Bosses group says ‘not right time’ to raise retirement age
Malaysian Employers Federation says about one million job opportunities were lost when the retirement age was raised from 55 to 60 in 2013.
PETALING JAYA: The country’s largest employers group has downplayed the need to emulate commercial banks in raising the mandatory retirement age to 61.
The Malaysian Employers Federation, which represents over 5,000 businesses, said it was not the right time to raise the retirement age given the current unemployment rate.
“The increase in the retirement age from 55 years to 60 years in July 2013 resulted in the loss of approximately one million job opportunities for new graduates and new entrants into the labour market,” said MEF president Syed Hussain Syed Husman.
As of March, the unemployment rate stood at 3.5% with some 588,700 people unemployed. The youth unemployment rate for ages 15 to 24 was 11.2% or 317,300 people.
Syed Hussain said employees over the age of 60 can still be offered fixed-term contracts if they wanted to continue working.
“Employment over the age of 60 must be based on the mutual agreement between employee and employer,” he told FMT.
“It will greatly depend on the employee’s performance, medical condition, discipline and productivity.”
Last week, it was reported that commercial bank staff can now retire after turning 61, a year older than most other workers in the country.
The increase in the retirement age was requested by the National Union of Bank Employees as a way to boost the retirement savings of workers in the B40 (lower-income) and M40 (middle-income) groups.
Malaysian Trades Union Congress president Effendy Abdul Ghani said although he understood NUBE’s rationale for seeking a higher retirement age, he did not believe this would solve the problems faced by employees.
“For MTUC, it’s not about raising the retirement age to increase EPF savings, it’s more about income.
“Our minimum wage should be revised to become a progressive wage. So extending the retirement age is not a good proposal. Restructuring wages is the best thing to do because it will increase your EPF savings,” he said.
Earlier this month, economy minister Rafizi Ramli said the government was studying the possibility of introducing a progressive wage policy.
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