The rules for eligibility to retire and withdraw a pension benefit are complex and often reflect conflicting objectives. This is all mirrored in the different criteria for pension benefit withdrawal in different schemes. The 2020 average normal retirement age across OECD countries for an individual with a full career and who entered the labour market at age 22 was equal to 63.4 years for women and 64.2 years for men. For the Asian economies the average is 59.5 years for men and 57.7 years for women.
Pensions at a Glance Asia/Pacific 2022
Pensions at a Glance Asia/Pacific
Current retirement ages
Key results
In many Asian economies, different rules apply to different components of the overall retirement-income package. The normal retirement age reflects the age of eligibility to all schemes combined without penalty after a full career from age 22. Therefore, where normal retirement ages differ across pension schemes the maximum across schemes defines the normal retirement age of the country. The exception for this rule are targeted schemes which may not apply to full career workers at low earnings levels.
Table 1.4 shows the rules for both normal and early retirement for mandatory pension schemes. “Normal” retirement is defined as receiving a full pension without penalties. In some schemes, a pension can be claimed earlier, from the “early” retirement age onwards, implying benefit penalties that adjust for the longer retirement spell. The indicated ages are theoretical, applying to a person entering the labour force at age 22 and working without interruption.
Early age
A very early pension withdrawal is often only possible in occupational pension plans, like in Australia and France at age 55, for OECD countries. In the Asian economies, it is possible to retire early at age 50 in Malaysia under the FDC scheme. The non-occupational public schemes in both Korea and Lithuania allow receiving benefits before age 60. In the FDC schemes of Chile, Colombia and Mexico and the DB scheme in the Slovak Republic, early retirement requires that the pension entitlements exceed a floor that is a proxy for the subsistence level. In the Slovak Republic, this is only possible within two years to the normal retirement age while no age condition apply in Chile, Colombia and Mexico.
In general, most DB and points schemes specify an early retirement age next to the normal retirement age. Public DB or points schemes typically allow withdrawing a pension between 2 and 5 years earlier than the normal retirement age. In Greece and Luxembourg, the early and normal retirement ages coincide for the case of an uninterrupted career from age 22.
Only in Austria (for women), Costa Rica, Hungary, Republic of Türkiye and the United Kingdom do DB schemes currently not include an early-retirement option. Basic pensions and targeted schemes often exclude such a possibility as well. Exceptions are found where the public pension consists of both a basic and a DB component, like in the Czech Republic and Japan.
For comparison across countries, it is assumed that all pension pots within DC schemes are annuitised, even if this is not the case in practice. Then there is an automatic actuarial adjustment to the remaining life expectancy at the point of initial claim.
Normal retirement age
In many OECD countries, different normal retirement ages apply to different components of the overall retirement-income package. In particular, in those countries where targeted schemes have a higher eligibility age than the earnings-related scheme, the age of pension benefit withdrawal may in practice differ across earnings levels – individuals with high earnings-related pensions might afford to retire before having access to first-tier components. Pension schemes in 4 Asian economies still specify normal retirement ages by gender setting a lower age for women than for men.
The OECD defines the normal retirement age in a given country as the age of eligibility of all schemes combined without penalty, based on a full career after labour market entry at age 22. However, at retirement not all of the different components actually apply. For example, men and women in Malaysia, are eligible for the defined contribution component at age 55 but they are not eligible to the targeted pension before age 60. As they would be ineligible for the targeted scheme at age 60 with a full career their normal retirement age is therefore age 55 in 2020 (Figure 1.4).
In 2020, the OECD average normal retirement age was equal to 64.2 years for men and 63.4 years for women. For the Asian economies it was much lower at 59.5 years for men and 57.7 years for women. It ranges from a low of 50 for women in Sri Lanka and 55 for men in Malaysia, Thailand and Sri Lanka to 65 in Hong Kong (China), the Philippines and Singapore for both men and women. The largest gender difference of 5 years are in China, Pakistan, Sri Lanka and Viet Nam (Figure 1.4).
Table 1.4. Current early and normal retirement ages by type of pension scheme
For an individual retiring in 2020 after an uninterrupted career from age 22
Note: n.a. = early retirement or deferral of pension is not available; Occ = occupational, Min = minimum pension, T = targeted,. = no normal retirement age indicated as benefits automatically adjusted to the age of retirement in an actuarially neutral way. Normal and early retirement ages for a scheme describe the ages at which the receipt of a pension, respectively, with and without penalties is first possible, assuming labour market entry at age 22 and an uninterrupted career. Credits for educational periods are not included.
Source: Chapter 4 for Asian economies, OECD “Country Profiles” available at http://oe.cd/pag.
Figure 1.4. Current normal retirement age by gender
Note: The retirement age for women in China depends on the type of work and lies between 50 and 60.
Source: Chapter 4 for Asian economies, OECD “Country Profiles” available at http://oe.cd/pag.