Age is not a factor

The Star

By HARIATI AZIZAN

The retirement age in Indonesia, Singapore, Thailand and South Korea is 60 but in Malaysia, it is 56. By United Nations’ definition, an ‘older person’ is an individual aged 60 years and over, thereby making Malaysians retirees before they reach old age.

AT the age of 50, a country is considered young but if you are a worker, your tenure as an employee is almost up. In Malaysia, you would have up to six years before you are expected to retire.

With the Budget 2008 scheduled for tabling this Friday, many government workers are keeping their fingers crossed for the good news of an extension of the mandatory retirement age to 60 from the existing 56.

In fact, the Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Omar Osman has even labelled it as the best 50th Merdeka gift that could be granted for Malaysians.

Cuepacs has been fighting for an older retirement age for civil servants for more than a decade now, and had submitted a memorandum on the matter to the Government in 1998.

“It is too early to for one to retire at 56, especially now that the population enjoys a longer lifespan and better health care,” he had noted, adding that the time was right for the retirement age to be increased to 58 or 60 in view of the better health care, longer lifespan and higher cost of living in the country.

Citing the older retirement age in different countries in the region, Omar stressed that it was a sheer waste of human potential and capital to retire civil servants at 56.

“The retirement age in Indonesia, Singapore, Thailand and South Korea is 60 and above. Malaysia is relatively more advanced than some of its neighbours. But our workforce retires much earlier.”

According to a study of the perception of executive, managerial and supervisory personnel towards older workers conducted by Assoc Prof Dr Jariah Masud from the Universiti Putra Malaysia’s Gerontology Institute (GI), a majority of companies in the private sector use the cut-off age of 55 years (70%) and 56 years (10%) in accordance to the mandatory age of retirement practised in the government sector.

The institute’s director, Assoc Prof Dr Tengku Aizan Hamid, concurred, pointing out that contrary to common belief, there was actually no stipulation for retirement age in the Employment Act 1955.

“Not many people know this. It is very clear that the private sector is taking the Government’s lead in setting the retirement age for its workers, so we believe that if the Government makes a change in the retirement age, the rest will follow suit,” she said.

An ageing world

An older person is specified by the United Nations as an individual aged 60 years and over. GI acknowledged that Malaysia uses the UN’s cut-off age, which correlates with the Asean definition of the elderly.

Ironically, argued Dr Tengku Aizan, as the majority, if not all, Malaysians retire from the workforce at the age of 55-56, this means that Malaysians retire before they reach old age.

“An implication is that they have to wait for four to five years before they are entitled to the Old Age Persons’ benefits in the country, including medical benefits and other discounts or services,” she said.

This, she added, is not only a waste of Malaysia’s most valuable asset – manpower – but in the long run could also be a burden.

“If you calculate it, you can see how much the Government spends on pension and how much they would save if they shift the retirement age to 58 or 60.”

Last year, the Government paid out RM5bil in pensions while another RM6bil, which included gratuity payment, was disbursed to an average of 1,000 newly retired civil servants. This is estimated to reach RM30bil by 2020.

For the private sector, Malaysian Employers Federation (MEF) noted that some 80,000 workers retire every year.

AARP (formerly the American Association of Retired Persons) estimates that by 2050 there will be two billion older persons in the world, compared to 600 million today. Every month, approximately one million persons reach 60 years of age.

While the percentage of older persons is said to rise to 21% worldwide by 2050, up from 8% today, forecasts show that the percentage of children will decline from 33% today to 20%.

Malaysia is a relatively young country, but the number of older persons in Malaysia has doubled in the past two decades to almost 1.4 million. By 2020, this number is expected to grow to more than 3.4 million. According to a UN definition, Malaysia will be an aged society in 2019 when 7% of her total population is 65 years and older.

Valuable asset

Much has been reported in the press of how a majority of Malaysians are unprepared for retirement. According to another study by GI, more than 60.4% of those aged 60 years and above have a monthly income below RM500 a month while 5.7% have no income.

Their main source of income is contribution from children (see chart).

