Is a fixed retirement age a sensible option?

Much has been written about the age at which employees should retire and whether with increasing longevity, the retirement age should increase commensurately. In countries with ageing populations resulting in many living over two decades after retirement, an increasing burden on pension funds has increased the urgency of this debate. A survey from the United States indicated that while there are many factors supporting an increase in the age at which citizens become eligible for Social Security payments that a proposal of this nature is unpopular with voters.

It must be stressed however that retirement is a luxury reserved for those with permanent employment and employment is a luxury which many South Africans do not have. Many South Africans must continue working until age and/or infirmity make this impossible as they lack the financial resources not to do so. South Africa in contrast with many countries in the Northern hemisphere has a young population and a very high unemployment rate officially estimated at 33.9% but much higher in young adults actively seeking employment.

In many countries there are specified ages at which an employee is required to retire. According to South African labour law there is no statutory retirement age and an employee may not be forced to retire on the basis of age unless the retirement age is specified in their employment contract. In South Africa the retirement age varies from 60 to 65 years in many organizations, an age at which many are still productive employees. Alternatively persons who have reached the age of 60 years after the application of a means test that proves “financial hardship” are eligible for state pension irrespective of previous employment. As of 1st April 2022 this amounted to R1980 monthly with an increase to R2000 for those 75 years and older.

I was required to retire from the South African public service at the age of 65 although I remained in employment until 67 as the pension fund rules indicated that an employee “may remain in service and retire at a date not later than the last day of the month in which they attain the age of 67.” Subsequent to my retirement, I have remained active undertaking various tasks and projects both paid and unpaid for government, the private and non-profit sectors. I have authored a book, contributed to others and acted as a reviewer for several several others. I am now more than 7 years post my official retirement and remain healthy and mentally alert. So this raises the question, could I have remained in full-time employment, heading a health department as I was at the time of my retirement, for longer? In a country that has a shortage of skills, is it sensible to persist with fixed retirement ages when so many remain able to contribute but are precluded by a fixed retirement age from doing so?

While in physically demanding vocations, it is probably unrealistic to expect an employee to remain productive even up to the official retirement age. However, given good health, in most professions it would seem in the modern world with increasing longevity, that many would be able and willing to continue beyond a mandatory retirement age. Clearly there are those who at 60 plus are unable or unwilling to continue in full-time employment and would wish to retire.

It is true that the older one becomes the more fixed one can become in one’s views and become resistant to change and that the injection of new ideas and energy has the potential to reinvigorate an enterprise. In my engagements with public service health departments, the need for skilled and experienced employees has been painfully obvious. In my interactions with young and capable employees progressing through the ranks of the South African public service over the last seven years, they have indicated the benefits of working with a more experienced colleague. This is different from a mentoring role, which an older colleague or retiree can also fulfil, compared to working side by side with an individual in formal employment which creates additional opportunities for practical learning experiences. The counter argument is that with the high levels of unemployment in South Africa that the retirement age should not be raised but to increase employment opportunities that the retirement age should even be lowered to 55 without any financial penalty to the employee.

From a personal perspective, I feel that retirement based solely on chronological age does not make sense. I have experienced employees who at 50 or even younger are less productive than those who have reached the retirement age of 65. In my view the need for retirement should be a multifactorial decision based on a combination of age, performance and context. In particular, when a scarcity of skills is experienced the decision may be different when this does not exist. I am reminded of a pharmacist in his eighties, working on contract in a clinic where few others were prepared to work, whose services human resources in my department wished to terminate with immediate effect on account of his age. I visited him in the clinic dispensary and found a person more energetic and loved by the patients that many others in other similar facilities. Why then according to prescripts seek to force him to retire?

I am reminded as I write this of the saying that “age is just a number” and that the number of years that one has lived should not and does not determine one’s health, abilities and lifestyle and so maybe it should be with employment. Similarly, “old age is a state of mind” and that one’s outlook impacts on one’s mental and physical wellbeing. Reaching an arbitrary retirement age does not consign anyone to being “old”, but rather that is something that ones does to oneself!