The Govt Should Extend the Retirement Age, Economists Say
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According to theSun, two economists believed that not only should the government extend the retirement age, it should also be granted across the board.
Avoid discrimination by including all sectors
When questioned about extending the retirement age to 65 in sectors lacking expertise, they issued a cautionary reaction.
Dr K. Kuperan Viswanathan, Universiti Utara Malaysia professor of economics, said that allowing only specific groups of professions or categories of workers to have the right to work longer than others can be deemed discriminatory.
He noted that a blanket extension would not cause any major disruption to the labour market, as the Malaysian Employers Federation said before. It would also relieve strain on the job market and enable highly skilled workers to continue contributing to national output.
Kuperan stated that since people are on average living longer with better health services and medicinal advancements, it is logical to extend the retirement age. He said that young people would be able to acquire jobs as long as the economy continues to grow at 6% or more every year.
He cited the Census report 2020, stating that the number of Malaysians over 60 years has reached over 10% of the population, another reason to expand the retirement age to 65. According to him, it is a sizeable number to be left out of the job market purely because of the institutionally-defined retirement age.
He added that most B20 and M40 workers do not have enough retirement savings, which could be a serious issue for those who do not have enough support from their children to look after them after retirement.
A steady increase in retirement age will allow for smoother changes
Dr Yeah Kim Leng, Sunway University professor of economics, said to minimise sector-based discrimination, social injustice, and implementation issues, the extension in retirement age should apply across all industries.
He said private-sector employers facing labour constraints, especially skilled workforce, are already rehiring staff who have reached the retirement age. The nature and terms of engagement differ according to individual company's needs, current labour market conditions and the employees' bargaining power.
Yeah added that a steady increase to 62 years and eventually 64 would allow smoother changes in individual work-life plans and the country's labour market.
According to him, corresponding strategies and initiatives to encourage job creation would enable Malaysia to maintain full employment. High foreign labour dependency, under-employment and a lower-than-desired female labour participation rate are the primary structural issues facing the job market that need to be addressed simultaneously with the need to raise the retirement age.
Yeah also added that with the increasingly ageing population and, more critically, inadequate retirement savings, it is imperative that the existing retirement age of 60 needs to be raised.
He said the challenge is to decide on the timing and the extension that will optimise Malaysia's social wellbeing and economic sustainability.
Addressing issues related to old age pensions
However, Dr Rajah Rasiah, Universiti Malaya Asia-Europe Institute professor of economics, said that while Malaysia's population has been slowing down substantially, its cooling is still relatively slower than in developed countries, while its state finances look significantly weaker than other countries.
He said that even though the government should increase the retirement age, it would have to address prior concerns linked with old-age pensions and the bloated civil service. He stated that the government should, for now, explore raising the retirement age of employees who fulfil high KPI requirements.
He said that the sector that the government could consider would be education, where teachers and academics with proven tacit knowledge, especially in delivering it in classrooms and in research labs, should be reviewed for an extension in retirement age.