one-third of the population in Japan is expected to be 65 and older.
Pensions in Spain consist of a mandatory state pension scheme, and voluntary company and individual pension provision.
A new measure of expected human capital calculated for 195 countries from 1990 to 2016 and defined for each birth cohort as the expected years lived from age 20 to 64 years and adjusted for educational attainment, learning or education quality, and functional health status was published by The Lancet in September 2018. Latvia had the twenty-first highest level of expected human capital with 23 health, education, and learning-adjusted expected years lived between age 20 and 64 years.
The Pension Fund of the Russian Federation (PFR) is the principal national pension fund in Russia. It is the largest organization of Russia to provide socially important public services to Russian citizens. Founded December 22, 1990 decision of the Supreme Soviet of the RSFSR No. 442-1 "On the organization of the Pension Fund of the Russian Federation". The fund has branches across all Federal Subjects of Russia. The labor collective FIU - is more than 133 thousand social workers.
Luxembourg has an extensive welfare system. It comprises a social security, health, and pension funds. The labour market is highly regulated, and Luxembourg is a corporatist welfare state. Enrollment is mandatory in one of the welfare schemes for any employed person. Luxembourg's social security system is the Centre Commun de la Securite Sociale (CCSS). Both employees and employers make contributions to the fund at a rate of 25% of total salary, which cannot eclipse more than five times the minimum wage. Social spending accounts for 21.8% of GDP.
South Korea's pension scheme was introduced relatively recently, compared to other democratic nations. Half of the country's population aged 65 and over lives in relative poverty, or nearly four times the 13% average for member countries of the Organisation for Economic Co-operation and Development (OECD). This makes old age poverty an urgent social problem. Public social spending by general government is half the OECD average, and is the lowest as a percentage of GDP among OECD member countries.
Public pensions in Greece are designed to provide incomes to Greek pensioners upon reaching retirement. For decades pensions in Greece were known to be among the most generous in the European Union, allowing many pensioners to retire earlier than pensioners in other European countries. This placed a heavy burden on Greece's public finances which made the Greek state increasingly vulnerable to external economic shocks, culminating in a recession due to the 2008 financial crisis and subsequent European debt crisis. This series of crises has forced the Greek government to implement economic reforms aimed at restructuring the pension system and eliminating inefficiencies within it. Measures in the Greek austerity packages imposed upon Greek citizens by the European Central Bank have achieved some success at reforming the pension system despite having stark ramifications for standards of living in Greece, which have seen a sharp decline since the beginning of the crisis.
The gender pension gap is the percentage difference in pension income between women and men. It is often calculated as the difference between the average man's pension and the average woman's pension, expressed as a percentage of the man's. The gap averages 26% across OECD countries.
South Korea introduced its Basic Old-Age Pension in 2008 as part of its pension system. According to the Ministry of Health, Welfare and Family Affairs, the Basic Old-Age Pension is "designed to enhance welfare of the elderly by providing a monthly pension payment to the elderly in need." The pension was intended to benefit workers contributing to the National Pension Scheme.
1 2 3 4 5 6 7 8 9 10 11 2009 Ageing Report: Economic and budgetary projections for the EU-27 Member States (2008–2060). Joint Report prepared by the European Commission (DG ECFIN) and the Economic Policy Committee (AWG), "Archived copy"(PDF). Archived(PDF) from the original on 20 October 2011. Retrieved 4 December 2011.{{cite web}}: CS1 maint: archived copy as title (link), p. 78.
↑ Abdul Ghafour, P.K. (6 May 2014). "62 to be the age of retirement". Arab News. Jeddah: Saudi Research & Publishing Company. Archived from the original on 19 January 2015. Retrieved 10 March 2015.
↑ Ministry of Manpower (25 February 2015). "Retirement and Re-employment Act". Singapore: Government of Singapore. Archived from the original on 15 March 2015. Retrieved 10 March 2015.
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