Technician Yeoh Yan Sun, 50, is one civil servant who is hoping for a retirement age extension. “All the recent media coverage of how retirees have not saved enough for retirement has made me nervous about my impending retirement. If the retirement age is extended, I have more time to prepare.”

Dr Tengku Aizan said the institute had shared its research findings with the Government, proposing an extension of the retirement age.

She strongly believes that fears of the move incurring a higher salary ceiling or depriving fresh graduates employment were unfounded.

“As for graduate unemployment, it is more complex and needs to be seen in totality as it involves different levels of skills. They are not competing for the same jobs as those near retirement have skills that can only be gained from experience while fresh graduates only have entry level skills,” she said.

She stressed that the main issue for government service is to develop a method to purge non-performers from the system.

“Currently, once you hire a person, that’s it; you are stuck with the person until his retirement. It’s difficult to get rid of deadwood. That is why the VSS (Voluntary Separation Scheme) for non-performers that was proposed recently might be a good idea,” she added.

To help the old help themselves, she proposed that the Government look into providing skills training for the elderly to help them meet the current needs of the employment market as well as to keep their minds and bodies agile.

She added that another measure is to implement flexi- or part-time hours and housebound work for the elderly to empower them to be financially independent.

Echoing this, MEF executive director Shamsuddin Bardan said it was a better alternative to implementing a blanket retirement age hike for the private sector.

“Most companies are extending the contract of good employers when they retire anyway. Imposing a higher retirement age will be a burden for the private sector, especially if they have to keep the deadwood on longer.”

He, however, stressed that it is important for the Government to legislate this.

“Employers are interested in hiring staff on flexi-hours but it will be better if it is legislated. At the moment, companies are doing it on an individual basis.

“Another measure is for the Government to reduce employers’ EPF contributions for retirees. It would encourage more employers to re-hire retirees and retain older workers.”

Survey: Older workers seen as valuable assets

The Star

By HARIATI AZIZAN

PETALING JAYA: Older workers are seen to be good workers – they have special skills, are trustworthy and good problem solvers.

A survey has revealed that many top local corporate personnel perceive those aged 50 and above as “valuable assets” and have a lot to contribute at the workplace.

More than 96.3% of respondents said workers aged 50 and above have special skills, 88.8% felt that they were trustworthy and reliable while 84.2% believed that they were good problem solvers.

The findings of this survey will be welcomed by most of the 1.3 million government workers who are awaiting news of a possible extension of the mandatory retirement age for civil servants, from 56 to 60, in Budget 2008 this Friday.

“Older workers, particularly those past retirement age, still have a lot to offer. With their skills and experience, it is a waste not to tap into them as a manpower resource for the job market,” said UPM's Gerontology Institute director Assoc Prof Dr Tengku Aizan Hamid.

She said the institute had shared its research findings with the Government a few years ago, proposing an extension of retirement age.

“The PM then, Tun Mahathir Mohamad, was receptive and had announced that they would review the retirement age, but nothing came out of it at the time,” she added.

However, in May it was reported that the Public Service Department had finally submitted another recommendation to the Cabinet for the retirement age to be extended beyond 56 after deliberating on the issue for several years. The Government extended the retirement age from 55 to 56 in 2001.

The Congress of Unions of Employees in the Public and Civil Services, which has been pushing for an extension of the retirement age since 1998, supports the move. Its president Omar Osman said it would benefit civil servants, particularly with the rising cost of living.

A recent study commissioned by Prudential Assurance Malaysia Berhad reveals that 67% of retirees' primary source of income was in the form of monetary aid from children while another 14% depended on part-time jobs.

The Prudential Retire-Meter 2007 survey involving 1,038 Malaysians from urban areas nationwide showed that more than one-third of retirees are thinking of returning to work for a stronger financial security, with 37% of retirees forced to return to the workforce as a result of dwindling savings.

Said Omar: “It is too early for one to retire at 56, especially now that the population has a longer lifespan. Malaysia is relatively more advanced than some of its neighbours but our workforce retires much earlier. It is a waste.”

Malaysian Employers Federation executive director Shamsuddin Bardan, however, said its members had decided not to extend the retirement age regardless of the Government's decision.

