Retirement policy needs careful thought

PUBLISHED : Monday, 10 June, 2013, 12:00am
UPDATED : Monday, 10 June, 2013, 3:35am

In an ideal world, the question of when to retire should be a personal choice. Arguably, there is no justification to retire at a certain age. Alternatively, employees can opt for an early exit at any time, as long as money is not an issue. But in reality governments around the world like to decide on behalf of the people, taking into account issues like social norms, life expectancy, economic vitality as well as public spending. Changing social and fiscal conditions have prompted many governments to raise or abolish the age limit.

It comes as little surprise that Hong Kong also needs to study whether the retirement age for civil servants should be extended beyond 60. Unlike some debt-ridden European countries, which seek to reduce pension payments by prolonging people's working life, the review by the Civil Service Bureau has been spurred by an ageing workforce. According to the bureau, the number of retirees is expected to surge from an annual 4,100 at present to some 7,000 after 2017. For an establishment of 170,000, the percentage does not look alarming. But the brain drain does raise concerns about succession and management.

How long one should work is open to debate. With life expectancy among the world's longest, Hong Kong's compulsory retirement age regardless of personal preference and health seems to be a waste of human resources. As the government is reviewing its policy in light of an ageing population and a dwindling workforce, it makes sense for it to take a lead and make better use of talents and experience.

That said, any changes must be thought through carefully. Although the civil service accounts for 4.2 per cent of the 3.8 million workforce, as the leading employer its conditions of service will inevitably have an impact on the private sector. Whether private companies will be put under pressure to follow suit will be a matter of concern. The implications for public finance and career prospects for younger civil servants have to be thoroughly assessed. These are the issues that must be fully debated before making a decision.