Press statement by Teresa Kok, DAP National Organising Secretary and MP for Seputeh in Kuala Lumpur on 16 December 2011
Ministry of Human Resource’s proposed bill to raise the retirement age in the private sector to 60 years will reduce job opportunities for Malaysia’s young population
The Minister of Human Resource Dr S Subramaniam should hold more public consultation with the trade unions and the private sector on his bill to raise the retirement age in the private sector from 55 to 60 years before tabling it during the next Dewan Rakyat sitting, as was reported by Bernama yesterday. (Source: Bill To Raise Retirement In Private Sector Still Being Discussed http://www.bernama.com/bernama/v5/newsindex.php?id=634549 )
This bill, should it pass, would have huge ramifications to the interest of workers and corporations, as well as to the Malaysian economy. My position is that this bill will cause more harm than good in these respects.
Firstly, the autonomy of current workers in the private sector must be respected. They should have the right to decide whether or not they want to retire at age 55 as per their existing employment agreement, or to extend their service beyond that. The law should not force them to work until 60 if they choose not to.
Secondly, the private sector itself should have the discretion to decide whether or not to extend the retirement age of their worker from 55 to 60. Furthermore, it is common for private companies to offer valuable workers who reach retirement age an extension to their contract, rendering the proposed bill unnecessary.
Thirdly, Malaysia has a very young population. Malaysia is not an aging society like Japan. According to the 2010 Census, 50% of Malaysia’s population is 25 years old and under. With time, these 50% will be done with school, become adults and will need jobs to feed themselves and their family. If current workers who reach 55 years of age do not retire, the number of job opportunities available to young Malaysians will be reduced making it more difficult for them to find work, be promoted, and to feed their families.
I urge Dr S Subramaniam to not rush this bill through the Dewan Rakyat, but to hold more public dialogue beforehand so that the interests of all stakeholders, in both the short and long term, are preserved.
Teresa Kok
why is there a need to increase the retirement age? why not give other people a chance?
Raising the retirement age by five more years will surely be a relief and will help a lot for the cash srapped EPF.EPF the cash cow of the GOM have been stripped down to its bare skin.Giving out loans to the GOM,GLC’s and some preferred individuals,cronies of the Umnoputras without any collaterals.And taking over and bailing out loosing concerns of Umnoputras,have left the EPF a crippled,wounded animal waiting to be put away to eased its pain.
The Minister of Human Resource said the retirement age in the private sector was at the discretion of employers, and not governed by any laws.
Dear Teresa,
I refer specifically to your statement which reads – “If current workers who reach 55 years of age do not retire, the number of job opportunities available to young Malaysians will be reduced making it more difficult for them to find work, be promoted, and to feed their families.”
To put it mildly, I am shocked by your reason for wanting to maintain the retirement age at 55 years. Your above statement effectively suggests that a good way of creating jobs for new job seekers is to retire off existing workers. Apparently you cannot see that such method of ‘job creation’ for new job seekers DOES NOT INCREASE THE TOTAL NUMBER OF GAINFULLY EMPLOYED PEOPLE. For every new entrant to the workforce, one previous fit, healthy and productive worker gets put to pasture.
In 1957, life expectancy in Malaya was 56 years. I believe 55 years was already the retirement age at that time. This means that on average, someone who retired at 55 years old was expected to live another year before dying. In fact, until the 60s (when I starting working) it was still quite common for me to hear older people talking of someone “dying in harness”, which means dying while still employed. Today, when was the last time you or anyone hear such an expression?
Today, our life expectancy has increased to almost 74 years, 72 for men and 77 for women. Life expectancy is still going up. Do you really think people should still retire at 55 and spend the next 20 years in pasture? Or perhaps you think that after retirement at 55, such retirees can enter politics full time? After all, I see that many full-time politicians are still active well into their 60s and 70s. Shouldn’t you also suggest that people over 55 years cannot stand for elections to be MPs or ADUNs or to be appointed a local government councillors?
In 1957, someone who retired at 55 would most likely be grand-parents whose children were already all grown up and financially stable and independent, and even capable of helping their retired parents financially. Today, due to late marriage and postponement of child bearing, many 55 year olds could still be supporting university going children or with children who are just starting their own careers and still living with their parents, and possibly even partially dependent on their parents financially. Many such 55 year olds not only want to continue working, but they actually need to continue working to earn a still-needed income.
Coming back to your statement that “If current workers who reach 55 years of age do not retire, the number of job opportunities available to young Malaysians will be reduced making it more difficult for them to find work”, I would also like to point out to you that such a belief is a fallacy. Many economists will tell you that these 55 year olds who continue to be gainfully employed are going to have a disposable income which they will surely spend. Their act of spending their disposable income will by itself create new job opportunities.
Please take note of the word “new” before the words “job opportunities”. “New job opportunities” add to the total number of jobs in the market. Such job opportunities are unlike the job opportunities created by retiring off fit and healthy workers at 55 years which don’t add to the total number of jobs in the market.
Instead of opposing outright the raising of retirement age from 55 to 60, why not propose that the bill makes allowance for those minority existing workers who don’t want to work beyond 55 years according to the existing employment agreement. By the way, in case you think that the majority of workers will opt not to work till 60 years, then I believe you are out of touch.
I also think that your assertion that “the private sector itself should have the discretion to decide whether or not to extend the retirement age of their worker from 55 to 60” is totally irrelevant to the question of whether the retirement age for Malaysian should be 55 or 60 years. To me, the relevant factors are whether workers aged 55 years who are still mentally and physically fit, willing and wanting to continue to work, still needing an income for whatever reasons, and still capable of being productive to their employers should be put to pasture.
As for those comments regarding EPF money being used for benefit of BN cronies, they are totally and absolutely irrelevant. Without proper controls and good governance, irrespective of whether the retirement age is 50 or 100, EPF money will still be used for improper purposes. People should not allow irrelevant issues to cloud the real issue.
Teresa, I think Ong has raised some very pertinent points regarding the retirement age of our workers.
In these hard-to-make-ends-meet days, workers should have a choice of remaining in the saddle if they chose to do so.
Also, unlike the close knit families of yore, nowadays, it’s more a case of everybody for himself/herself.
It will not be surprising that if a survey is taken, it will show that many senior citizens will be having financial problems.
In fact, more should be done to enable the seniors to be as independent as possible.