COYLE opposes move to increase retirement age to 60 years

• Urges need for employing younger generation for innovation and creativity
• Says continuation of employees beyond 55 will incur additional financial burden to companies by way of higher salaries 
• Points out the move could also drastically increase unemployment rate

The Chamber of Young Lankan Entrepreneurs (COYLE) yesterday opposed to the government’s move to increase the retirement age to 60 years, which was announced in the Budget 2021 presented in November. “COYLE addresses a vital factor that will adversely affect the private sectors’ ability to move forward in the light of the unprecedented uncertainty caused by the COVID-19 pandemic, resulting in economic upheaval and its adverse effects on the business sectors of the country. 

The retiring age for the private sector be maintained at 55 years,” COYLE said a in a brief statement. 

“As companies grapple with regaining a foothold in their businesses, it is imperative that innovation and creativity are needed to boost the industry. To this end, it is necessary to have an infusion of thinking of the younger generation, who need to be employed and that would be hindered with the extension of the retiring age to 60 years,” the statement added.

It also said employees at age 55 have in general reached optimal salary scales although their productivity is either not on par with younger employees or fast deteriorating. 

“Continuation of employees beyond 55 will only incur an additional burden, since organisations will be compelled to pay high salaries for the retiring age employees. 

Additionally, employers need to further incur salary increments every year for five additional years in par with other younger and more productive employees. 

The increase of gratuity payment, which is based on the last drawn salary will be an additional burden to organisations,” the statement noted.

COYLE further said that by changing of retiring age to 60, it will deprive companies of hiring younger employees with new perspectives and innovative thinking due to the lack of such vacancies. 

“This will also drastically increase the unemployment rate due to the blockage of providing employment to the new generation by the retention of the retiring employees.” Meanwhile, the chamber pointed out that the private sector does not place limitations to retiring employees if they are vital to the operation of the organization since companies usually at their discretion retain their services by extension.