29 August 2007

Retirement age maybe revised to 60


PUTRAJAYA: The retirement age for employees in the public sector may be extended by several more years.

An announcement on this is expected to be made by Prime Minister Datuk Seri Abdullah Ahmad Badawi, who is also Finance Minister, when he tables Budget 2008 in parliament on Sept 7.

Public Service Department corporate communications head Hasniah Rashid confirmed that a recommendation to extend the retirement age for the more than 1.2 million civil servants had been submitted to the government.

She declined to comment on the recommended age except to say it was beyond the current 56. However, it is understood that it could be around 60 years.

Singapore, for instance, has raised its retirement age from 60 in 1993 to 62 in 1999, and is already re-thinking its employment policies. It may again raise the retirement age of its workers.
"The PSD has studied various international practices and our recommendation is based on what is suitable and relevant for Malaysia," Hasniah said.

She added that the PSD, in drafting the recommendation, had taken into consideration the issues of productivity, international practices and government expenditure.

The government spends some RM6 billion annually in payouts, which include gratuity, to an average of 1,000 civil servants who retire every year. This is besides the monthly pensions being paid to pensioners.

At present, a public sector employee is required to retire on reaching the age of 56, based on the date of birth recorded in the service record book. However, the retirement age for those appointed before Oct 1, 2001, is either 55 or 56 years, depending on the option made under the Service Circular No. 3/2001.

Only judges retire at the age of 65.

Government servants can also apply for optional retirement on or after attaining the age of 40, provided they have not less than 10 years reckonable service.

Meanwhile, Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Omar Osman said if the retirement age was raised it would greatly benefit civil servants.

He said Cuepacs had in 1998 asked that the then retirement age of 55, be extended to between 58 and 60 years.

"Our members are still productive at 56 and the knowledge they have accumulated over the years would go to waste if they had to retire.

"We should also bear in mind that with the trend of people marrying late, their children would still be in secondary school when they retire.

"This would be taxing on them financially once their children go to college, but it would help if their service is extended for several more years."

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