Retirement at age 60 is generally not mandatory for employees in the Philippines. In most cases, 60 is an “optional” retirement age (the employee may retire), while 65 is the “compulsory” retirement age (the employee must retire), subject to important exceptions explained below.

This article focuses primarily on private-sector employment, then contrasts the rules for government personnel and certain special sectors.

1) The Basic Rule in the Private Sector: Optional at 60, Compulsory at 65

Optional retirement (age 60 to 64)

Under Philippine labor standards, an employee who reaches age 60 generally becomes eligible to retire—meaning the employee can choose to retire—if the employee also meets the service requirement (commonly at least 5 years of service with the employer, for the statutory retirement pay rule).

Key point: Eligibility is not the same as compulsion. Turning 60 does not automatically end employment.

Compulsory retirement (age 65)

At age 65, retirement is generally treated as compulsory in the private sector. At this point, the employment relationship may be ended due to reaching retirement age (assuming it is applied properly and consistently).

2) So When Can Retirement at 60 Be Mandatory?

While the general rule is that 60 is optional, retirement at 60 can become effectively “mandatory” in a lawful way if there is a valid and enforceable basis—most commonly:

A) A company retirement plan, policy, or employment contract sets a lower compulsory retirement age

Employers and employees can be bound by:

a company retirement plan,
a collective bargaining agreement (CBA),
an employee handbook policy, or
an employment contract,

that provides for compulsory retirement earlier than 65 (including at 60), provided the arrangement is valid, clearly communicated, consistently applied, and not used to circumvent labor protections.

Courts have recognized that a lower compulsory retirement age can be enforceable when it is shown to be a bona fide retirement plan/policy rather than a pretext for termination.

B) The employee voluntarily accepts an early/optional retirement program

Employers sometimes offer early retirement programs (ERP), often with enhanced benefits. If the employee voluntarily applies/accepts (without coercion or deception), then separation at 60 can occur under that program.

C) Sector-specific rules (rare in the private sector, more common in uniformed services)

Some occupations have special statutes or regulations on retirement ages (more common for uniformed personnel and government service than rank-and-file private employment).

Bottom line: In the private sector, retirement at 60 becomes “mandatory” only if there is a valid retirement plan/policy/contract/CBA making it so, or the employee validly opts into an early retirement arrangement.

3) If an Employer Forces a 60-Year-Old to Retire Without Basis, What Is It?

If an employer requires an employee to retire at 60 without a lawful or contractual basis, that can be treated as illegal dismissal / illegal termination, because the employee still has the right to continue working until compulsory retirement age (65), absent a valid policy or agreement.

Common red flags:

No written retirement plan/policy/CBA provision
Policy exists but was never properly communicated
Sudden “retirement” used to remove a specific employee
Inconsistent application (some are allowed past 60, others are forced out)

4) Statutory Retirement Pay in the Private Sector (Retirement Pay Law Framework)

When there is no company retirement plan, or the plan provides less than what the law requires, the statutory rule provides a minimum retirement pay.

A) Minimum service requirement

A typical statutory threshold is at least 5 years of service (including authorized breaks treated as continuous under law/policy in proper cases).

B) Minimum retirement pay formula (commonly taught as “½ month salary per year of service”)

The minimum is often expressed as:

Retirement Pay = ½ month salary × years of service with a fraction of at least 6 months counted as 1 whole year.

“½ month salary” for this purpose is commonly understood to include:

15 days (half of a 30-day month), plus
1/12 of the 13th month pay, plus
cash equivalent of up to 5 days of service incentive leave (SIL)

This yields a commonly used equivalent of 22.5 days of pay per year of service as a floor for many covered employees (though the precise components can vary depending on whether SIL is applicable in the specific employment context).

C) “Salary” basis

Typically based on the employee’s latest salary rate (and in many settings, the “salary” concept follows rules on inclusion/exclusion of certain regular pay components). Disputes often arise over whether allowances, commissions, or other pay items are included—this tends to be fact-specific and depends on how the compensation is structured and whether components are considered part of “salary” for retirement computations under the applicable plan/law.

D) If there’s a retirement plan

If the employer has a retirement plan:

It must give at least the statutory minimum, or
The employer must “top up” to the statutory floor if the plan is inferior.

