Source: https://static.businessinsider.my/sites/3/2018/06/Malaysia-Prime-Minister-Dr-Mahathir-Mohamad-Putrjaya-Reuters.jpg

“Retiring at 60 is good enough”: M’sian Prime Minister Mahathir Mohamad on retaining current retirement age

The Malaysian government will retain the country’s statutory retirement age of 60 in a bid to prevent the younger generation from being unable to make a breakthrough in their careers as a result of older workers staying longer in the workforce.

Bernama reported Prime Minister Mahathir Mohamad as saying at a joint media conference in Phnom Penh on Tue (3 Sep) that the proposal to raise the retirement age to 65 is therefore unnecessary, as “the deadwood will be sitting on their chairs and others will not be able to sit there (via promotion)”.

“To me, retiring at 60 is good enough,” he said, adding that during his first premiership, the government “extended the retirement age from 55 to 56”. The retirement age was then raised to 58 during Abdullah Badawi’s tenure, and was raised to 60 during Najib Razak’s time as Prime Minister.

“Don’t say that the prime minister is 94 and has yet to retire himself. Mine is not a case of not retiring, but being asked to come back to work,” said Mahathir.

Last month, the Malaysian Trade Union Congress (MTUC) urged the government to raise the mandatory retirement age to 65 years, as practised in several developed countries including neighbouring Singapore.

Youth and Sports Minister Syed Saddiq Syed Abdul Rahman, however, opposed the proposal, as he argued that further raising the retirement age will block employment opportunities for the younger generation in Malaysia.

S’pore govt to raise retirement and re-employment ages up to 65 and 70 respectively by 2030

Meanwhile, Singapore will raise the ages of retirement and re-employment for Singaporeans up to 65 and 70 respectively by 2030, according to Prime Minister Lee Hsien Loong.

Speaking at the National Day Rally at ITE College Central in Ang Mo Kio last month, Lee said that the age thresholds will be gradually raised – the retirement age will be raised from the present 62 to 63 in 2022, before being lifted to 65 by 2030.

The re-employment age, he added, will be increased from the current 67 to 68 in around three years from now, and will “eventually” be raised to 70 by 2030.

Calling it a “sensible” proposal, Mr Lee said that the decision was made following meetings with the Tripartite Workgroup for Older Workers, a workgroup set up by the Ministry of Manpower (MOM), in a bid to “support older workers and the businesses that employ them”.

“Last year, the Ministry of Manpower, MOM, set up a Tripartite Workgroup on Older Workers to study the issue. I met the Workgroup members last month for lunch. They told me they had had intense discussions. Even at lunch, the discussion was quite intense. Why? Older workers wanted to be certain of continued employment for longer. When can I retire later? Can I be reemployed longer? Can I be reemployed more years at a time?

“But employers were worried about business costs and the uncertain economic outlook, and they said “I support you, I understand your aspirations, but I need more flexibility. Because I do not know what will happen. If I go broke, your job is gone too.” In the end the Workgroup reached consensus,” he said.

“Most seniors in fact do not want to stop working,” he said, adding that the changes introduced by the Government “will support older workers to continue working longer and to be more financially independent”.

Lee assured that the Government will “implement a support package” for elderly Singaporeans returning to the workforce, which will be announced by Deputy Prime Minister and Finance Minister Heng Swee Keat in next year’s Budget.

“As a major employer ourselves, the Government will take the lead for public officers. The Public Service will raise its retirement and re-employment ages one year earlier – in 2021 instead of 2022,” he said, while calling upon private sector companies that are able to do the same to do so too.

Lee also said that the Government will increase CPF contribution rates for older workers starting 2021, and will not amend the current CPF withdrawal policies or minimum age threshold.

“Today, CPF contribution rates for workers begin to taper down after the workers turn 55. We will raise the rates for workers above 55. We will take the first step in 2021. And we will take subsequent steps after that.

“The whole process will take 10 years or so, about there, but it depends on economic conditions. By the time we are done, those 60 and below will enjoy the full CPF rates. The CPF rates will only begin to taper down after 60, and level off after 70. So this is the first change – to increase CPF for older workers gradually over the next 10 years or so.

“To be absolutely clear: we are not making any changes to CPF withdrawal policies or CPF withdrawal ages. You can still take out some money at age 55. And you can still start your CPF payouts from age 65. All that remains exactly the same. So please ignore any rumours you may hear about this, or messages on WhatsApp, because they are fake news!” said Lee.

The Institute of Policy Studies recently released a report calling for CPF contribution rate for older workers starting from ages 55 to be restored from 26 per cent to the same levels as younger workers at 37 per cent. The current CPF contribution rate for workers aged 60 to 65 is 16.5 per cent, while the rate for those older than 65 is 12.5 per cent. The report’s suggestion includes increasing those to 37 per cent as well.

When asked if such proposals to increase the CPF contribution rates are feasible through negotiations and discussions, NTUC Secretary-General Ng Chee Meng in an interview with CNA938 the same month simply noted that the CPF rates are a subtopic for the tripartite work group and that there would be a formal report “sometime soon”.

Manpower Minister Josephine Teo said in Jun this year in relation to raising the ages of retirement and re-employment that she was “encouraged” by statistics on rising life expectancy among Singaporeans.

Citing a Lianhe Zaobao report, which noted that the healthy life expectancy of Singaporeans rose 7.2 years to 74.2 years in the last 27 years, while life expectancy rose 8.7 years to 84.8 years, Teo said that the statistics indicate that Singaporeans are generally in “good health”.

“People living longer and generally healthier lives is a key reason that they work longer – this is a trend that we observed across many developed countries,” she added.

The retirement age was last raised in 1999 from 60 to 62, while the re-employment age was raised from 65 to 67 two years ago.