PETALING JAYA: Raising the retirement age above 65 should be optional instead of across the board, say employers and experts.
They argued that such a decision has its own drawbacks despite the advantages of keeping experienced and productive individuals in the workforce.
Industry players said the decision to keep those aged above 60 on the payroll should be based on their health and nature of the job.
However, keeping on older employees would also limit a firm’s ability to hire fresh graduates and younger workers, they said.
Malaysian Employers Federation president Datuk Dr Syed Hussain Syed Husman said raising the retirement age would be good as Malaysia transitions to an ageing nation by 2035 but it cannot be a “blanket” rule – only those who are fit, healthy and have the required skills and knowledge should be considered.
“It is a good idea as people are living longer and healthier. We should find ways to keep them employed, provided their skills and knowledge are still relevant and needed,” he said.
However, Syed Hussain said the retirement age cannot be raised for all jobs as some require physical strength while others can be replaced by technology or artificial intelligence.
“Another challenge is, if we keep people longer in the workforce, how are we going to provide promotion opportunities to younger people? While we want to keep older people in the workforce, businesses must keep growing to accommodate both groups,” he added.
Increasing the retirement age will also limit opportunities for fresh graduates who are entering the labour market, he said.
In order to accommodate older workers and fresh graduates, the country must increase investment to grow the economy and provide more job opportunities, Syed Hussain said.
The idea to increase the retirement age was recently mooted again by Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said.
She suggested that the mandatory retirement age for civil servants could be raised to 65 as many 60-year-olds were still healthy and productive.
Union Network International-Malaysia Labour Centre president Datuk Mohamed Shafie BP Mammal said the expertise and services of those above 60 may still be instrumental for their organisations, but they must be medically fit and their roles must be suited for senior citizens.
“I think a retirement age of 65 is sufficient as our life span is already within the 70-80 range. This can be discussed. If 65 is not possible, maybe we can try 62 or 63, but the idea is good,” he said.
Malaysia HR Forum chief executive officer Arulkumar Singaraveloo said Malaysia could adopt a re-employment model similar to Singapore, where post-retirement contracts up to age 65 are offered based on criteria such as health, performance and discipline.
“Re-employment should be under revised terms and conditions, including a different salary scale and pension recalculation to avoid unsustainable fiscal commitments,” he said.
Associated Chinese Chambers of Commerce and Industry Malaysia president Datuk Ng Yih Pyng said factors such as medical insurance, tax incentives and further Employees Provident Fund (EPF) contributions must be looked at to raise the retirement age.
Ng said increasing the retirement age would also assist the elderly to build more savings for retirement.
“Malaysia is facing pension issues due to an ageing population and rising pension costs. It is timely for the government to explore new pension schemes, including shifting from a traditional defined benefit scheme to a defined contribution scheme for new hires, primarily utilising the EPF,” he said.
National union Cuepacs proposed raising the retirement age to 62 in 2015, but has consistently urged the government to focus on increasing salaries as a more effective measure to help boost retirement savings and better prepare for Malaysia’s ageing population by 2030.
