Lower retirement age proposed to boost workforce openings
A BILL seeking to lower the retirement age for workers in both the public and private sectors was filed in the House of Representatives last week, aiming to allow Filipinos to retire in better health while creating more job opportunities for younger workers.
House Bill No. 6954 proposes lowering the mandatory retirement age to 60 from the current 65. It also seeks to reduce the optional retirement age for government employees to 55, provided they have rendered at least 15 years of service.
“This reduction offers a structural solution to help alleviate the country’s persistent labor market challenges by encouraging the retirement of older workers,” Camarines Norte Rep. Nelson S. Legacion, who filed the bill on Dec. 17, said in the measure’s explanatory note. “A substantial number of vacancies will be created for younger job seekers.”
The proposal comes as labor market conditions softened in recent months. The number of unemployed Filipinos rose by about 570,000 to 2.54 million in October from a year earlier, pushing the unemployment rate to 5% from 3.8% in September and 3.9% a year earlier.
Underemployment, which refers to workers seeking additional hours or better-paying jobs, eased to 12% in October from 12.6% a year earlier, but increased from 11.1% in September.
“Lowering the mandatory retirement age will directly open more positions, which is projected to boost economic activity,” Mr. Legacion said, adding that the entry of younger workers would help both government agencies and private companies adopt new technologies and improve workplace efficiency.
The bill also directs the Government Service Insurance System (GSIS) and the Social Security System (SSS) to conduct actuarial studies to assess the impact of an earlier retirement age on the sustainability of their funds.
“A lowered retirement age can reduce the fund’s life due to shortened contribution periods and prolonged payout periods,” Mr. Legacion said. “There must be actuarially sound principles to protect the long-term viability of the Social Insurance Fund.”
Under existing laws, retirees may stop paying contributions and begin receiving monthly pensions, with benefits sourced from the SSS for private-sector workers and the GSIS for government employees.
The measure also highlights the social benefits of earlier retirement, allowing retirees to enjoy life while they are still physically fit.
“Earlier retirement provides the precious time and opportunity for retirees to engage in activities long deferred: traveling, spending quality time with families… or simply enjoying much-needed rest and relaxation,” Mr. Legacion said. — Kenneth Christiane L. Basilio
You May Also Like
XRP and SOL ETFs Attract Inflows Amid BTC, ETH Outflows
SEC Backs Nasdaq, CBOE, NYSE Push to Simplify Crypto ETF Rules
