Keep retirement age, but raise salaries, says Cuepacs president in call to prepare for ageing nation

SHAH ALAM – Malaysia will be reaching an ageing nation status by 2030, as confirmed by Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Datuk Dr Adnan Mat.

However, concerns have surfaced, including proposals to raise the retirement age from 60 to 65 to ensure financial stability for older workers.

Adnan denied the proposals, saying that it was more appropriate, given the country’s current socio-economic context, to maintain the retirement age at 60.

Instead, he called for a salary increase to help boost retirement savings.

He added that exceptions could be considered for critical sectors such as the judiciary and medical fields, where knowledge transfer has not yet taken place.

"We have changed the retirement age three times: in 2001 from 55 to 56, in 2008 from 56 to 58 and in 2011 from 58 to 60.

"There are suggestions to increase it to 65, on the grounds that savings need to be increased by another five years for Employee Provident Fund, so that it lasts until the age of 80. That suggestion was to add the duration for savings by another 60 months.

"We do not agree with the retirement age being increased," Adnan said when contacted during a Cuepacs event recently.

He said 60 was suitable at this moment and to ensure savings were enough, there needed to be a salary increase so that savings can be improved.

Therefore, he said there was no need to raise the retirement age to 65.

"More graduates need to be given the opportunity to work and fill vacant employment," he added.

He also stressed that certain service-based sectors such as the judiciary and medical experts could be exceptions.

He said these were experienced people and their knowledge has yet to be passed on to new workers. Then we agree for them to retire late like professors.

This group, he said deserved a later retirement age, but not for others.

Cuepacs believed that the retirement age of 60 was still relevant.

While some countries have raised their retirement age to 62 in some places, 65 in Switzerlandand by 2030, to 70, those were based on different cultures and circumstances.

In Malaysia, he said the local context and working environment supported keeping the retirement age at 60.

"As an ageing nation, in other words, an old country by 2030 — there is a need for people aged 60 and above to continue working, on the basis that they still have expertise to sustain or continue earning income into their older days.

"From Cuepacs’ perspective, as Malaysia moves towards becoming an ageing nation, people should be able to remain financially stable in their later years, with continued income without having to carry out physically demanding work.

"In public services, under Cuepacs, we have a retirement system that allows people in the later days of their service to retire happily, not broke or bankrupt," he said.

He added that the government had decided in June 2023 to abolish the pension scheme in the public sector and this was enforced by the authorities and the Cabinet on that date.

He said Cuepacs believed the decision could affect older individuals, pensioners and public sector workers in terms of their ability to sustain their livelihoods after retirement.

"Cuepacs found that the pension scheme is the best for us because it guarantees a pensioner is comfortable in their old days. But the government decided to abolish it. So in this context, we believe the government needs to apply the principle of ‘non-less-favourable’ with future employment in the public sector receiving no less than what pensioners get today," he said.

He said Cuepacs hoped private sector workers who continued working beyond retirement age will follow the safety and health regulations set by the Department of Occupational Safety and Health, to ensure they remained in a safe and comfortable work environment.

"In the private sector, employees are still seen as capable of working even after reaching retirement age, in line with the reality of an ageing population. This allows older workers to continue earning a living while remaining in a safe and comfortable work environment," he said.