Retire at 45? A nice idea, but it would be at nation's expense

When a majority of people ask for an extremely skewed minimum age for retirement, with the expectation of a government pension, then public funds spent on a fully capable, but retired, workforce are being diverted from other meaningful social and economic initiatives.

Retirement is traditionally defined as the point when a person stops working completely. The debate on when someone should stop being an active member of the workforce seems to never rest, with the theories of different concerned parties - such as government, companies and employees - clashing more often than they agree.

In most developed countries, the government either determines or strongly influences the minimum retirement age. When we look around the globe, there are various standards that are considered normal. The United Kingdom sits at the high end with a normal retirement age of 68 and, interestingly enough, the United Arab Emirates is at the other end of the spectrum. Someone can technically retire at the age of 38 if he or she entered the workforce at 18, as the government only requires 20 years of work for an Emirati to be eligible for pension.

A recent poll undertaken by the General Authority for Pensions and Social Security found that almost 60 per cent of UAE citizens who were surveyed opted for a retirement age of 45, with only 16 per cent thinking that 60 would be the appropriate retirement age. All I can say is, I am glad we are not in Britain right now.

It is important to point out that retirement is, at heart, a personal choice. If someone has invested wisely, and saved enough to go into retirement and enjoy a life free of work, so be it. But when a majority of people ask for an extremely skewed minimum age for retirement, with the expectation of a government pension, then that is a different story. In that case public funds spent on a fully capable, but retired, workforce are being diverted from other meaningful social and economic initiatives.

Early retirement with full government support certainly sounds good to most people. I am sure that if you were to ask the same question in any country, you would get a similar answer. Frankly, most people like the idea of not having to work. So this isn't a UAE-specific issue, although the fortunate circumstances of the country do make it a special case. But those calling for early retirement should be aware of the negative socio-economic effects that such a measure could have on the current and future state of society.

First and foremost is leadership capability. An interesting number out of the United States is that the average age of chief executive officers is 50 years old. We are talking about one of the most competitive work environments in the world. So from that figure, it would be safe to assume that the best among global business leaders reach their professional peak at around that age.

With retirement set at an age below that level of peak performance - when leadership, strategic capabilities and professional potential all take centre stage - the UAE would lose a valuable human-capital asset. In turn, that would affect public and private sector performance, and potentially decrease the overall output of society. When experienced leaders are lost, young professionals are left without guidance.

This leads me on to my second point: the UAE has one of the youngest populations in the world, according to the Statistics Center in Abu Dhabi. Seventy per cent of the Emirati population is under the age of 30.

If society set retirement age at such a relatively youthful mark, the critical process of knowledge transfer to the young, up-and-coming workforce would be greatly impaired. Great leaders are remembered for the legacy they leave behind, and the capabilities that they convey to the future workforce that allows the next generation to prosper on its own. That capability only comes with time dedicated to training and developing a young workforce.

Finally, it is important to point out the potential budgetary problems. Sure, the UAE is fortunate to be a wealthy country, but the fiscal pressure of paying long-term pensions for early retirees could put a serious strain on the economy. Countries such as Spain and Greece are clear examples of the burden of excess government spending - although of course that is funded by taxpayers' money.

That is where UAE differs significantly. The government could finance an early retirement system from national coffers, but if an income tax for individuals was enacted, I'm sure that Emiratis would be humming to a different tune when it came to funding someone's early retirement on a sunny beach in the Bahamas.

Keeping in mind cultural sensitivities regarding family life in the UAE, as well as concerns about women's retirement, there have to be compromises. This could come in the form of alternative retirement plans, such as semi-retirement, which would reduce working hours for specific segments of the workforce.

It is critical that the mindset of the workforce changes. We are fortunate to have a government that provides every opportunity to learn, develop and contribute to society. The least that we can do is push the limits, reconsider retirement expectations and contribute to the development of the younger generation, ensuring they have access to the very same opportunities.

Khalid Al Ameri is a social affairs commentator currently studying for his MBA at Stanford University in California

On Twitter: @KhalidAlAmeri