PETALING JAYA: The country’s biggest employers’ group has welcomed the government’s rejection of a proposal to extend the retirement age to 65 as it would have serious financial implications on companies.
The Malaysian Employers Federation (MEF) said workers above 60 were more prone to health issues and this meant that companies would have to fork out more for medical insurance and payments.
MEF executive director Shamsuddin Bardann said that in more physically demanding jobs such as working on heavy industry and construction sites, the risk of sustaining injuries was higher.
In the event of accidents, he said, employers would have to pay more for higher medical costs.
“We are thankful for the prime minister’s understanding of the issues faced by employers.
“Employers find it a relief that the mandatory retiring age won’t be set at 65,” he said.
Dr Mahathir Mohamad had said earlier this week that there was no need to increase the mandatory retirement age from 60 to 65.
He said he agreed with Youth and Sports Minister Syed Saddiq Syed Abdul Rahman that the current retirement age should be retained so as not to block employment opportunities for the younger generation.
On concerns raised by the Malaysian Trades Union Congress (MTUC) that employees, even at 60, may not have sufficient savings in their Employees Provident Fund (EPF) accounts, Shamsuddin said the government should reconsider limiting withdrawals as “the EPF is a contribution fund for old age”.
“If a person withdraws money before reaching the statutory retirement age of 60, it will impact on the amount of savings he will eventually have,” he said.
Shamsuddin said that while he did not agree with a higher retirement age of 65, the government could introduce a re-employment scheme similar to the one in Singapore.
He also said companies could be given the option to voluntarily raise the retirement age for their staff.
Singapore’s plan is to raise the retirement age from 62 to 63 by 2022, then to 65 by 2030.
It has also raised the age of re-employment from 65 to 67 for older citizens to continue working and supporting themselves. Employers are required to offer re-employment to those who reach the statutory retirement age of 62.
This scheme is something that a former teacher, who wished to be known only as Ron, said Putrajaya should consider.
He said that despite the benefits he receives as a former government servant, “extra income would not hurt”.
Sarah, 60, who is currently working at Sunway, said she would continue to work so long as she can contribute.
“I want to spend my idle time working so I can earn money to travel and also to buy things for my grandchildren,” she said.
She said she would not have to touch her savings if she continues working because “savings are for rainy days”.
On giving opportunities to the younger generation, Sarah said: “Youths today are eager to climb up the corporate ladder and do not bother to develop soft skills.”
Ron, however, agrees that an increase in retirement age would mean fewer opportunities for promotion for youths.
“That’s why the youths are disagreeable to the proposal,” he said.