BY: Syed Fawad Ali Shah
Pakistan fixed the retirement age for civil servants at 60 in 1973, when national life expectancy was roughly 55 years. Half a century later, Pakistanis live nearly 67–68 years on average, according to World Bank demographic data. Yet the retirement framework remains largely unchanged. The widening gap between longevity and retirement policy raises an important question: should a system designed for a very different demographic reality continue to define public service careers today? At independence, life expectancy in the region barely exceeded the early thirties. Public health infrastructure was weak, infectious diseases were widespread, and only a small proportion of the population survived into old age. By the early 1970s, however, improvements in healthcare and living standards had pushed life expectancy to around 55 years. It was in this context that the Civil Servants Act standardized the retirement age at 60. At that time, the policy broadly aligned with demographic conditions. Over the next five decades, Pakistan experienced a steady demographic transition. Expanded vaccination programmes, declining infant mortality, improved maternal healthcare, antibiotics, and better sanitation significantly increased survival rates. World Bank data show that Pakistan’s life expectancy has risen from roughly 44 years in 1960 to around 67 years today — an increase of more than two decades. Yet retirement policy has changed only marginally, increasing by just two years in some cases. This demographic shift carries important fiscal implications. As people live longer, pensions must be paid for longer periods. Pakistan’s pension bill has grown rapidly, becoming one of the fastest-expanding components of recurrent government expenditure. The federal government allocated more than Rs1.055 trillion for pensions in the 2025–26 budget, reflecting a sharp increase in recent years. In its recent Article IV consultations with Pakistan, the International Monetary Fund has emphasized the need for pension rationalisation, warning that rising pension liabilities could place increasing pressure on public finances. Pakistan’s finance minister, Muhammad Aurangzeb, has also acknowledged that pension payments are becoming a major fiscal challenge and that structural reforms are under consideration. International comparisons further illustrate the problem. According to the OECD’s “Pensions at a Glance” report, the average retirement age across advanced economies is already approaching 65 and is projected to rise further as populations age. The United Kingdom has raised its state pension age to 66 and plans further increases. The United States has gradually shifted its full retirement age toward 67, while Germany and Australia are targeting similar thresholds. Japan has also moved from a retirement age of 60 toward 65 through phased reforms. Pakistan’s current retirement framework, therefore, appears relatively low by international standards. Even within the country’s own institutional structure, the assumption that professional capacity declines sharply after 60 is difficult to sustain. Supreme Court judges retire at 65, High Court judges at 62, and members of the Federal Public Service Commission may serve until 65. In the medical sector, the Pakistan Medical and Dental Council has extended the retirement age for faculty in medical and dental colleges to 75 in order to retain experienced educators and specialists. These examples suggest that expertise and institutional memory often remain valuable well beyond the age of 60. Concerns have sometimes been raised about early retirement in certain services followed by re-employment in civilian institutions. Historically, debates also focused on the possibility of individuals drawing both pension and salary after re-entering public service. Recent federal reforms have attempted to address this issue by requiring re-employed retirees to opt for either pension or salary rather than receiving both simultaneously. Such measures reflect broader efforts to rationalise pension obligations and improve fiscal discipline. Critics of raising the retirement age often argue that doing so would limit opportunities for younger workers. However, labour economists widely reject the notion that jobs exist in a fixed supply. Employment growth depends far more on economic expansion, investment, and productivity than on the mechanical turnover of public sector positions. In many cases, experienced professionals provide mentorship, stability, and institutional knowledge that strengthen public institutions rather than hinder them. The real issue is alignment between policy and demographic reality. When the retirement age was set at 60 in the early 1970s, the average Pakistani lived only a few years beyond that threshold. Today, the gap between retirement age and life expectancy has widened significantly. As people remain healthier and more productive for longer periods, forcing retirement at 60 increasingly appears arbitrary. The way forward lies not in abrupt policy shifts but in gradual, carefully designed reform. A phased increase in retirement age — perhaps moving first to 63 and eventually to around 65 — could bring Pakistan closer to international practice while easing pressure on the pension system. Such reform should be accompanied by broader pension restructuring, including contributory mechanisms, improved workforce planning, and safeguards for physically demanding occupations. Ultimately, retirement policy must evolve with society. Pakistan today is a country where citizens live longer, remain active longer, and possess valuable professional expertise well into their sixties. Aligning the retirement age with these realities would not simply reduce fiscal pressures; it would also allow the state to retain experienced human capital at a time when effective governance requires it most. In that sense, the debate over retirement age is not merely about pensions or budgets. It is about whether public policy in Pakistan can adapt to the demographic transformation that has already taken place. A gradual enhancement of the retirement age, supported by evidence and implemented with care, would represent a pragmatic step toward that adjustment.
