In a submission to federal cabinet in February 1999, the-then Attorney-General Daryl Williams argued that scrapping compulsory retirement for regulators, central bankers, tribunal members and other statutory office holders would bring them into line with Commonwealth public servants and many of their state and territory counterparts.

But cabinet papers released by the National Archives of Australia show that the Defence Department sought, and was granted, an exemption from the change.

While backing an end to compulsory retirement for most workers, the department argued the concept "still [has] a great deal of merit" for its own staff, including the Chief of the Defence Force, his deputy and the three service chiefs.

"They lead and manage the Armed Services in which compulsory retirement ages apply to all personnel," the department told cabinet. "For these reasons, an exemption in relation to ADF statutory appointments would be appropriate, and the present compulsory retirement age system retained.

Under current arrangements, ADF personnel must retire at 60 years, and reservists 65 years, though the minister can grant exceptions for specific officers and members.

The Keating government approved scrapping compulsory retirement for public servants in 1995 but it only became law when the new Public Service Act 1999 came into force in December 1999.

Legislation to remove compulsory retirement for statutory officers was not introduced until 2001 and covered more than 100 positions.

The change did not cover High Court and federal court judges, who under the Constitution are required to retire when they turn 70.

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Compulsory retirement for any worker (apart from the ADF and the federal judiciary) became illegal in 2009.

The move to scrap mandatory retirement for statutory office holders was made as part of measures to boost the workforce participation of older employees.

Mr Williams told the Howard cabinet that removing the age limit for statutory office holders would be "most welcome by the aged community as a further example of the government's resolve to remove unnecessary barriers to the continued employment of those over 65".

He said it was also consistent with the government's policy to provide incentives to work beyond the minimum retirement age.

The need for older staff to work longer is building as the public service workforce ages.

Analysis by the Australian Public Service Commission shows that almost 45 per cent of public servants will be eligible for retirement in the next 10 years, up from just 30 per cent in 1996.

The effect of ageing is even more pronounced among senior executives, almost half of whom can retire in the next five years.

The commission says: "this represents a significant workforce risk to the APS".

But it said the hit to retirement incomes from the global financial crisis, combined with the closure of the CSS superannuation scheme and the development of more flexible working arrangements were helping to encourage bureaucrats to work longer.