"60 Is Too Young" No Retirement Age in the US, Reemployment in Japan... What About Korea? [News SeolCham]

Heated Debate on Extending the Retirement Age: What Comes Next?
Japan Reemploys Elderly Workers Without Extending the Retirement Age
Abolishing Retirement Age in the US, UK, and Australia: "Retirement Age Equals Age Discrimination"

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As the elderly population reaches 10 million, discussions on extending the retirement age have ignited. This is due to the rapid decline in the working population caused by low birth rates and aging, as well as the serious issue of elderly poverty. How are other countries addressing the issue of elderly employment?

In Korea, the trend is to start discussions on extending the retirement age alongside pension reform. Although specific measures differ, both ruling and opposition parties agree on the necessity of extending the retirement age, and the National Human Rights Commission has also recommended the Ministry of Employment and Labor to extend the retirement age. While labor groups support extending the retirement age without reducing wages, business circles express concerns about increased labor costs and employment rigidity, advocating for the introduction of reemployment measures instead of extending the retirement age.

These business circle arguments resemble the case of Japan. The statutory retirement age in Japan is 60. However, through the Elderly Employment Stabilization Law, which guarantees employment stability until age 65, employers can choose one of the following: ▲ extending the retirement age ▲ abolishing the retirement age ▲ reemployment after retirement. Rather than uniformly extending the retirement age, companies are given autonomy to choose according to their circumstances. From the workers' perspective, this helps avoid the 'income gap period' between the statutory retirement age (60) and the pension eligibility age (65).

In Japan, business circles are also leading discussions to raise the elderly age standard. In May last year, organizations such as the Japan Business Federation and the Keizai Doyukai officially proposed reviewing the elderly age standard from the current 65 to 70. This aims to increase productivity through elderly employment amid labor shortages caused by low birth rates and aging.

China, also in Asia, is implementing a plan to gradually raise the statutory retirement age by 2040?from 60 to 63 for men and from 55 to 58 for women. Singapore, which has gradually raised the retirement age from 62 in 1999 to 63 in 2022, plans to increase the statutory retirement age to 65 by 2030.

In Europe, especially in countries that entered the super-aged society earlier than Korea, movements to extend the retirement age are emerging. This is due to concerns about increased financial burdens such as pensions when workers retire.

Germany has been gradually extending the retirement age since 2007, with the current retirement age of 66 set to increase to 67 by 2029. The public pension eligibility age will also be raised from 65 to 67 by 2029 to align the retirement age with pension receipt age. Sweden extended its retirement age from 65 to 67 starting in 2023.

In France, President Emmanuel Macron passed a pension reform bill in 2023 that includes extending the retirement age from 62 to 64 by 2030. This measure addresses concerns about the increasing number of pension recipients as the baby boomer generation retires. However, the government faced strong opposition from labor groups during the process of promoting retirement age extension. Since the retirement age is linked to the pension receipt age, extending the retirement age effectively means extending the pension contribution period.

Some countries have abolished the retirement age altogether. The United States, New Zealand, Australia, and Canada abolished the retirement age in the late 1990s to early 2000s by introducing laws prohibiting age discrimination in employment. They consider dismissal based on age itself as discrimination. In the UK, there is no retirement age, but age limits are set only for special occupations related to public safety, such as police officers, firefighters, and pilots.

However, Anglo-American countries have relatively high employment flexibility, making their situations different from Korea. In the US, the at-will employment principle allows companies to terminate employment contracts without prior notice, making dismissal easier. In the UK, the flexibility in wages based on performance-based pay systems prevents retirement age from becoming a burden on companies.