WITH a rising global ageing population, the official age of retirement is edging upwards in most developed countries.

       The move is driven by a need to sustain labour productivity and support senior employees who want to work longer in order to improve their financial position during retirement phase.

       Higher costs of living are also nudging senior citizens to continue working as long as their health permits.

       As such, there has been a rise of inclusive workplaces in supporting part-time work arrangements, skills training and career discussions for senior workers in developed countries.

       Citing the examples of Japan and Denmark, Deloitte South-East Asia consulting director Lee Yun-Han says employers in these countries commit to engage with matured workers from age 40 on their career plans.

       “Singapore, the Netherlands and the United Kingdom also have schemes for workers to receive guidance on career plans,” he adds.

       But there is a telling trend showing that the official retirement age, which had been declining over the last last six decades, appears to be reversing now.

       Notably, the average retirement age for men fell from 68.6 years in 1960 to 63.5 years in 2009, while for women, it dropped from 66.7 years to 62.3 years in the same period, according to a report by the Organisation for Economic Co-operation and Development titled “Pensions at a Glance 2011”.

       Now it can be seen that governments in European countries with older populations are looking to increase the official retirement age to even 68 years.

       For instance, Ireland’s retirement age is to be raised to 68 years by 2028, from 66 currently.

       Denmark is also looking to up its age of retirement to 68 years by 2030 from 66 now.

       Another European country, Germany, will raise its retirement age to 67 years by 2029 from 65 presently.

       But which country has the highest average age of retirement?

       According to AmBank Group chief economist Anthony Dass, Norway has the highest average age of retirement, with people in the country retiring between 62 to 75 years, depending on the earnings-related benefits and pensions.

       For the country’s national pension, Denmark’s retirement age stands at 67 years presently.

       Besides European countries, Taiwan’s retirement age will gradually creep upwards to 68 years by 2028 from 65 currently.

       Even China, the world’s most populated country, is looking to raise its retirement age to offset the economic impact of its ageing population. The retirement age, which is set at 60 years for men and 55 years for women working in the public sector, has not been changed since 1949.

       Meanwhile, in Australia and the United States, the retirement age will also climb upwards to 67 years from 65 currently, within the next two years.

       Forecasting alarming figures, Dass estimates that one in five persons in the US will be of retirement age or older by 2050, which is likely to be a 47% increase from 2015.

       “Globally, we’re seeing a dramatic increase in the number of people reaching retirement age.

       “But ageing in the US pales in comparison to Brazil, China, Hong Kong and South Korea, where the percentage of the population that is over 65 is projected to more than double. Declining fertility rates magnify this effect as well,” he adds.

       In contrast, the United Arab Emirates (UAE) has the lowest average retirement age at 49 years.

       In South-East Asia, Singapore has announced that the government would increase the current retirement age of 62 years to 65 by 2030.

       UOB Malaysia senior economist Julia Goh points out that the population in this region is relatively younger compared with developed countries.

       This, in turn, drives growth potential and dynamics of the region.

       “For Malaysia, it may be more challenging. This is given that the country’s gross domestic product per capita is low. Also, large parts of the working people do not have enough savings for retirement,” she says.

       Notably, a report by the Work Economic Forum in 2017 highlighted that the retirement savings gap is becoming large in some countries and is putting strain on the pension systems around the world.

       This means that the gap between what people save and adequate income needed for retirement is getting wider.

       The report also discloses that the retirement savings gap and income is estimated to grow significantly larger, expecting it to balloon to a massive US$400 trillion (about RM1,666 trillion) by 2050.

       This is due to rapidly ageing populations, increasing percentages of informal sector workers as industries are disrupted and a growing middle class throughout the world, it says.

       With the ageing population of developed countries putting strain on the global pension and retirement plans, Dass says governments globally are facing inadequate income to deal with the needs of this group.

       “Public pension systems alone, which are already under pressure, typically replace just a fraction of what is needed for a secure retirement.

       “In addition, people are not saving enough, whether on their own or through voluntary retirement plans,” he explains.

       Moreover, Dass reckons there is a lack of coverage of employees in the informal sector in the retirement systems globally, saying that more than half of the world’s workforce is employed informally through temporary or part-time working arrangements.

       “Whether workers take these jobs out of necessity or for the autonomy, variety and mobility they offer, they are generally not well covered by any mandatory or voluntary retirement systems that are available to the formal sector, even in a more matured market like the US,” says Dass.

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       Having said that, Deloitte’s Lee suggests that governments help older employees to remain economically productive to strengthen retirement adequacy and ensure sustainability of the pension systems.

       He notes that governments globally could also have an inaccurate view about ageing workers.

       Citing Deloitte’s 2018 Global Human Capital Trends report, Lee says 20% of respondents viewed older workers as a competitive disadvantage, and in countries such as Singapore, the Netherlands and Russia, this percentage was far higher.

       “In fact, 15% of respondents believed that older employees were an impediment to rising talent by getting in the way of up-and-coming younger workers,” he points out.

       As such, Lee says governments globally must create inclusive supportive environment for senior workers who are able and willing to work.

       “Governments should also strengthen anti-discrimination legislation in the workplace, partly to address age-related discrimination,” he opines.