JOHOR BARU: The proposal to raise the national retirement age, prompted by concerns over insufficient basic retirement savings, requires more comprehensive studies and data.
Universiti Tun Hussein Onn Malaysia (UTHM) Leadership and Competency Centre Director, Professor Dr Nor Hazana Abdullah, warned that increasing the retirement age without thorough research and data could lead to social repercussions and ultimately harm the well-being of the majority.
She criticised suggestions for Malaysia to emulate developed countries that have raised their retirement age to 69, calling them oversimplified conclusions to address the insufficiency of retirement savings among citizens.
"We cannot view this issue literally and conclude that Malaysians lack sufficient retirement savings, so the retirement age must be raised to ensure their savings increase and become adequate for their golden years," she said.
"If the issue is insufficient retirement savings, will extending the retirement age ensure that citizens have enough? Especially when such decisions are made without robust data, research, and simulations that consider inflation rates and current income levels," she told Berita Harian.
Last Thursday, it was reported that the benchmark for basic retirement savings would increase to RM390,000 by Jan 1, 2028, up from the current RM240,000, under the Employees Provident Fund's (EPF) Retirement Income Adequacy (RIA) framework.
This new benchmark was announced during the launch of the Belanjawanku 2024/2025 guide and the RIA framework by EPF.
To facilitate a phased implementation, EPF stated that the basic savings benchmark would increase incrementally by RM50,000 annually over three years, reaching RM290,000 Jan 1, 2026, RM340,000 by Jan 1, 2027, and RM390,000 by Jan 1, 2028.
Meanwhile, Singapore's National Trades Union Congress (NTUC) recently announced plans to raise its retirement age to 64, with the option to extend to 69 for eligible workers starting Jan 1, 2025. This adjustment, announced on Dec 9, will take effect 1.5 years earlier than initially planned.
In Malaysia, the retirement age has been adjusted three times in the past two decades. It was raised from 55 to 56 in 2001 for civil servants, increased to 58 in 2008, and extended to 60 in 2012.
Nor Hazana stressed on the need for a detailed study on how raising the retirement age might affect the country's youth.
She explained that some developed countries, such as Singapore and France, raised their retirement age due to labour shortages caused by a larger retiree population compared to the working-age demographic.
"Malaysia cannot simply replicate the policies of other nations, as each country faces its own unique challenges and circumstances.
"In Singapore, for example, not only do they have more retirees than active workers, but their longer life expectancy is supported by advanced healthcare and public services.
"More importantly, we need research to determine why a significant portion of Malaysians still struggle with insufficient wages and income, which hinder their ability to save adequately in the face of rising living costs," she added.