Editorial: Gov’t needs to prod firms into upping retirement age
April 20 , 2021Revisions to senior citizen employment law went into effect this month, obliging—but not mandating—companies into raising their employee retirement age to 70. A recent Cabinet Office survey found that over half the respondents aged 60 and above replied they wanted to continue working after 65. The revised law was enacted to meet such demand. It should also help firms looking to retain motivated workers with valuable experience and skillsets.
The revised law offers employers five options, among them being to raise the retirement age to 70, rehire them as contract employees or simply eliminate the mandatory age limit entirely, while the previous law offered just three.
In a study by the Ministry of Health, Labor and Welfare released in January 2021, merely one-third of all companies reviewed allowed employees to work beyond 66.
The remaining two-thirds still cap retirement at 65, primarily out of management concerns over higher, seniority-fueled wages and the squeezing of new hires.
Komeito policy czar Yuzuru Takeuchi is calling on the government to actively publicize success cases and extend special subsidies to incentivize business operators in rolling back the retirement age.
The move meets the needs of our times, when people can realistically expect to live to 100 and hope to contribute in some meaningful manner regardless of how old they may be. People working well into their sixties—and possibly beyond—also help bolster a shrinking taxpaying base, which in turn helps fortify the fatigued social security safety net.