I agreed that government should not forcefully retain it employees after attaining the mandatory retirement age or increase retirement age, it should be optional though majority of them would opt to leave however their wealth of experience would still be needed especially workers or expertise in health sector, technology, etc it might be very difficult for government to replace some of these key sector of the government replacing them with newly recruited employees isn't a bad idea though I prefer those employees who are about to retire retrain the newly recruited employees thereafter release them to retire because their productivity would wane as they aged in the job.
In my opinion, if the government increases the retirement age, of course there is a clear reason to retain them, as you said, with the experience and expertise they have, it is certainly natural to retain them, but in my opinion, if the government continues to retain them for a few more years, of course the generation that wants to develop will less interested in developing themselves to be able to replace those who have reached their retirement age.
I really agree with what you said, it is better to give young people the opportunity to have skills like theirs and give pensions to those who have reached retirement age to enjoy time with their families while they still have time.