I think he meant he is retiring from politics; he can not retire from his “designated title” as Dali lama because he is a reincarnation. He will leave his political duties and pass them to the exiled Tibetan government, but when he will day he will be reincarnated in a new born child.
This site talks about the affair rather well
http://news.independent.co.uk/world/asia/article2542350.ece
