COYLE appeals to Govt. to retain current retirement age

The Chamber of Young Lankan Entrepreneurs (COYLE) yesterday called for the retirement age to be kept unchanged at 55 years to reduce the pension burden on businesses struggling with COVID-19 and encourage dynamic younger employees to join the workforce.

COYLE releasing a statement appealed for the Government to consider several vital factors it said would adversely affect the private sector’s ability to move forward in the light of the unprecedented uncertainty caused by the COVID-19 pandemic. 

Increasing the retirement age in the current environment could result in economic upheaval and have an adverse impact on multiple sectors of the country.

“The retiring age for the private sector should be maintained at 55 years. 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 said.

COYLE pointed out employees at age 55 had in general reached optimal salary scales although their productivity was 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 on 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 went on to say that changing the retiring age to 60 would deter companies from hiring younger employees with new perspectives and innovative thinking due to the lack of such vacancies. It 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.

“The private sector does not place limitations on retiring employees if they are vital to the operation of the organisation since companies usually at their discretion retain their services by extension. Whilst also commending the Government’s commitment to follow macroeconomic fundamentals through effective policy making and targeted reforms, COYLE wishes to join hands with the country’ leadership with an aim to achieve a sustainable and inclusive-growth trajectory.”