Raise retirement age gradually to ensure sufficient support, says academic
PETALING JAYA : A social welfare researcher has urged the government to increase the retirement age gradually over the course of a few years, following the prime minister's announcement that the mandatory retirement age will be reviewed.
Norma Mansor of Universiti Malaya said Malaysia's transition into an ageing nation necessitates increasing the retirement age.
However, she said the government should provide enough support and engagement for businesses to ensure they have adequate time to adapt to these changes.
'I would not suggest that it is increased straight away from 60 to 65. It should be done gradually from 60 to 62 or 63. Then, wait a few years before it is raised again.
'You have to give signals to the economy that this is going to happen so that the industry can prepare itself and manage this transition,' she told FMT.
Tabling the 13th Malaysia Plan on Thursday, Prime Minister Anwar Ibrahim said the government will review the retirement age, which is currently 60, for both the public and private sectors.
Norma cited a study by the International Monetary Fund published this year, which showed that the cognitive abilities of a 70-year-old in 2022 equalled that of a 53-year-old in 2000 among countries that form part of the Organisation for Economic Cooperation and Development (OECD).
She said the increased standard of living in the country allows people to work longer years. 'As long as you are healthy, physically and mentally, you should still be able to contribute to the productive economy.'
Norma also said young workers will not be crowded out by older employees, as the current youth unemployment trend is because of the mismatch of graduates and demand from the labour market.
She said the experience and institutional memory of senior employees will allow an organisation to become more productive, which will enable additional workers to be hired, especially young workers.
'A company can promote younger workers without releasing its older workers. They can do that by re-designating jobs, positions, and authority,' she said.
Opportunity for greater knowledge transfer
National Organisation of Skilled Workers president Rizan Hassan said retaining older employees will address staffing shortages and allow for greater knowledge transfer between the older and younger generation of workers.
'We support policies that strengthen the economy and acknowledge the contribution of senior employees, but the youths must not be excluded from career paths and strategic opportunities in the labour market,' he said.
Bottleneck effect?
Muda acting president Amira Aisya Abdul Aziz warned that delaying the retirement of older workers will create bottlenecks, especially in sectors with rigid structures.
'That risk is real, especially if the ecosystem isn't prepared to expand inclusively', she said.
She said the government should look at equitable wages and adequate retirement schemes for older workers, rather than just increasing the retirement age.
Amira also said the lack of structural changes will result in older workers being trapped in a low-wage cycle and exploited by their employers, who want to avoid paying competitive wages.
'The bigger picture should be the question of how they are being forced to work for extra years in order to survive,' she said.
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