According to an Economic Times report, The Employees’ Provident Fund Organisation (EPFO) backs raising the retirement age to ease pressure on pension funds as it believes that by 2047, India is expected to become an ageing society as around 140 million people are estimated to be above the age of 60 years.
EPFO said that this can put immense pressure on the pension funds in the nations in its Vision 2047 document.
It has affirmed increasing the retirement age in the country and aligning it with life expectancy to ensure the viability of the pension system in India and provide adequate retirement benefits.
The EPFO in its Vision 2047 document said, “Increasing the retirement age, going forward, could be considered in line with the experience of other countries and will be key to the viability of pension systems.”
Explaining the suggestion by The Employees’ Provident Fund Organisation, a senior government official told to media, “Raising the retirement age would mean a deposit of higher quantum pensions for longer duration with EPFO and other pension funds in the country and will help offset inflation.”
The EPFO is under the administrative control of the Ministry of Labour and Employment, Government of India. Currently, It has almost 60 million subscribers and it has a cumulative pension and provident fund corpus of more than Rs 12 trillion.
The provisional payroll data by the ministry of statistics and programme implementation, released in the month of June 2022 said that net new subscriber addition under the EPFO grew 41.6% to 1.7 million in April 2022 compared to 1.2 million in April last year.
According to ET report, the EPFO will include the Pension Fund Regulatory and Development Authority (PFRDA) in its plan. The PFRDA administers the National Pension Scheme of the central government.
In India, the retirement age ranges from 58 years to 65 and across the European countries, it is 65 years. On the other hand, in Denmark, Italy, and Greece, the retirement age is 67 years and in the US, it is 66 years, as most of these nations have an ageing population.
According to the National Statistical Office (NSO)’s report, India’s elderly population (aged 60 and above) is projected to touch 194 million in 2031 from 138 million in 2021, a 41 per cent increase over a decade.
There will be 93 million males and 101 million females in 2031 — up from 67 million males and 71 million females in 2021. “That’s why the number of people requiring old age income and health security will go up exponentially,” the EPFO said.