Monday June 18, 2012

Raising retirement age is beneficial

MALAYSIA is expected to attain Ageing Nation Status by 2035 with an increase in life expectancy due to better healthcare and improved standards of living. An ageing nation is one where 15% or more of the country’s population are aged 60 and above.

The average lifespan of Malaysians has increased, with males living up to 75 years, and females 77 years. This means that a retiree aged 55 has to support himself for another 20 years or more.

The Government’s decision to table the Minimum Retirement Age Bill in Parliament to raise the minimum retirement age for private sector workers to 60 is indeed eagerly awaited. It is a step in the right direction and is in tandem with the raising of the retirement age for the public sector to 60.

Looking at the public response so far, there is no doubt that the proposal has received a resounding endorsement.

But both employers and employees should understand how the proposed new minimum retirement age law will affect them. The new law will set a mandatory age limit where an employee cannot be retired by his/her employer before the employee turns the prescribed age. However, if the employee chooses to retire before the minimum age, he/she has every right to do so if allowed by his or her contract.

Unless promotion is based on seniority alone, the fear that older workers will deprive the young people of jobs is unfounded. Younger workers may have the paper qualifications but that does not mean they have the experience, wisdom, skills or even aptitude for the job. Promotions are based on merit and often those who deserve the promotion will get it regardless of their age group.

The labour force market survey conducted by the Statistics Department indicated that up to January this year, about 12.82 million people were in the workforce and that 385,600 were jobless.

It was reported recently that there are a million jobs available in the country, while 12% of workers job hop every year. In addition, the number of foreign workers in the country is estimated to be around 2.04 million. These figures show that there are jobs in our market and more new job opportunities will be created under the six economic growth corridors.

The young have numerous avenues to explore in the job market. Good workers will be accepted anywhere but only the mediocre ones will be waiting for the older managers to retire so that they can take their place.

Our younger workers should make themselves ready to venture into different job market overseas as Asean has plans to move to a free regional labour market much like the European Union starting in 2015.

Under the Asean Economic Community framework, Asean members have agreed to pilot a free labour market plan by allowing specialists and professionals in several fields – medicine, dentistry, nursing, engineering, architecture, natural resources and geographical exploration, and accounting – to work anywhere they like across the region in 2015.

This means our younger workers may require a different set of skills compared to the older workers given the highly competitive nature of the regional job market and job mobility.

Retention of older workers can help maintain corporate skills and save employers the cost of “re-inventing the wheel”. Young people have a tendency to job hop and quit their jobs for greener pastures. However, workers aged over 55 are five times less likely to change jobs compared with workers aged 20 to 24, reducing ongoing recruitment and training costs.

TAN SRI LEE LAM THYE,

Trustee,

1 Malaysia Foundation.

News

Monday June 18, 2012

Raising retirement age is beneficial