Benefits December 5, 2007

Longer Lives Mean Higher Retirement Ages

December 5, 2007 (PLANSPONSOR.COM) - Faced with citizens who are living longer and higher social security costs, governments around the globe have instituted a "broad increase" in social security retirement ages, according to a new Mercer report.
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A Mercer news release said its researchers analyzed changes in normal retirement age (NRA) across 47 countries as of November 1, 2007.

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According to the Mercer study, the changes have included:

  • In the Americas, Colombia’s NRA will increase in 2014 from 60 to 62 for men and from 55 to 60 for women. There is a move for the majority of Canadian provinces to eliminate mandatory retirement ages.
  • In Europe and the Middle East, the retirement age for Austrian women will be raised gradually from 60 to 65 between 2024 and 2033, while in Belgium, the NRA for women will be raised from 64 to 65. Denmark will increase the NRA for men and women from 65 to 67 between 2024 and 2027. Germany, too, is increasing the age for men and women from 65 to 67 between 2012 and 2029. Israeli legislation in 2004 is gradually raising the retirement age from 65 to 67 for males and from 60 to 64 for females, according to date of birth. In Italy, the government is proposing to increase the minimum retirement age from 57 to 58 in 2008 and then to 61 by 2013.
  • Japan is gradually increasing the retirement age under Employees’ Pension Insurance from 60 to 65. For company-sponsored retirement plans in Japan, the normal retirement age is gradually being extended from 60 to 65 between 2006 and 2013.

According to Giles Archibald, Mercer’s global head of international retirement services, “The twin pressures of increasing social security costs and lower mortality rates are driving changes in retirement provision. An increase in state retirement ages is only part of the response. In the private sector, companies are moving away from defined benefit towards defined contribution and hybrid plans to control costs and risks. This is in parallel with changes to plan governance and funding requirements.”

More information about the Mercer study is here .

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