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Malaysia’s rising life expectancy, now at around 78 years, has renewed calls for the country’s mandatory retirement age of 60 to be reviewed and potentially raised.
Former Employees Provident Fund (EPF) chief executive officer Tan Sri Shahril Ridza Ridzuan said Malaysians were increasingly willing and able to remain economically active beyond 60, making it necessary to consider more flexible retirement arrangements.
“This is something that really needs to be reviewed. The reality is that many Malaysians will continue working. When we reach 55 or 60, we still want to work,” Shahril, who is now Axiata Group Bhd chairman, was quoted as saying by NST.
He said flexible arrangements, including part-time employment, could allow older Malaysians to remain productive.
“Whether it is one or four (days) of part-time work, or perhaps through the economy, we should encourage people to remain productive,” he added.
MTUC Backs Higher Retirement Age
Shahril said remaining active after retirement could also benefit retirees’ mental and physical wellbeing.
His call was supported by Malaysian Trades Union Congress (MTUC) president Datuk Abdul Halim Mansor, who said the union had proposed raising the retirement age for private-sector workers to 65 in 2018.
Halim said the proposal was not accepted at the time partly due to concerns that a higher retirement age could reduce employment opportunities for younger workers.
However, he argued that Malaysia’s continued reliance on more than three million foreign workers meant such concerns should be reassessed.
He said raising the retirement age to 65 would allow workers to continue contributing to the EPF and benefit from employment protections while potentially increasing their retirement savings.
“The retirement age should be formally amended under the Minimum Retirement Age Act 2012,” he said.
MEF Calls For Flexible Approach
However, Malaysian Employers Federation (MEF) senior adviser Datuk Syed Hussain Syed Husman said a blanket increase may not be the best approach.
He said some retirees already continued working through post-retirement contracts, consultancy arrangements or other flexible forms of employment.
“A one-size-fits-all approach to extending the retirement age may not work, as there are many other issues that need to be considered,” he said.
Meanwhile, Shahril also urged EPF members not to withdraw their retirement savings in a lump sum if they did not immediately need the money.
He said leaving the funds with EPF would allow them to continue earning dividends, while members could make phased withdrawals during retirement.
However, he acknowledged that some retirees needed their savings to settle housing loans and other financial commitments.
Malaysia is expected to be an aged nation by 2048.
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