“We don't want a blanket ruling for all employers. It is better for the employer and employee to negotiate their contract for what is acceptable to both parties,” he said.

Assoc Prof Dr Jariah Masud, who led the UPM study, said the majority of private companies followed the mandatory retirement age for civil servants by using the cut-off age of 55 years (70%) and 56 years (10%).

Nevertheless, the study, conducted by a group of academics from the Gerontology Institute, found that the overall positive perception of the 134 survey participants towards older workers was encouraging.

Older workers were perceived as calm and thorough at work (80.6%) and mentally sharp (55.2%). Only a small number (37.4%) thought they were prone to illness.

Former top-level officer from the tax department Vincent Josef agreed that the Government was making a mistake in taking out its best workers in their prime.

“I think most people reach their peak at work at the age of 45, and from then to 60 they are at their most capable,” he said.

Society of Active Generation of Elders (Sage) president, retired teacher Chin Sek Ham, 67, said teaching was one profession that many retirees could contribute to with their experience and knowledge.

Retirement age maybe revised to 60

NSTP

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."

Retiring later is Cuepacs’ Merdeka wish

The Star

ALOR STAR: Increasing the retirement age to 58 or 60 years will be the best 50th Merdeka gift for Malaysians, said Cuepacs president Omar Osman.

He said Cuepacs hoped Prime Minister Datuk Seri Abdullah Ahmad Badawi would announce the good news in conjunction with Merdeka celebrations.

“If we want to achieve excellence and glory, we need to utilise our experienced and skilled people,” he said after opening the Kedah Cuepacs annual general meeting in Bukit Kayu Hitam yesterday.

Omar said the time was right in view of better healthcare, longer life span and higher cost of living.

“It is too early for one to retire at 56, especially now that the population enjoys a longer life span and better healthcare,” he said.

Omar said the retirement age in Indonesia, Singapore, Thailand and South Korea was 60 and above.

“Malaysia is relatively more advanced than some of its neighbours. But our workforce retire much earlier,” he said.

Cuepacs had asked for a later retirement age in a 1998 memorandum.

Retirement Age: Sheer waste of human potential

NST

By:Samuel Yesuiah

THANKS to the government for the pay rise for civil servants. It was indeed wonderful news for them.

It will definitely increase productivity in the delivery and services sector.

Before the announcement of the pay rise by the prime minister, Cuepacs made another proposal of extending the retirement age of all civil servants.

When the pay rise was announced, there was no mention of the extension of the retirement age.

In the euphoria of the excitement and celebration of the pay rise, the retirement age proposal was forgotten. Cuepacs, too, did not pursue this matter any further.
Has the government rejected the idea or is it still studying the proposal?

Many senior people have been looking forward eagerly for this decision so that they can continue working with the government till they are 60.

The life expectancy of Malaysians has risen to 75. It is a sheer waste of human potential and capital to retire them at 56.

I hope the prime minister will have another piece of good news with regard to the extension of the retirement age of civil servants during the budget report in September.

PSD’s retire at 60 proposal awaiting Cabinet nod

By M. KRISHNAMOORTHY

The Star

KUALA LUMPUR: The Public Service Department (PSD) has recommended to the Cabinet that the retirement age for civil servants be increased from 56 to 60.

PSD director-general Tan Sri Ismail Adam said senior officials had deliberated on the extension for several years and forwarded its proposal to the Government recently.

“Conditions and the mechanism for the extension would be finalised after approval from the Cabinet,” he said yesterday.

Early this year, the Prime Minister said the Government would study the proposal by the Association of Administrative and Diplomatic Service and Cuepacs to extend the retirement age beyond 56.

Cuepacs president Omar Osman said civil servants were looking forward to the announcement of their retirement age extension at the national Workers' Day celebrations to be held on May 21.

“In our meeting with PSD officials last week, they informed us that the proposal had been submitted for approval.

“We are expecting Datuk Seri Abdullah Ahmad Badawi to make an official statement on the retirement age during the celebrations.”

“The Government has viewed the proposal positively and we hope it will extend the mandatory retirement age of civil servants to 60, which we have been requesting for sometime now,” he said.