Retirement Age - Company Policy

Dear Friends,
Our company has policy of retirement age at 60 years, now we want to increase this age by 2 years. kindly suggest the pro and cons of increasing this age particularly if there is any leagal requirment.
HK

It should be made as an optional. If anyone unwilling to serve after the normal retirement age as prescribed by Govt, you can not force them to continue beyond the period.

Mr.Kutty,
In India, the normal retirement age is 58 or 60. There is no govt. rule for private sectors. But when the company mentioned the retirement age in the appt. letter, they can not arbitrarily increase or decrease the retirement age which can be done only on mutual consent.

So a clause can be made while implementing the increased retirement age.
Those who are already in service may either retire on attaing the age of 60 years or they may opt for the revised retirement age of 62 years.
A time limit to exercise the option can be given to all existing employees with a clause that option exercised once cannot be withdrawn or amended.
For all those employees joining the organisation after the implementation of the new retirement age, it can be 62.
In addition to this, anyone wanted to take voluntary retirement also can be permitted.

One more thing. If there is a provision regarding retirement age in the certified standing orders or service rules, it has to be amended after following the proper procedure.

Mr.Kutty,
I am in one of top industrial houses. It is clearly mentioned in the appt letter that after attaining 58 yrs, the service can be extended by mutual agreement upto the age of 65 yrs subject to medical fitness. No ambiguity on this. If I am willing to serve, I will do so after 58 yrs otherwise retire on my own.

I think if the age is increased then absenteesim will also be on the higher side...moreover its now time for the young and jobless to get opportunities....think about it

Hi,
The retirement age as per EPF Rules is 58 years. However a private company can define its own retirement age. But then to have a higher age for retirement has its own pros and cons.
1. The good thing is that the company can utilise the services of a very experienced senior person for a longer time but then the management should not worry too much about his quality of work turnout as due to aging process a person could become slower and may not able to achieve the same targets as a younger person.
2. The employee may be suspectible to health problems and efficiency as a younger person could not be expected.
2. Suppose you were to increase the retirement age to a higher age, then you would be stuck with a problem of not being able to complain about those aged employees who do not deliver at the speeds required by you. If you can afford to fix lower targets to them then this could lead to disgruntlement amongst workmen of the same category.
HENCE
3. To avoid all problems it is better you take persons after retirement on a contract basis to be renewed on a yearly basis - as a consultant. This way you still get to benefit from their knowledge/skillsets while not strictly making him an employee.
Think it over
regards

Is there any legal requirement that the employee should be informed about his retirement in advance? Say the appointment order mentions the retirement age as 55 years , do we need to inform him in advance about retirement?

The Retirement Age is generally mentione din the Appoinment Letter and also figures in the Standing Orders of the Co. wherever applicable.
However, retirement age at 60 is a good age to retire employees. Extending the same also amounts to blocking employment avenues for the next gen. aspirants.
I would suggest that you stick to the age of retirement as has been prescribed in the rules of your co. You may give people Annual Post Retirement Contracts purely on organizational needs basis.
Vasant Nair