Pension Age Revision

Retirement ages are not fixed in many countries: they are always reviewed to reflect the demands of the labour market. The National Pensions Regulatory Authority has given a hint about a possible upward adjustment of the age of retirement for the public service of Ghana.

There is a call for a national dialogue concerning a possible review of the retirement age in Ghana. The dialogue should focus on issues regarding the nature of profession, life expectancy, labour force requirements of the country and unemployment.

The amendment of the Constitution of Ghana gives room for the hiring of people beyond the compulsory retirement age if there is the necessity for the service of the individual. Article 199 (4), as amended, indicates that “notwithstanding clause (1) of this article, a public officer who has retired from the public service after attaining the age of sixty years may, where the exigencies of the service require, be engaged for a limited period of not more than two years at a time but not exceeding five years in all and upon such other terms and conditions as the appointing authority shall determine”.

This amendment has already addressed the nature of profession issue if a revision of the age of pension is considered. An upward revision of the age of pension should critically take into consideration the nature of the work people within the public service undertake. Some professions do not need an extension of the period of service of their workers. There should be a critical demand for the skills of the workers within a profession. The retirement age of the workers of a particular profession, where the state needs the services of those people, should be reviewed upwards. The state may not need to revise the retirement age of everyone within the public service. The amendment of Article 199 has made enough provisions for this situation.

Life expectancy is an important element to consider in determining the age of pension. If pension ages are extended way beyond the life expectancy of the country, people could only live a few years of life after retirement, especially if the life expectancy does not improve very much. Life expectancy does not mean people will automatically die if they reach that age; it is an average and some people live beyond that.

Professor Kwaku Asare, in his article (on www.ModernGhana.com ) titled Proposal to change the retirement age for Public Servants, called for the revision of the pension age to take into account the increased life expectancy, improved health standards and the need to utilize the experience and wisdom of senior employees. Parliament should amend the constitution to allow very experienced senior staff to retire at 70. This will require the experienced senior staff to impart knowledge on junior employees as part of their contract. There is also the need for knowledge management to ensure the senior staff do not offer their services at a higher cost to the state after 70.

The labour force requirement of the state should not be overlooked in determining the pension age for the public servant. There is the need to review the supply of labour and the type of labour that is required for an efficient public service.

For instance, if the supply of labour within the educational sector exceeds demand and there is no urgent need for the services of the teachers, it will be uneconomical to revise their pension age upwardly. Sectors that require special experience of the senior staff should be the focus in reviewing the pension age of public servants. Pension age should be set higher for people within a particular sector in the public service if there is an urgent need for the services of these people.

Besides, the unemployment situation in the country will impact on the age to be set for pensions. Pensions provide a space for recruitment into the public sector. Many agencies within the public sector gain the ability to recruit others when there is an increase in the number of pensions at a particular time.

If the age of pension is revised upwardly, it will worsen the unemployment situations in the country. The public sector recruits a chunk of the unemployed graduates. It indicates the overall importance of a downward review of the pension age to accommodate more young graduates leaving school.

In my opinion, there may not be the need for universal upward review of the age of pension for the public sector. Rather the age of pension needs to be revised upwardly for people where there is an exigency for the services of these employees. The services of some employees within the public service may not be required after retirement. Therefore, an increase in the age of retirement of such persons is unnecessary.

Emmanuel Kwabena Wucharey

Economics Tutor, A growing Activist and Religion Enthusiast.