Japanese Prime Minister Shinzo Abe’s cabinet on Tuesday approved bills to call on businesses to allow their employees to work until the age of 70.
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The step was taken to help mitigate a chronic labour shortage and cover growing social security costs in the rapidly ageing country.
The legislation urges corporations to pick one of five options, including abolishing the retirement age, raising it, or allowing employees to work beyond the age limit, Kyodo News reported.
The government is expected to introduce the bills to the current parliament session and hopes to enforce them from April 2021.
The government also plans to cut benefits given to employees aged between 60 and 64, whose salaries drastically drop when they turn 60, Kyodo reported.
Japan is facing an increased demographic burden after decades of rapid ageing of the population and falling birth rates.
Critics argue Abe’s government has done little to reverse the trend.
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People aged 65 or older are expected to reach nearly 40 per cent of the population by 2060, according to the National Institute of Population and Social Security Research.