Experts hail extension of retirement age to 65

In fact, now's the chance for him to spend more time with his family or take a retreat to his dream vacation destination.

But, Negeri Sembilan-born Muhammad Badrul, who was previously a bank officer in the city, opted to work after his compulsory retirement at 55.

The father of six children, who is now a financial consultant described his decision to work after retirement was not money-driven but rather to share his 30-year experience and expertise in the banking and finance industry.

"After my retirement, I still had the passion and the ability to work. Coincidentally, there was a job vacancy at another place which was too good to refuse.

"I saw this as a good opportunity for me to gain wider career exposure in this industry and furthermore, I wanted to remain active after retirement," he told Bernama in an interview recently.

But Muhammad Badrul is not alone as there are many others who are also keen to join the bandwagon. Based on a study conducted by a local university, many Malaysians in this age group remain committed to work after retirement.

The study jointly conducted by Universiti Malaya (UM) and Universiti Kebangsaan Malaysia (UKM) in October 2021 under the Social Wellbeing Research Centre (SWRC), UM for almost a year found that 4.3 per cent out of 5,277 respondents aged 60 and above are working part-time after their retirement, majority of them are highly skilled.

A senior lecturer of the Department of Economics, Faculty of Business and Economics, UM, Dr Elya Nabila Abdul Bahri who is involved in the study said, respondents aged 60 to 65 and highly skilled, are more interested in working compared to those who are moderately and less skilled.

"The joint study conducted with a UKM lecturer on ageing and retirement also shows that salary and minimum physical work are among the factors that drove them to continue to work and at the same time, they were also drawn to the flexible working arrangements without having to be tied to the various regulations at the workplace.

"Those who return to the workforce have a higher wellbeing (positive state experienced by individuals and societies) level, that is, 5.6 per cent higher than those who are fully retired in terms of health, psychosocial and mental capacity," she added.

As such, she opined that before deciding on increasing the retirement age limit to 65, employers should be prepared and plan the type of work suitable for this group based on their capabilities and that they should also undergo periodic health checks.

This is because of public perception that those who have reached 65 years of age are not suitable to work as they are often associated with deteriorating health.

Earlier, the Social Protection Contributors Advisory Association (SPCAAM) proposed that public and private sector employees be allowed to work up to 65 years of age should they choose to do so.

Besides easing the financial burden of the people, the initiative will benefit employers who will be able to tap on the resources of the skilled personnel over a longer period of time.

According to Elya Nabila, the proposal should be given weightage as there are many of those in the age group are faced with financial problems especially private sector employees who are fully reliant on their Employees Provident Fund (EPF) savings after they retire.

According to media reports, two-thirds or 71 per cent of EPF active contributors aged 55 and below do not have enough funds to raise them above the poverty level.

JOB OPPORTUNITIES AFFECTED?

"Based on studies conducted by the Department of Statistics Malaysia (DOSM), babies born in 2021 on average are expected to live 1.3 years longer to 75.6 years old as compared to 74.3 years old in 2011. However, the fertility rate in Malaysia shows a downtrend.

"This situation will influence groups to retire early as the number of young working people as taxpayers have declined compared to retirees who will benefit from the tax contributions of the working groups," she said.

Should the retirement age be extended, the nation, according to Elya Nabila, is likely to experience a shortage of human resources.

Chief Statistician, Datuk Seri Dr Mohd Uzir Mahidin in 2022 was quoted as saying, Malaysia is expected to be an aged nation by 2030 when 15.3 per cent of the population are 60 years and above.

However, extending the retirement age beyond 60 would not affect job opportunities for the younger generation given the ever-increasing demand for the latest digital and technological skills in the employment sector.

In addition, the younger generation will have many years ahead of them to be in service and achieve their career goals if the retirement age is extended.

As such, Elya Nabila said, employees should be given their rights to determine their retirement age and depending on their health and ability to work as they can make an assessment of their own capabilities.

A senior lecturer of the Faculty of Technology Management and Business, Universiti Tun Hussein Onn (UHTM) Assoc Prof Dr Nor Hazana Abdullah however disagrees with views that retirees who return to work would deprive others in an organisation the opportunities for promotion.

Rather, she said this situation will create a strategic partnership between the young and old in terms of experience and expertise, hence allowing the younger groups to learn from their elders.

"In fact, there's no need to reward older workers with promotions as employers can provide other options in recognition of their skills and expertise.

"The proposal to extend the retirement age should be given due consideration to prevent employers from adopting a capitalist policy and exploit their workers if retirees are reemployed on a contract or part-time basis," she added.

She said that some reemployed retirees are not properly compensated, with salaries that do not match their experience and skills, and besides that, they do not receive incentives that are awarded to those who have yet to reach the retirement age.

STILL PRODUCTIVE

Within a period of 20 years, there have been three changes made to the retirement age limit in Malaysia, starting in 2001 with the retirement age for civil servants extended from 55 to 56 and it was later extended from 56 to 58 in 2008.

Further changes were made in 2012 when the retirement age was extended from 58 to 60.

According to Nor Hazana, those aged 60 and above and who are still healthy can still be productive by contributing their time and professional expertise.

"I agree with the move to extend the age limit to 65 and workers should be allowed to decide when they wish to retire. Based on current trends, many retirees have returned to work, which shows that their services are still needed.

"For example, specialists at institutions of higher learning are mostly over 60 years old but are still highly regarded as the sources of reference before any decisions or policies are made either at the organisation or government level," he said.