A conditional re-engagement of government employees has been mooted as an alternative to raising their retirement age to ease the immediate strain on State finances and stave off a similar threat in future.
A COVID-19 response strategy drawn up by a six-member expert panel headed by former Chief Secretary K.M. Abraham has pointed out the financial implications in raising the retirement age and the advantages in re-hiring employees on the same pay and allowances they avail themselves of on their retirement date. The proposal has been mooted to cushion the impact of the jolt rendered by the virus spread on the State exchequer.
Kerala and Jharkhand are the two States that still retain the retirement age at 56. While Madhya Pradesh has fixed it at 62 years, it is 60 in 13 States and Union territories and 59 in Tamil Nadu.
Retirement age
Raising the retirement age from 56 years would offer a major benefit to the employees and a temporary reprieve to the government since it could defer the financial burden for disbursing the pension benefits at least for a short run.
On raising the retirement age to 60 years, the eligible pension amount for each employee would go up considerably with four increments getting added to their emoluments. The quantum of pension too would increase substantially. Hence, the panel has proposed to grant the privilege of re-employment as a matter of right without any hike in salary and other allowances. This could put off the burden for meeting the retirement benefits and the commitment would be the same even after four years.
Those opting for re-employment should agree to defer all retirement benefits till the new agreement expires and will be eligible only for a special pay.
The government should assure to pay 8% interest, or 1% more than the bank rate on the deferred benefits. The committee has proposed to extend the option, if implemented, to public sector undertakings and autonomous bodies too.
