PETALING JAYA: While two economists theSun spoke to agreed that the retirement age should be extended, they say it should be granted across the board.
Both offered a cautionary response when asked about raising the retirement age to 65 for sectors where expertise is sorely lacking.
“To allow only certain groups of professions or categories of workers to have the right to work longer than others may be considered discriminatory,” said Universiti Utara Malaysia professor of economics Dr K. Kuperan Viswanathan.
He added that a blanket extension would not cause any significant disruption to the labour market, as previously stated by the Malaysian Employers Federation.
“In fact, it would relieve pressure on the labour market and also allow highly skilled people to continue to contribute to national output,” he said.
Given that people are on average living longer with better health services and advancements in medicine, Kuperan said it makes sense to extend the retirement age.
“Young people would be able to get jobs as long as the economy continues to grow at 6% or more on an annual basis.
“The government should consider extending the retirement age to 65. This is largely due to the fact that the number of people in Malaysia over 60 years has reached over 10% of the population, according to the Census report 2020,” he added.
“This is a sizable number to be left out of the labour market purely by virtue of an institutionally defined retirement age. Also, most B20 and M40 workers do not have enough savings for retirement and this could be a serious problem for old people who may not have sufficient support from their children to look after them after retirement.”
Sunway University professor of economics Dr Yeah Kim Leng said to avoid sector-based discrimination, social injustice and implementation difficulties, the increase in retirement age should apply across all sectors.
“Employers in the private sector that are facing labour constraints, especially skilled manpower, are already rehiring staff who have reached the mandatory retirement age. The nature and terms of engagement vary according to individual firm’s needs, prevailing labour market conditions and the employees’ bargaining power,” he said.
Yeah added that a gradual increase to 62 years and then 64 would enable smoother adjustments in individual work-life plans and in the nation’s labour market.
“Corresponding strategies and efforts to stimulate employment creation would enable the country to maintain full employment. High foreign labour dependence, under-employment and a lower-than-desired female labour participation rate are the major structural issues facing the labour market that need to be addressed simultaneously with the need to raise the retirement age,”
he added.
Yeah also said that given the increasingly ageing society and more importantly, inadequate retirement savings, it is inevitable that the current retirement age of 60 needs to be raised.
“The challenge is to decide on the timing and the extension that will optimise the nation’s social well-being and economic sustainability.”
However, Universiti Malaya Asia-Europe Institute professor of economics Dr Rajah Rasiah said while Malaysia’s population has been slowing down considerably, its cooling is still relatively slower than in developed countries, while its state finances look significantly weaker than those countries.
“Hence, while I think the government should raise the retirement age, it would have to address earlier problems associated with old age pensions and the bloated civil service in Malaysia.”
He added that the government should for now consider raising the retirement age of employees who meet high KPI standards.
“A sector that the government could consider would be education, where teachers and academics with proven tacit knowledge, including in delivering it in classrooms and in research labs, should be considered for an extension in retirement age,” he said.
