The Case for Increasing the Retirement Age from 55 to 65

ACTING President Guy Scott recently signed a Statutory Instrument to increase the retirement age for civil servants from 55 to 65 years. This is part of the short- and medium-term measures to strengthen the sustainability of the pension systems in the country. The move did not go down well with the labour movement and jobless youths. This has become an election issue with a number of candidates promising to reverse the SI. The idea of working ten more years does not seem appealing for many people. It definitely reduces the length of time that retirees will have to enjoy the fruits of their labour, or the time they need to invest in their own private operations. It is also argued that Zambia's life expectancy is still low, so most workers may not live long enough to enjoy their retirement longer. Therefore, we need to sort out the issue of retirement age early before the pension schemes are choked by having to make huge payouts to people who are still able to work.

According to the Labour Force Surveys, the government sector employed about 200, 000 workers in 2008. This increased to about 270, 000 workers in 2012. This means that the civil service can only take up about 14, 000 new employees annually. The 5 million youths have to compete with adults for these same jobs. The lack of prior work experience, low skills and competence gaps, and generally poor work attitudes means that the youth have a very slim chance of being hired for these 14, 000 jobs. Youths therefore have to look to the private sector other than the public sector for jobs.

Spending 10 more years on the job means that you will be able to save more and ensure that all your children have a better chance of completing their education. How many stories have you heard of school-going children unable to finish school because their father retired at age 55 and he no longer has a regular income to afford the high school fees? This parent either takes his children out of school or calls his younger brother who is still in employment to take up the responsibility of paying for his nieces/nephews' education, thereby putting a burden on his brother's already bloated family size and thereby exacerbating the poverty cycle.

Of course, the new retirement age of 65 should not be uniform. An article by ZIPAR researchers Bernard Banda and Caesar Cheelo which appeared in the Zambia Daily Mail called for due consideration of sectoral characteristics of employment by positively discriminating between professionals with higher specialisation and workers with manually demanding occupations (“Rethinking the Retirement Age, Zambia Daily Mail, June 25, 2012). People in physically demanding jobs such as construction workers may not easily delay retirement on account of the physical demands of their jobs. Increasing retirement age may lead to lower productivity in some labour-intensive sectors. There are certainly people, especially low income populations, who are engaged in more labour-intensive types of work who tend to have

shorter life expectancies than their wealthier counterparts. It would be folly to have a construction worker, for example, retire at age 65 when they are incapable of performing tedious duties. It definitely makes sense for a lecturer to continue holding chalk for ten more years.