TOP REASONS WHY THE RETIREMENT AGE BE LOWERED FROM 60 TO 56

They say time, money and energy cannot be enjoyed by an individual at the same time.
A young person can have both energy and time but not money. A young adult can have
both energy and money but not time. An elderly person can have both time and money
but not energy.

     With the passage of House Bill Number 5509 on its third and final reading in the
House Representatives, the lowering of the Optional Retirement Age from 60 to 56 of
government workers is timely especially for teachers. Here are the top reasons why this
bill should approve by the House of Senate as well.

1. Teachers’ effectiveness. Teacher effectiveness is dependent on various factors.

Their attitude, skills, and knowledge greatly affect the performance of teachers in
implementing the target goals of the K to 12 Curriculum. A teacher (as well other
professions) must be a believer that learning should not stop after from
graduation from Baccalaureate degree in education. There are instances when a
teacher who has reached his or her twilight years often say when given a task,
“Ihatag na lang na sa mga bataon kay manug retire naman ako. Iban naman ang
maubra.” (“Give the task to the younger teachers. I am nearing my retirement
age. Others should be given that responsibility.”) One of these factors that might
have prompted those whose age are in retirement age is that their skills and
knowledge might no longer be up-to-date or they are already lacking the skills
required by the present curriculum.

     One of the skills being honed by the K to 12 curriculum is to produce technologically

literate learners. A teacher near his or her retirement age might not be skilled in the
digital aspects. Thus, difficult for an old dog to learn new tricks. It is possible that
despite the requirements needed by teachers in this digital era, teachers no longer have
the drive to learn new skills.

2. Teacher’s enjoyment. Teachers belong to the most challenged professions of all

times. They no longer are constrained as implementers of the Curriculum, they
have to implement programs of DepEd in addition to their basic task of teaching.
 They serve their clienteles and often go beyond their official times without
compensation. Thus, they need to enjoy while have the energy.

3. Teachers’ monetary benefits. Despite of the DepEd having the chunk of the
budget, it is true that it is not enough to finance all the needs of the school. With
needs required by the school, teacher often have to dig into their pocket to
sustain the needs of the classroom as well as the needs of the learners. With the
early retirement, teachers can use their money solely for their personal needs
instead of using these to subsidize the needs of the classroom.

     Teaching is a great and noble profession that is done out of pure service and not
merely monetary rewards. With these points, it is a pressing issue that the retirement
age be lowered from 60-56. With their early retirement, teacher can still have time,
money, and energy.

Mixed signals on retirement

Determining the official retirement age for government workers should be seen more as
a pension issue rather than a labor supply issue. In a country where national and local
governments are among the biggest employers, and where a young population provides
an abundant supply of workers, legislators should tread carefully in deciding on how
best to adjust retirement policies for the bureaucracy.

To date, I am getting mixed signals from the House and the Senate, and I am uncertain
whether decisions are being made on the basis of quality and irrefutable empirical data
and metrics, or more on the basis of political interests. After all, in about eight months
we are holding the May 2022 elections, and many of our lawmakers are seeking
reelection.

At present, the optional retirement age for government workers is 60, and the
compulsory retirement age is 65. Under consideration now are bills proposing to lower
the optional retirement age of government employees to 56; and, for public school
teachers to 55. However, there are also a pending bill raising the retirement age,
particularly for the military and the police, which is 56. The Senate proposal is to raise
the retirement age of officers to 60 and the Chief of Staff to 65. But the retirement age
of enlisted personnel will remain at 56.

We have no set optional or mandatory retirement ages for presidents, vice-presidents,

senators, congressmen, and Cabinet members, or appointed heads of agencies. But in
the judiciary, the mandatory retirement age for judges is 70. Incidentally, at the US
Supreme Court, and all other US federal courts, there is no mandatory retirement age
for judges. However, of those who decide to retire voluntarily, available online data
indicate an average age of 78.

Perhaps legislators should strive for consistency, and that retirement ages should not
be a matter simply of age but physical and mental and intellectual ability. But more
than this, there should be a major consideration of fiscal implications, particularly the
ability of pensions systems and future generations to shoulder the cost of benefits of
retirees. Moreover, why allow military officers to stay on longer than enlisted
personnel? For all members of uniformed services, shouldn’t retirement age be the
same?

