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Retirement age increase sparks debate

Retirement age increase sparks debate

By Aliza Shah, Iylia Marsya Iskandar - April 7, 2023 @ 7:15am

Many people who prefer working past the retirement age are those servicing debts or working on a contract basis. PIC BY FUAD NIZAMSenior citizens associations, workers' unions and the Malaysian Employers Federation are at odds over increasing the official retirement age of 60 years old.Malaysian Coalition on Ageing chairman Cheah Tuck Wing said the country should consider raising the retirement age to 63 as many seniors did not have enough retirement savings.The Employees Provident Fund previously reported that 51.5 percent, or 6.67 million, of its members under the age of 55 had savings below RM10,000 up to last year.The number increased by 9.7 per cent, or 591,000 people, compared with the same period in the previous year.

While there are debates that the elderly might deprive fresh graduates of jobs, Cheah said the elderly belonged in a different group with different skill sets.

"Their (the elderly) set of skills are different from the younger generation, so they play different roles within a company.

Cheah Tuck Wing

"Many of them also have the skills to be trained so that they can upskill and reskill themselves," he said, adding that the government should provide more institutions to train the elderly.

He added that Malaysia should emulate other developed countries who were looking into increasing the retirement age.

Malaysian Healthy Ageing Society president Professor Dr Shahrul Bahyah Kamaruzzaman agreed with Cheah.

She said senior citizens generally needed more savings as they were living longer.

"If we examine the practical implications of living longer, that means we need to save more than the previous generations.

Professor Dr Shahrul Bahyah Kamaruzzaman

"By raising the retirement age, you are aligning with this new reality and setting a new standard of healthy ageing, as it can aid in the conversation around ageism in the workforce by removing this expectation that someone must move on once they reach a certain point in their career," she said, adding that those who could afford to retire could continue to have that option.

She said the private sector could increase their retirement age beyond 65, and for the public sector, it would be up to the government to calculate its reserves for paying pensions, especially with an already bloated civil service.

"If we practise and maintain a healthy lifestyle, we certainly could have both the physical and mental capacity to work beyond 60. If you look at the captains of industry globally and even locally, they are older."

However, Dr Sharul Bahyah said the pros and cons of increasing the retirement age must be debated carefully.

She said provisions for social security and a retirement planning scheme must be in place.

Congress of Unions of Employees in the Public and Civil Services secretary-general Abdul Rahman Mohd Nordin, however, believed the retirement age should be lowered since those above 60 normally succumb to health issues.

He said the congress previously proposed for the retirement age to be increased to 62, but it was shot down by its members.

"Many requested the retirement age be lowered back to 55, citing health reasons, especially among working women," he said, adding that employees did not mind retiring early despite the high cost of living.

He added that many who preferred working past the retirement age were those servicing debts or working on a contract basis.

Malaysian Trades Union Congress secretary-general Kamarul Baharin Mansor said the retirement age should be maintained as the economy had yet to recover.

"We would like the retirement age of 60 to remain as it is.

Kamarul Baharin Mansor

"Our main concern is that with the economy still in recovery and many of the younger generations still looking for jobs, extending the retirement age would hinder their place in the workforce," he said.

Malaysian Employers Federation Datuk Dr Syed Hussain Syed Husman, too, believed that this was not a good time to increase the retirement age as the unemployment rate and youth employment were still high, at 3.7 per cent and 10 per cent, respectively.

"The increase in retirement age from 55 to 60 in July 2013 led to the loss of about a million jobs for fresh graduates and new entrants to the labour market, as employees that were supposed to retire upon reaching 55 continued their services up to the age of 60," he said, adding that about 200,000 private sector employees retired annually.

He said raising the retirement age would hamper efforts to reinvigorate the country's labour market.

He said employment beyond 60 years old should be based on mutual agreement between employees and employers, and it should depend on the worker's performance, health, discipline and produc-tivity.

"A better approach is to adopt a reemployment policy for those above 60 on a contract basis, which would allow flexibility for employees and employers." Additional reporting by Fuad Nizam and Nur Zarina Othman

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