A proposed bill to extend the legal retirement age of workers to 60 was agreed by a subcommittee of the National Assembly’s Environment and Labor Committee Tuesday. Given that there is no legal retirement age currently, the proposed bill will serve as a boost for the nation in overcoming gloom resulting from the rapidly advancing average age of the population.
If the bill is passed during a parliamentary full session, the mandatory age limit will be introduced to public firms and big businesses with 300 or more employees from 2016 and other firms from 2017. The rival parties differed on whether to legalize a salary peak system in keeping with the retirement age extension but they narrowed their differences and agreed to allow companies to take necessary measures such as changing their payment systems.
Extending the retirement age is an inevitable step in the right direction, given the looming decrease in the working-age population and approaching mass retirement of baby boomers born between 1955 and 1963.
Of course, there are pros and cons about legalizing the retirement age. Those in favor say the measure will help stabilize employment for older citizens and subsequently help to ease poverty by enabling people to work longer. The nation will also benefit from increased terms of service from experienced workers and reduced pressure on the national pension fund.
The global trend is also enabling workers to keep their jobs longer. Japan, for instance, extended its legal retirement age to 65 from the beginning of this month and most other advanced countries maintain their mandatory retirement age at 60 or above.
In this country where the average age of the population is aging faster than in any other developed nation, the retirement age set by companies is 57 on average but in reality the average retirement age is 53 because many workers are forced out of workplaces before reaching the expected retirement age.
Businesses opposed setting the retirement age into law, citing increased labor costs arising from the nation’s seniority-based payment system. And there could also be generational conflict because the number of available jobs for youngsters might decline in accordance with the extended retirement age.
Given that legalizing the retirement age would be an irreversible act, labor, management and the government need to negotiate a fair settlement regarding such a decision to minimize the impact on businesses and reduce an anticipated inter-generational conflict. True, what’s most desirable is to create an environment in which retirees can find a second job easily, which will boost the productivity of our society as a whole. Only then will an extended retirement age be unnecessary.