5) Coverage and Common Exemptions/Edge Cases

A) Most private-sector employees are covered

The statutory retirement floor is intended to protect rank-and-file and other private-sector employees, regardless of how wages are paid (daily/monthly/piece-rate), subject to typical legal exclusions.

B) Small establishments (often cited exemption)

There is a commonly encountered exemption for certain small retail/service/agricultural establishments employing not more than 10 employees, depending on how the employer’s business is classified and how the rule is applied. This area can be tricky in practice (classification and headcount issues matter), so it’s often a point of dispute.

C) Employees already receiving retirement benefits from another scheme

Even if employees are covered by SSS, statutory retirement pay and SSS retirement benefits are not automatically the same thing:

SSS retirement is a social insurance benefit (government-administered).
Employer retirement pay is an employer obligation under labor standards/retirement plan rules (unless validly exempt or superseded by an equal or better plan).

D) Domestic workers (Kasambahay)

Domestic workers are generally covered by SSS/PhilHealth/Pag-IBIG obligations and other protections under the domestic workers law. A separate employer-funded “retirement pay” like the private-sector statutory scheme may not apply in the same way as it does to typical establishment-based employment, unless a contract or policy provides it.

E) OFWs / seafarers

Retirement and end-of-service benefits for seafarers and some OFW arrangements are often governed by contracts and CBAs (and industry rules), rather than the default statutory retirement-pay setup used for local private establishments.

6) Government Employees: Different Framework, Different Default Ages

For government employees, retirement is generally governed by civil service and retirement statutes (and membership in GSIS, depending on status). The common structure is:

Optional retirement at 60 (often with service requirements, e.g., a minimum number of years in government service), and
Compulsory retirement at 65

There are also special retirement modes (e.g., for certain hazardous roles, judiciary, uniformed personnel, etc.) with different ages and service rules.

So for government employees too: 60 is usually not “mandatory retirement age” by default—it is typically optional, with 65 as the usual compulsory age—subject to the rules specific to the employee’s position and retirement law coverage.

7) Tax Treatment (Practical But Important)

Retirement pay can be tax-exempt under Philippine tax rules if statutory conditions are met (commonly involving minimum age and minimum years of service, and “once only” conditions for certain exemptions). The details depend on:

whether it is a statutory minimum retirement pay, or
paid under a BIR-recognized retirement plan, and
whether the employee satisfies the age/service thresholds and other requirements.

Because tax exemptions can turn on technical requirements and documentation, employees and employers typically coordinate with HR/accounting for correct withholding treatment.

8) What Employees Should Check at Age 60

If you’re turning 60 and want to know if you must retire, check—in this order:

CBA (if unionized): Does it set a compulsory retirement age (including 60)?
Company retirement plan / handbook: Is there a written, implemented policy?
Employment contract: Any retirement-age clause?
Past practice: Is the policy consistently applied to similarly situated employees?
Eligibility for statutory retirement pay: If you choose to retire, do you meet the age/service requirements and what minimum benefits apply?

If none of the above creates a valid compulsory retirement rule at 60, then you generally cannot be forced to retire solely because you turned 60.

9) Remedies and Common Disputes

If forced to retire at 60 without basis

Possible claims can include:

Illegal dismissal, and/or
Money claims (unpaid wages/benefits/retirement pay differentials)

Outcomes vary depending on facts—especially whether a valid retirement plan exists, whether the employee consented, and whether benefits were correctly computed and paid.

If an early retirement program was “accepted”

Disputes often focus on voluntariness:

Was there pressure, threats, or misleading information?
Did the employee clearly apply/consent?
Were releases/quitclaims signed, and were they fair and informed?

10) Practical Takeaways

No, retirement at 60 is not automatically mandatory for employees in the Philippines.
60 is generally optional retirement age; 65 is generally compulsory retirement age.
Retirement at 60 can be mandatory only if a valid retirement plan/policy/CBA/contract makes it compulsory, or the employee voluntarily enters an early retirement arrangement.
If forced out at 60 without a valid basis, it may be treated as illegal dismissal.

This is general legal information in Philippine context, not individualized legal advice. If you share your employment type (private vs government), whether there is a CBA/retirement plan, and your years of service, the analysis can be made more specific.