Prospects for retirees


  • Business
  • Saturday, 17 Mar 2012

WITH Malaysia in the final stages of drafting a new law to increase the retirement age in the private sector from 55 to 60, retirees can look forward to the opportunity of working longer and earning more money.

Despite some mixed views on this, it is not difficult to see why there is a need to prolong the legal working age. In Singapore, the retirement age is set at 62, with countries such as Thailand, Brunei and Indonesia already observing 60 years as the official retirement age.

In a survey of 3,485 job seekers aged between 18 and 41 conducted by online recruitment company JobStreet.com in October last year, it was revealed that some 84% agreed with the retirement age extension because they felt they needed to work till they are older to get higher retirement savings due to the increase in life expectancy.

“With the average life expectancy of Malaysians at 74 years old, the average retiree will need sufficient cash to sustain them for at least 20 years,” an industry observer says.

According to data by the Employees Provident Fund (EPF), about 73% of retirees have less than RM50,000 in their savings while only 17% have over RM100,000.

A 2003 survey by the EPF also revealed that 14% of its members used up all of their savings from EPF three years into retirement while another 70% used up their savings within 10 years.

Furthermore, according to reports, up to 99.9% of the contributors withdrew their EPF savings in a lump sum once they reached the age of 55.

Federation of Malaysian Consumers Associations president Datuk N. Marimuthu says with many Malaysians today marrying at a later age, it is necessary to increase the retirement age.

“Many people marry and have children late in their lives. When they retire, their children are still young and they still need money to finance their children,” he says, adding that increasing the retirement age to 60 years is “practical”.

Not too old to work?

AS Malaysia moves towards being an ageing society by 2030, with 15% of the population aged 60 and above, Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan says there will be a need to “properly manage and utilise the older employees”.

Malaysian Institute of Human Resource Management honorary general secretary J. Aresandiran says that with the local economy on a steady growth trajectory, the country cannot risk “too many people retiring”.

“There are many companies today that are having problems filling up their mid-management-level posts and are suffering. If they have the relevant skill, you should retain these people (retirees) or bring them back (if they have retired),” he says.

But will extending the retirement age means more job opportunities for the elderly?

“One needs to take into consideration the younger generation that is coming into the workforce, many of whom are able to take on jobs that are more physically demanding,” says one industry observer.

Abdullah Busu Hanifah, former chairman of the Incorporated Society of Planters, says it is a good idea to bring back skilled retirees.

“This is especially for professionals. If they have the skills, why not (bring them back)?”

Abdullah Busu notes that the plantation industry is facing a shortage of “competent people.”

“Many of the planters were trained from the pre-World War 2 era. It's a hands-on job, set in a rural area and we don't get many people from the newer generation coming into this line,” he says.

Shamsuddin, however, believes that the issue of dealing with physically-demanding jobs can be “compensated”.

“The older employees can offer higher skills and a wealth of experience and these attributes will compensate for the expected lower physical strength. There is, therefore, a critical need for the country to set up the appropriate policy on the employment of older employees.

“The younger employees may resent the move to increase the existing retirement age. However, it is critical that we review our existing retirement age and with proper implementation such move would not be to the disadvantage of the younger workers,” he says.

Shamsuddin, however, admits that older employees are more suitable to perform works that are not physically demanding.

“With use of some simple machines, older employees may be able to perform works deemed to be heavy. MEF is of the view that retirees from sectors that require heavy manual work such as plantation and construction should be retrained so that they may be able to take up jobs in other sectors after their retirement.”

Aresandiran observes there are still many people in their 50s and 60s who still take on heavy jobs. However, he says physically demanding work should be given to younger and more able-bodied individuals.

“It's up to the company. They don't necessarily have to give the tough jobs to the elderly people. These kind of skills can be passed on to the younger generation.”

Abdullah Busu concurs that retirees don't necessarily have to retain their old positions.

“The retirees could be brought in to take on a consultancy or training position and pass on their knowledge to the younger employees,” he says.

On another note, Shamsuddin feels that increasing the retirement age will not increase the level of competitiveness of the local workforce, especially among the younger generation.

“We are relying too heavily on foreign workers. Thus, it is important for Malaysia to relook its manpower utilisation so as to ensure that the available human resources are utilised in an optimal way.

“Increasing the retirement age per say would not increase our competitiveness. However, with appropriate skills and up skilling of our entire workforce, labour productivity will be increased, and thus, our competitiveness will be enhanced,” he says.

Retirement age a non-issue?

For many people who choose to continue working past retirement age, the age limit is not necessarily an issue.

“If you're enterprising enough, you could work from home or even start your own business,” says Janice Tam, a retired school teacher who now provides tuition classes for primary school kids.

“I think it's a good move to increase the retirement age, given the high cost of living these days. But I feel it's better to become your own boss as it provides more flexibility. You can work at your own pace and avoid the hassle of travelling to the office and back.”

Tam says many retirees today view retirement not as an end, but rather, a new and exciting phase in their lives. She also says that “being your own boss” offers better financial prospects.

“If you work for an employer, your income would likely be fixed. If I worked for an organisation and taught their kindergarten children, for instance, my salary would remain the same, regardless of the size of the classroom.

“But by giving tuition classes on my own, I earn more as my pupils increase. Of course, working for an employer is less risky,” she says.

G. Murthy, 58, says having a long working career can provide retirees with the confidence and knowledge to launch a business of their own. Having served with the armed forces for a number of years, he now heads his own security firm.

“My time with the armed forces has given me the experience and confidence I need to set up my own business,” he says.

But a post-retirement job need not be inspired from a previous working experience. Sometimes, running a well-run family business is all you need to secure your financial position going into your “golden years.”

Rashid Abu Bakar, 69, used to help his mother sell nasi lemak when he was growing up. After retiring from government service, he is continuing the business with another family member.

“It provides a decent side income in addition to the pension that I get every month,” Rashid says, adding that he enjoys doing it after all these years.

“I think the most important thing is to enjoy what you're doing,” he says.

Separately, part-time college tutor Rashid Ali says retirees should constantly upgrade their skills to remain “marketable.”

“It can be a huge sacrifice, but if it means boosting your income prospects, then why not,” he says.

Related Stories: Malaysia needs flexible labour laws Pushing back the retirement age World's ageing population

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