Central govt employees’ retirement age to be extended by 2 years to 62

The last time the government extended the retirement age of central government employees was in 1998. It was also a two-year extension from 58. This was preceded by the implementation of the 5th Pay Commission, which had put severe strain on government’s finances. Subsequently, all state governments followed the Centre’s policy by extending the retirement age by two years. Public sector undertakings followed suit too.

The decision to extend the retirement age is well-timed both politically and economically.

The UPA government reckons the move would be a masterstroke. At a time when it is buffeted by several corruption cases, it is felt that the extension of the retirement age will go down well with the middle classes. Economically also, the move makes sense because by deferring payment of lump sum retirement benefits for a large number of employees by two years, the government would be able to manage its finances better.

“An in-principle decision has been taken to increase the retirement age by two years within this year itself. This would reduce the burden on the fisc from one-time payment of retirement benefits for employees including defence and

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