Mandatory and optional retirement ages will ultimately depend on the type and volume
of work required from an individual. In this line, recent studies and research should be
reviewed to help set a baseline as well as a standard that can be applied to different
types of government work. Benchmarking will help in this regard. The starting point
perhaps should be the present standard of 60 for optional and 65 for mandatory, for all
government workers. Nothing lower.

For the Philippine military and police services, the mandatory retirement age is
currently 56, or 35 years of service. A Senate bill proposes to jack this up to 60, but for
officers only, and to 65 for the Chief of Staff. I don’t see any compelling reason for this
difference. In the US, the Army has raised the retirement age for active personnel to 62
from 55, and the age limit for enlistment to 39 from 34. Why not apply the 60-65
metric to all uniformed personnel as well?

I believe the state-run Government Service Insurance System (GSIS) should be heard
on this issue. Personally, I see no reason to lower either the optional and mandatory
retirement ages from the present 60/65. If at all, it should be raised instead or lowered.
Provided, however, that after the age of 55, annual assessments are made whether one
continues to retain the physical, mental, and intellectual capabilities deemed needed to
do the job.

As the GSIS itself said in an explanatory note on its website, “any change in the
[retirement] benefit package has a corresponding fund liability that would be hard to
sustain, given the present poor investment environment and successive increments in
government employees’ monthly salary.” Lowering the retirement age shortens the
contribution period of GSIS members. The GSIS will also pay pensions much earlier
than originally planned.

“GSIS is gravely concerned that the untimely receipt of benefit resulting from early
retirement will continuously shorten the actuarial life. To address this, it may resort to
two options — increase the contribution of those who are still in service or reduce
benefits of the present and next generation of pensioners,” it said.

“The actuarial life of SIF [Social Insurance Fund] is 26 years. This means that it will last
until 2045 from 2019. Based on GSIS’s studies, if any of the bills [to lower retirement
age] would be implemented, the actuarial life will drop from four to 14 years. Thus,
instead of until 2045, the fund life would will be 2041 only, or much worse, until 2031,”
it added.

On whether the GSIS can still pay pensions of retirees if the retirement age is lowered,
the pension system replied, “We are unsure of the future. GSIS might be too
conservative with its projections. Only time will tell.” But it concedes that the GSIS will
have a “weakened capacity to pay its SIF liabilities” unless premium contributions are
raised significantly and benefits are adjusted.

The GSIS added that legislators should consider the aging population resulting from
longer life expectancy and lower fertility rates. It said that life expectancy was expected
to rise to 72.7 years in years 2045-2050 (from 67.5 years in 2005-2010), while the
number of people aged 60 and above would increase in the year 2030.

It noted that in Australia, the retirement age was even slightly raised to 67 in 2017 and
may be implemented until 2023. In Malaysia, the retirement age was raised to 60 in
2012 from 55, with plans to further increase it to 65. Thailand also did the same — to
age 60 from 55. Vietnam is also considering increasing the retirement age of males to
62 from 60, and that of females to 60 from 55, the GSIS said. South Korea is studying
raising its retirement age to 65 from 60.

In Belgium, the retirement age is also to be increased gradually to 67 by 2030. In

France, the minimal retirement age has gradually increased from 60 to 62, and the full
retirement age is to be increased gradually to 67 by 2023. In Germany, the retirement
age is to be increased gradually to 67 by 2029. In Denmark, the retirement age will be
increased gradually to 67 by 2022. And from 2030 onwards, it will be increased a
maximum of one year every five years, depending on increases in average lifespan. In
Ireland, Taiwan, and Japan, the retirement age is to be increased gradually to 68 years.

European civil servants retire at the age of 66 since 2014. And in the United States,
retirees are eligible to receive reduced Social Security payments by 62, while people 65
and over are eligible to receive some free Medicare benefits if they paid Medicare taxes
for at least 10 years. The full retirement age is to be increased gradually by 2023 and
will be 67 for everyone born in 1960 or later. While everybody is considering going up,
why are we looking at going down?