Former EPF chief calls for review of retirement age

Malaysia's retirement age is once again under discussion after former Employees Provident Fund (EPF) chief Tan Sri Shahril Ridza Ridzuan called for a review of the current policy. Shahril, who now heads Axiata Group Bhd, suggested that longer life expectancy and Malaysians' desire to remain economically active could warrant more flexible working arrangements beyond the age of 60, such as part-time work.

He argued that many Malaysians continue to work even after reaching 55 or 60, and thus, the retirement age should be reconsidered due to the increasing life expectancy, which has now reached 78 years. Shahril also emphasized the benefits of flexible working arrangements, stating that they could help older Malaysians remain economically active and productive, which is crucial for their mental and physical well-being.

The Malaysian Trades Union Congress (MTUC) supported Shahril's proposal, having previously suggested raising the retirement age for private-sector workers to 65 in 2018. The MTUC's president, Datuk Abdul Halim Mansor, explained that the government had declined to implement the proposal due to concerns about potential negative impacts on younger workers, such as reduced employment opportunities.

However, he argued that raising the retirement age could help increase EPF savings and shorten the retirement period, estimated at around 10 years based on an average life expectancy of 75 years. Halim also noted that workers who continued working would benefit from staying physically and mentally active. On the other hand, the Malaysian Employers Federation (MEF) took a more cautious stance, suggesting that a blanket increase in the retirement age might not be the right approach.

Instead, MEF senior adviser Datuk Syed Hussain Syed Husman argued that the decision should ultimately be an individual choice, as it depends on various factors and the willingness of both employers and employees to continue working beyond the traditional retirement age. Shahril recommended that retirees consider leaving their savings with EPF for potential phased withdrawals during their retirement years, rather than taking a full lump-sum withdrawal.

He acknowledged that some retirees might need lump-sum withdrawals to meet financial commitments, but emphasized the broader challenge of ensuring Malaysians accumulate sufficient savings during their working years to meet their retirement needs and other financial obligations.