State retirement ages worldwide look set to increase, spurred on by the twin pressures of increasing social security costs and lower mortality rates.

Ah, the fountain of youth.  We live in a world obsessed with staying younger and living longer.  Look through any newspaper or magazine or flip through the television channels and you will be sure to find something that relates to the topic of increasing ones longevity.  But while we are busy romanticising the ideal of a longer life, have we stopped to consider any of the potential drawbacks?  

One drawback may be “an increase in state retirement ages,” says Giles Archibald, Mercer’s global head of international retirement services.  Archibald suggests, “The twin pressures of increasing social security costs and lower mortality rates are driving changes in retirement provisions.”  

At present Norway and the US (for those born after 1960 in U.S.) already have a retirement age over 65, while some countries still have a national retirement age (NRA) under the age of 60, such as, China, Russia, Vietnam and Venezuela just to name a few.

Drawbacks of a later NRA

What are some of the further potential drawbacks of a later NRA, beside the obvious point of having to work further into our lives?  According to Yvonne Sonsino, head of Mercer’s international retirement business in the UK, “Western Europe is in a particularly difficult position with an aging workforce and a history of generous social security provision.”  She explains that passing legislation on these issues will be an enormous challenge for politicians who will risk losing the support of their voters.  She goes on to cite the recent strikes and disturbances in France as an example of the potential problems ahead.

Silver lining

So, is there a silver lining anywhere on this seemingly grey cloud?  Well, according to Archibald the governments are, “increasingly looking to the private sector to supplement social security, placing more pressure on employers resources...as social security is eroded, innovative company sponsored retirement plans are becoming more attractive tools for companies to recruit talent and remain competitive.”

With employers having to step up their retirement packages, perhaps those extra couple of years added to our work life will be worth the money.  

List of proposed national retirement age (NRA) increases

Europe and the Middle East

• Austria – Increase for women from 60 to 65 between 2024 and 2033
• Belgium – Increase for women from 64 to 65 by 2009
• Czech Republic – There has been a general increase (for both men and women) of two months and four months respectively every year since 1996, with a plan to make the NRA 63 for males and 59-63 for females by 2013, depending on the number of children raised.
• Denmark – Increase for both males and females from 65 to 67 between 2024 and 2027
• Germany – Increase for both males and females from 65 to 67 between 2012 and 2029
• Hungary – Increase for males from 62 to 65 and for males and from 61/62 to 64 for females by 2020, with a further increase to 69 for males and 68 for females by 2050
• Italy  - Proposing an increase for from 57-58 by 2008 with a further increase to 61 by 2013
• United Kingdom – A common State Pension Age of 65 will be fully implemented before 2020.  This will gradually increase to 68 between 2024 and 2046.
• Turkey – For persons insured from September 1999 the social security retirement age is 60 for males and 58 for females, while a person insured before September 1999 the retirement age is ranges from 41-56 years old.
•  Israel - Since 2004 the NRA has been gradually raised (according to date of birth) from 65 to 67 for males and 60 to 64 for females.  

• Australia – Increase for females from 60 to 65 (according to date of birth) to a standard 65 by 2014, making the age the same for both men and women
•  India – The normal retirement age is between 58 and 60, but the trend seems to be leaning towards the later age of 60.
• Japan – Under the Employees’ Pension Insurance there will be a gradual increase from 60 to 65 and for company sponsored retirement plans also from 60 to 65 between 2006 and 2013.
• Singapore – The long-term objective of the Singaporean government is to increase the retirement age from 62 to 67 for both males and females but the legislation has yet to be implemented.
• South Korea – Increase from 60 to 61 in 2013, with an increase of one year every five years until the NRA has reached a stand 65 years of age.

• Columbia – Increase from 60 to 62 for males and 55 to 60 for females in 2014.
• Canada – In Canada there is a move for the majority of the provinces to eliminate mandatory retirement ages altogether.
• Brazil and The U.S. – There have been no recent changes implemented in either of these countries.

4 March 2008

[Copyright Expatica 2008]