STATE-run Social Security System (SSS) sees a longer fund life if the bill scrapping the mandatory retirement age is passed into law.
The SSS said increasing the mandatory retirement age in the country for private workers will give them an extended opportunity to pay contributions and complete the qualifying conditions for a retirement benefit.
Moreover, SSS said this will lead to a higher pension upon retirement given that employees will have longer working years.
“The Social Security System (SSS) generally supports initiatives to increase the retirement age of Filipino workers. While raising the retirement age will lengthen the System’s fund life, SSS will also review current policies on retirement and other social benefit programs to better fit the demographic profile and serve the particular needs of senior citizen workers should this bill pass into law,” it said in a statement sent to the BusinessMirror.
The SSS earlier said its fund life is estimated to last until 2054.
Senior Citizen Partylist Rep. Rodolfo M. Ordanes Jr. earlier filed House Bill (HB) 3220, which bans an age ceiling for job vacancies and repeal the compulsory retirement age of 65.
For his part, IBON Foundation Executive Director Jose Enrique A. Africa sees the lifting of the mandatory retirement age as an “important acknowledgment that people today can and should be productive even until their very late years.”
“Scrapping it ensures that those who choose to continue working will still have their formal legal protections. However, they should of course retain the option to retire and claim full and complete benefits,” he told the BusinessMirror in a message.
While Africa acknowledged that it is possible for the unemployment figures to “nudge slightly upward to the extent that erstwhile replacement hires of younger workers may not happen”, he said this would probably be “negligible” since most work in the country is informal or through self-employment.
On whether the measure would discourage capitalists to invest in the country, Africa doubts this would happen.
“It’s hard to imagine that lifting the mandatory retirement age will discourage capitalists from investing—many countries, including developed industrial economies, don’t have mandatory retirement ages without any adverse effect on investments,” he said. “This is because many elderly workers will still be productive even past the current retirement age.”
Economist John Paolo R. Rivera from the Asian Institute of Management told the BusinessMirror the measure should be carefully studied since this may be advantageous or disadvantageous depending on the industry.
“This is beneficial to organizations that rely on the wisdom and expertise of its manpower like research firms, universities, academic/strategic/policy institutions. This may be a constraint for organizations that rely on physical manpower because they cannot easily replace aging workers,” he said. “Across the board policies like this should be carefully studied because not everyone is affected the same way.”
Labor groups have earlier bucked the bill, arguing that this will result in workers facing fewer job opportunities and having less time to enjoy their senior years.
For its part, the Department of Labor and Employment earlier said it will first study the bill before it comes out with a position on the matter.
However, Socioeconomic Planning Secretary Arsenio M. Balisacan of the National Economic Development Authority earlier expressed support for the bill, saying this would open the possibilities for senior citizens. He also said there are many 65 to 70 years-olds who are still productive.
In the June round of its Labor Force Survey, the Philippine Statistics Authority (PSA) attributed the increase in the Labor Force Participation rate between May and June to an increase in the number of 65-year-olds and up in the workforce.