To retire or not to retire

  • Letters
  • Friday, 14 Apr 2017

LIFE is finite so live it well. According to recent reports in the media, the Women, Family and Community Development Ministry is mulling a proposal to increase the mandatory retirement age from 60 to 65.

I am glad the Minister explained that such a proposal would have to “be refined because it involves various agencies and a complete policy change” and that “extensive research needs to be carried out because the mandatory retirement age was only just increased to 60 in July 2013.”

Let’s take a look at the reasons for the suggestion depending on which party suggested it.

Private Sector Employees

The most logical reason is the small amount of money available at current retirement age due to low wage levels in Malaysia. This is compounded by the spiralling cost of living. Also, there is too little money to pay for long-term obligations.

Civil Servants

I have a feeling the suggestion may have come from this group, either the lower ranks or even the senior ranks. With all their perks, the latter would be only too happy to fully support the suggestion. Further, after retirement they are offered directorships and other advisory roles.

The Government

I doubt the suggestion is from the government given the high percentage of emoluments in the yearly budget. But, we may never know if political expediency is a consideration.

There may be a thousand reasons to support the suggested increase. One of them is the rise in life expectancy - it was 71 years in 1991 and 74.7 years in 2016. The other is retaining skilled workers. But life expectancy is not spread evenly. A paper prepared in June 2016, “Are the Poor Dying Younger in Malaysia? An Examination of the Socioeconomic Gradient in Mortality”, concluded that socially disadvantaged districts were found to have worse mortality outcomes compared to more advantaged districts.

The findings suggest that socioeconomic inequalities disfavouring the poor exist in Malaysia. There is also evidence of slight in growth of income inequality (in both public and private sectors) and a trend of increasing wealth concentration at the top level.

Yes, we are living longer. But are we healthier? In most cases those healthier lives are due to life-saving bypass operations, medication, cancer treatments and other procedures.

Be that as it may, the Govern­ment has to consider factors like whether the cost increase is sustainable especially for government servants given the high number in employment. Pension plans have to be “recalibrated or rationalised” to address the impact of an aging society and longer life expectancies. Pension schemes must return to the original goal of protecting against poverty due to old age.

There is a fine balance in not saddling younger generations with excessive taxes. There should not be indiscriminate benefit cuts or higher taxes. The former is harmful to the vulnerable beneficiaries and the latter will penalise the young.

Other factors include the effect on morale due to the extended time for promotion, birth/fertility rate, the ability of some older employees to continue working in physically demanding jobs, productivity, “dead wood”, high medical bills, work related pressures, availability of talented youths and the need to increase labour force participation from under-represented groups such as women with children.

In the meantime, help should be provided to employees to upgrade their skills to better match the rapidly changing needs of the labour market. Jobs of the future depend very much on future technological changes. People are recognising that retirement can be an opportunity for reinvention and new beginnings but financial barriers are preventing it. Almost one in five people fear they will never be able to retire fully.

How about giving a choice and not make the extension mandatory? Allow flexible working hours and flexible workplaces for parents and older employees and also employment extension under contract.

Do have a win-win situation for all stakeholders.


Kuala Lumpur

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Opinion , Letters; Retirement age


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