Retirement age to be extended to 60 years

The Budget 2021 yesterday proposed for the compulsory retirement age to be extended to 60 years for both the private and the public sectors so that all employees contributing to the national economy are 
treated the same.

The proposal also called for maintaining the same retirement age for men and women, bridging the 
gender gap.

“It cannot be justified to have two different ages for compulsory retirement for men and women. The compulsory retirement age for the public sector is 60 years, whereas it is 50 years for the private sector. It is further lower for females,” Prime Minister Mahinda Rajapaksa pointed out while reading the budget speech in 
parliament yesterday.

As the life expectancy for both genders have improved to 76.6 years from 57.5 years (female), and to 72 years from 58.8 years (male), the budget proposed an extension to the retirement age, which will be the same for the entire workforce regardless of the gender and the sector that contribute their services to.

To accommodate the change, the Premier proposed to amend the Employees’ Provident Fund Act to expand the retirement age for both men and women up to 60 years. 

As of now, EPF contributors can obtain their balances when they retire at the age of 55 years.

With this new development, it is not clear whether the private sector employees will be barred from obtaining their EPF proceeds when they retire at the age of 55.

The government uses EPF funds, which amounts to over Rs.2 trillion, to borrow at low rates to fund budget deficit.