Involuntary Retirement: Characteristics and Implications

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In the AIST-ACFS Research Report, “The Age of Retirement” (2012), it was suggested that based on projected trends in the Australian population, there is scope for the introduction of policies that incentivise the deferral of retirement. The report argued that two avenues that should be considered for increasing workforce participation amongst older Australians are 1) raising both the preservation age and the official retirement age and 2) changing the age pension means testing arrangements.

The debate over increasing the official retirement age is receiving an increasing amount of public attention, most notably in the recent Productivity Commission Report, “”An Ageing Australia: Preparing for the Future” (2013). Increasing older age participation in the workforce has considerable public benefit in terms of reducing the reliance on public funding and enhancing the sustainability of the retirement system.

But, as the AIST-ACFS Report highlighted, while in aggregate the proposed changes would improve both Australia’s fiscal sustainability and productivity, those that currently leave the workforce involuntarily may be worse off.

This report seeks to extend the research conducted in the Age of Retirement Report by contrasting the impact that increasing the official retirement age (ORA) will have for Australia in the aggregate against the consequences that it may have for those that leave the workforce early and without choice.

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