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(photo credit: Ofir Ben Natan)
It’s official: the Treasury is mulling yet another money-saving stratagem –
raising the retirement age.
The Finance Ministry has tried to do this
many times. What’s new is a plan to gradually ease oldsters out of their jobs.
They’d first work part-time before full retirement – assuming that employers
The idea is to eventually link retirement age to life-
expectancy. The aim is to reach a point where nobody could begin drawing a
pension before age 70 (versus the current 67 for males and 62 for females).
Women’s pensionable age would first increase to 64. In reality, full National
Insurance Institute old-age benefits aren’t now available till age 67 for both
Finance Minister Yuval Steinitz’s position sounds entirely
plausible. With the huge baby boomer generation reaching old age, it’d be
harder and harder for their offspring to fill pension coffers. The burden, we’re
repeatedly told, is too heavy to bear (never mind that the older generation
contributed to pension funds for decades, thereby earning its pension
Hence the facile solution both here and abroad is to keep the
oldsters from retiring. That translates to paying out less while the economy
keeps profiting from their labor and extensive experience.
though, is that instead of enjoying the best of all worlds, a worst-case
scenario would manifest for all of society’s components. If older citizens are
required to work more years, they’ll per force deny younger applicants jobs.
More likely, though, is that as employees age, they’ll be sacked because long
tenure inevitably makes them expensive to their
Age-discrimination (ageism) is rampant, well-disguised and
routinely denied, with Israeli courts offering little recourse. This is true
even before retirement age. Often employees, including qualified professionals, become highly vulnerable after 50. They’re more likely to be fired and less
likely to be hired.
Raising retirement age might leave older members of
the workforce unemployed but denied pensions.
That may be fine as far as
the Treasury’s short-term bookkeeping is concerned but exceedingly devastating
for a growing sector of society.
Additionally, older jobless people are
less likely to qualify for assistance programs to tide them over, because they
amassed assets during decades of gainful employment and are therefore formally
too well-off to fit official definitions of privation.
Comparisons to the
situation overseas aren’t entirely valid. Israeli society is appreciably younger
than its counterparts in Western Europe. Consequently our problem shouldn’t be
quite as acute as in those countries where sharply shrinking birthrates mean
that fewer young workers must support more aging retirees.
It needs to be
recalled that retirement age here was already raised in 2003 by two years for
both men and women, and that in 2011 the Knesset overwhelmingly voted down a
proposal to push it off for women by a further two years. The Knesset opted to
put this option on the shelf for the next six years – until 2017 – pro forma to
allow the government time to hatch programs that would assure women employment
opportunities between ages 62 and 64.
In the meantime, many older
professionals are being pushed out by employers who have made retirement
mandatory, even if these professionals – often in prestigious positions – prefer
to keep on working.
Such absurdity, for instance, had made necessary a
Knesset bill allowing hospital physicians to stay employed until age 70 (both
genders) due to the severe shortage of doctors.
This isn’t to say that at
some point there will be no choice but to tinker with the retirement age, if for
nothing else indeed due to increasing life expectancy.
But as long as our
ratio of young to old isn’t as dire as in Europe we need to use the time to
protect older employees from discrimination and to introduce flexible
regulations that would leave open the option of continuing to work into ripe old
age without being coerced to do so.
This is trickier than meets the eye
and calls for doing away with ingrained prejudice both regarding compulsory
retirement and compulsory continued toil