Future retirement ages
Future normal and early retirement ages will rise on a limited basis in the Asian economies. Assuming labour market entry at age 22 in 2020 the normal retirement age will increase to 66.1 for men and 65.5 for women on average across all OECD countries against 64.2 and 63.4 years, respectively, for retirement in 2020. For the Asian economies the normal retirement age will increase from 59.5 to 60.5 for men and from 57.7 to 58.9.
Normal retirement age
Across countries, the average normal retirement age for a man with a full career from age 22 equalled 64.2 years in 2020 (Figure 1.5). For the generation entering the labour market in 2020, this age will increase to 66.1 years (hence around 2064). For the Asian economies there is less movement in retirement ages, with an increase from 59.5 to 60.5 years for men and from 57.7 to 58.9 years for women, as only two countries, Indonesia and Viet Nam, have any plans to increase the ages.
Indonesia has a current retirement age of 57 years but will be 65 years for those entering the labour market at age 22 in 2020. Viet Nam will move to 62 years for men and 60 years for women, compared to 60 years and 55 years, respectively, for current retirees.
For the OECD the normal retirement age will increase in seven out of ten OECD countries listed, with Canada, Japan and New Zealand being the exceptions. The largest increase is projected for Italy, from 62 currently (the retirement age in 2020 was temporarily lowered from 64.8 years) to 71 years.
The lowest future retirement age for men equals 55 in Malaysia, Sri Lanka and Thailand, with women being able to retire at age 50 in Sri Lanka and age 55 in China, Malaysia, Pakistan and Thailand.
In 2020, gender differences in the normal retirement age existed in four Asian economies (Table 1.5). These gender gaps are all at least five years and will remain so for those entering the labour market in 2020, with the exception of Viet Nam, where the gender gap will be reduced to two years.
Early retirement
Under the assumption of full annuitisation, FDC schemes benefits are automatically actuarially adjusted to the age at retirement and, therefore, only an early retirement age is specified, like in Australia. However, in the Asian economies the FDC schemes in China, Hong Kong (China), India, Indonesia, Malaysia, Singapore and Sri Lanka still specify a standard retirement age indicated as normal age in the table.
The DB schemes in India, Pakistan, the Philippines and Viet Nam allow to claim a pension early. Only Pakistan has a penalty with the other countries just calculating the pension as normal, with fewer years of contribution.
Countries that combine basic or targeted schemes with occupational pensions typically set a comparatively low retirement age in the occupational scheme while the basic or targeted scheme assures a certain minimum retirement income only above 65.
Late retirement
Options for retirement deferral often mirror those for early pensions. DB, FDC and points schemes usually compensate the shorter expected retirement spell by bonuses which tend to be higher than the penalties for early retirement. Amongst the Asian economies only India has a bonus for deferral, equating to 4.0% for one year and 8.16% for two years, with no further bonus. Pension deferral is not possible in many countries as the pension has to be claimed at the normal retirement age (see country chapters for further details).
Source: Chapter 4 for Asian economies, OECD “Country Profiles” available at http://oe.cd/pag.