Retirement age for civil servants aligned with increased life expectancy

…𝒕𝒉𝒆 𝒑𝒐𝒍𝒊𝒄𝒚 𝒘𝒊𝒍𝒍 𝒏𝒐𝒕 𝒉𝒂𝒗𝒆 𝒂 𝒔𝒊𝒈𝒏𝒊𝒇𝒊𝒄𝒂𝒏𝒕 𝒊𝒎𝒑𝒂𝒄𝒕 𝒐𝒏 𝒋𝒐𝒃 𝒗𝒂𝒄𝒂𝒏𝒄𝒊𝒆𝒔 𝒇𝒐𝒓 𝒚𝒐𝒖𝒏𝒈 𝒑𝒆𝒐𝒑𝒍𝒆 𝒂𝒔 𝒕𝒉𝒆𝒓𝒆 𝒂𝒓𝒆 𝒔𝒖𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒕 𝒗𝒂𝒄𝒂𝒏𝒄𝒊𝒆𝒔 𝒊𝒏 𝒕𝒉𝒆 𝒄𝒊𝒗𝒊𝒍 𝒔𝒆𝒓𝒗𝒊𝒄𝒆

Phurpa Wangmo

In a move to align with increasing life expectancy, the Royal Civil Service Commission (RCSC) has revised the retirement age for all civil servants in Bhutan.

The new age limits were announced in a notification last week during the 179th Commission meeting.
The decision to increase the retirement age was made considering the substantial increase in life expectancy to 70.2 years, the expectations of higher returns on human capital investments, and the current HR gaps brought on by attrition.

According to the Bhutan Civil Service Rules and Regulations 2018, civil servants in the executives and specialists’ level had to retire from service at the age of 60. Professional and management level civil servants had to retire at 58 years, while civil servants falling under the category of SS4-SS1 had to retire at 58 years, S5-S1 and the operational category at 56 years.

With the new amendment, the executives and specialists category civil servants can retire at 63, which is an increase of three years. Similarly, the retirement age for professional and management level civil servants has been increased by two years to 60. The retirement age for SS4-SS1, S5-S1, and operational category civil servants has been increased by a year.

The Human Resource Officer (HRO) of RCSC stated, “The superannuation age for various position categories has been made depending on the unique demands and characteristics of each category. Different professions have varied physical, intellectual competency, experience requirements and demand. While some position categories have physically demanding jobs requiring relatively younger workers, others require deep expertise and intellect. Therefore considering all these aspects, the superannuation age rules have been drawn up”.

“On the contrary, it can make entering into the job market difficult for young people. At the same time, it can create challenges for the old civil servants with health problems since past that age, health can be an issue for some”, said a Civil Servant.

The Human Resource Officer (HRO) of RCSC said that the retirement age policy has been designed to ensure fair treatment of all civil servants while considering the unique demands and characteristics of each position category. The HRO also stated that the superannuation age policy will not have a significant impact on job vacancies for young people as there are sufficient vacancies in the civil service.

One of the Civil Servants said, “On the brighter side, increasing the retirement age helps the government retain a skilled workforce. Moreover, it can help reduce the financial burden on the pension system”.

The Chief Executive Officer (CEO) of National Pension and Provident Fund (NPPF) acknowledged that increasing the retirement age of civil servants would have an impact on the NPPF pension payments. This is because the retirement age was initially increased in the civil service due to the improvement in the average life expectancy of Bhutanese citizens. Life expectancy is a crucial factor in determining the pension amount of NPPF members.

Sonam, who works as a teacher in one of the schools in Trashiyangtse said that it can help address the financial sustainability of the pension system by increasing the number of years that people work and contribute to the system and moreover it can help boost economic growth by keeping older workers in the labor force with their experiences.
CEO also added, “For instance, if the retirement age remains at 56 years while life expectancy continues to improve, the NPPF’s pension liability will increase as members would live longer. Therefore a review of the retirement age will be necessary but it must be reviewed holistically considering other factors that are equally important to consider in determining the pension amount. The exercise must be taken separately in accordance with the current pension rules and regulations”.

Moreover he further added that there will be no direct benefit to NPPF with the increase in the retirement age.
The Increase in the retirement age for civil servants is a progressive step towards addressing the HR gaps in the Bhutanese civil service and ensuring the efficient delivery of public services.