EPFO supports increasing retirement age

5 Sep 2022 , 07:33 AM

The Employees’ Provident Fund Organization (EPFO) believes there is a strong argument for significantly raising the retirement age in India and bringing it into line with life expectancy in order to guarantee the sustainability of the nation’s pension system and offer sufficient retirement benefits.

With 140 million people expected to be above the age of 60 by 2047, India is expected to become an aging society. The nation’s pension funds are anticipated to be under tremendous strain as a result of this.

According to EPFO’s Vision 2047 document, raising the retirement age in the future “may be considered in line with the experience of other nations and will be crucial to the survival of pension systems.”

The states have received the vision document, and negotiations with other stakeholders, including employers and employees, will shortly begin.

With close to 60 million subscribers, EPFO is the custodian of a cumulative pension and provident fund corpus worth over Rs12 lakh crore. The EPFO is likely to include the Pension Fund Regulatory and Development Authority, which oversees the government’s National Pension Scheme, in this all-encompassing scheme.

According to the Old in India 2021 Report from the National Statistical Office (NSO), India’s elderly population (defined as those aged 60 and over) is expected to reach 194 million in 2031 from 138 million in 2021, a 41% growth over a decade.

In India, depending on whether it is a public sector firm or a corporate entity, the retirement age ranges from 58 to 65 years old. The retirement age is 66 in the US, 67 in Denmark, Italy, and Greece, and 65 across the European Union. The population of the majority of them is aging.

In the 2012 edition of its “Pension Outlook,” the Organization for Economic Cooperation and Development stated that governments will need to gradually raise the retirement age to account for rising life expectancy in order to ensure that their respective national pension systems are both affordable and sufficient.

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