Retirement ages
The rules for eligibility to retire and withdraw a pension benefit are complex and often reflect conflicting objectives. This is all mirrored in the different criteria for pension benefit withdrawal in different schemes. In 2016 the average normal pension age was equal to 59.4 years for men and 57.5 years for women in the non-OECD economies. With only two economies increasing their retirement ages the long-term age only increase to 60.3 for men and 58.5 for women.
Table 1.5, on the left hand side, shows the rules for normal and early retirement by pension benefit scheme for a person entering the labour force at age 20. In 2016 the average normal pension age across the Asian economies was equal to 59.4 years for men and 57.5 years for women across all schemes and economies. These averages should however be interpreted with caution as they do not say anything about how individuals actually react to these ages in either the schemes or economies. For the OECD as a whole the averages are 64.3 for men and 63.7 for women.
Normal pension age
The lowest normal pension ages equal 50 for women in Sri Lanka and blue collar women in China and 55 for men in Malaysia, Sri Lanka and Thailand. The highest normal pension age is 65 in Hong Kong, China and the Philippines.
In four out of the 11 economies the pension ages still differ between men and women, compared to only two of the OECD countries listed, both of which are equalising the ages.
In three of the 11 economies, different rules apply to different components of the overall retirement-income package and so these are shown separately. In Hong Kong, China and Malaysia the normal retirement age is that for the DC component as it is assumed individuals have a full career. For India it is age 58 as this enables full benefit from all components of the pension system without reduction.
The long-term retirement ages, shown in the right hand columns, indicate that only Indonesia and Singapore are increasing their retirement ages, both reaching age 65. By contrast six of the ten OECD countries listed are increasing their retirement ages. The long-term average for all OECD countries is 65.8 for men and 65.5 for women, both above the highest retirement age for the Asian economies.
Early age
Early pension withdrawal about five years before the normal retirement age is relatively common for the Asian economies.
In most defined benefit and points schemes, the adjustment is simply a parameter of the pension system: the benefit is permanently reduced by x% for each year of early retirement.
In defined contribution systems the size of the annual benefit varies and depends on the age of benefit withdrawals through the accumulated assets and the size of the annuity divisor, though for many Asian economies lump-sum withdrawal is the norm. The annuity divisor is calculated as a function of expected remaining life expectancy and discount rates. In these types of systems there is only an age of early pension withdrawal.
If all of the earliest retirement ages were applied the overall average would be 55.7 for men, compared to 59.4 for the normal retirement age. Similarly the average for women is 54.1 compared to 57.5 for the normal retirement age.