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The Star I 17 March 2012

Prospects for retireesMost agree theyneed to extendworking age toget higherretirementsavingsBy EUGENE MAHALINGAMeugeniczOthestar.corn.rny

W ITH Malaysia in the finalstages of drafting a new lawto increase the retirement

age in the private sector from 55 to60, retirees can look forward to theopportunity of working longer andearning more money.

Despite some mixed views onthis, it is not difficult to see whythere is a need to prolong the legalworking age. In Singapore, theretirement age is set at 62, withcountries such as Thailand, Bruneiand Indonesia already observing 60years as the official retirement age.

In a survey of 3,485 job seekersaged between 18 and 41 conductedby online recruitment companyJobStreet.com in October last year,it was revealed that some 84%agreed with the retirement ageextension because they felt theyneeded to work till they are olderto get higher retirement savingsdue to the increase in life expect-ancy.

"With the average life expect-ancy of Malaysians at 74 yearsold, the average retiree will needsufficient cash to sustain themfor at least 20 years," an industryobserver says.

According to data by theEmployees Provident Fund (EPF),about 73% of retirees have less thanRM50,000 in their savings whileonly 17% have over RM100,000.

A 2003 survey by the EPF alsorevealed that 14% of its membersused up all of their savings fromEPF three years into retirementwhile another 70% used up theirsavings within 10 years.

Furthermore, according toreports, up to 99.9% of the contrib-utors withdrew their EPF savings ina lump sum once they reached theage of 55.

Federation of MalaysianConsumers Associations presidentDatuk N. Marimuthu says with •many Malaysians today marryingat a later age, it is necessary toincrease the retirement age.

"Many people marry and havechildren late in their lives. Whenthey retire, their children are stillyoung and they still need moneyto finance their children," he says,adding that increasing the retire-ment age to 60 years is "practical".

Not too old to work?AS Malaysia moves towards

being an ageing society by 2030,with 15% of the population aged 60and above, Malaysian EmployersFederation (MEF) executive direc-tor Shamsuddin Bardan says therewill be a need to "properly manageand utilise the older employees".

Malaysian Institute of HumanResource Management honorarygeneral secretary J. Aresandiransays that with the local economyon a steady growth trajectory, thecountry cannot risk "too many peo-ple retiring".

"There are many companiestoday that are having problemsfilling up their mid-management-level posts and are suffering. If they

have the relevant skill, you shouldretain these people (retirees) orbring them back (if they haveretired)," he says.

But will extending the retire-ment age means more job opportu-nities for the elderly?

"One needs to take into consid-eration the younger generationthat is coming into the workforce,many of whom are able to takeon jobs that are more physicallydemanding," says one industryobserver.

Abdullah Busu Hanifah, formerchairman of the IncorporatedSociety of Planters, says it is a goodidea to bring back skilled retirees.

"This is especially for profession-als. If they have the skills, why not(bring them back)?"

Abdullah Busu notes that theplantation industry is facing ashortage of "competent people."

"Many of the planters weretrained from the pre-World War2 era. It's a hands-on job, set in arural area and we don't get manypeople from the newer generationcoming into this line," he says.

Shamsuddin, however, believesthat the issue of dealing withphysically-demanding jobs can be"compensated".

"The older employees can offerhigher skills and a wealth ofexperience and these attributeswill compensate for the expectedlower physical strength. There is,therefore, a critical need for thecountry to set up the appropriatepolicy on the employment of olderemployees.

"The younger employees mayresent the move to increase theexisting retirement age. However,it is critical that we review ourexisting retirement age and withproper implementation such movewould not be to the disadvantageof the younger workers," he says.

Shamsuddin, however, admitsthat older employees are moresuitable to perform works that arenot physically demanding.

"With use of some simplemachines, older employees may be

able to perform works deemed tobe heavy. MEF is of the view thatretirees from sectors that requireheavy manual work such as planta-tion and construction should beretrained so that they may be ableto take up jobs in other sectorsafter their retirement."

Aresandiran observes thereare still many people in their 50sand 60s who still take on heavyjobs. However, he says physicallydemanding work should be givento younger and more able-bodiedindividuals.

"It's up to the company. Theydon't necessarily have to give the

tough jobs to the elderly people.These kind of skills can be passedon to the younger generation."

Abdullah Busu concurs thatretirees don't necessarily have toretain their old positions.

"The retirees could be brought into take on a consultancy or trainingposition and pass on their knowl-edge to the younger employees,"he says.

On another note, Shamsuddinfeels that increasing the retirementage will not increase the levelof competitiveness of the localworkforce, especially among theyounger generation.

"We are relying too heavily onforeign workers. Thus, it is impor-tant for Malaysia to relook its man-power utilisation so as to ensurethat the available human resourcesare utilised in an optimal way.

"Increasing the retirement ageper say would not increase ourcompetitiveness. However, withappropriate skills and up skillingof our entire workforce, labourproductivity will be increased, andthus, our competitiveness will beenhanced," he says.

Retirement age anon-issue?

For many people who choose tocontinue working past retirementage, the age limit is not necessarilyan issue.

"If you're enterprising enough,you could work from home or evenstart your own business," saysJanice Tam, a retired school teacherwho now provides tuition classesfor primary school kids.

"I think it's a good move toincrease the retirement age, giventhe high cost of living these days.But I feel it's better to become yourown boss as it provides more flex-ibility. You can work at your ownpace and avoid the hassle of travel-ling to the office and back."

Tam says many retirees todayview retirement not as an end, butrather, a new and exciting phasein their lives. She also says that"being your own boss" offers betterfinancial prospects.

"If you work for an employer,your income would likely be fixed.If I worked for an organisation andtaught their kindergarten children,for instance, my salary wouldremain the same, regardless of thesize of the classroom.

"But by giving tuition classes onmy own, I earn more as my pupilsincrease. Of course, working for anemployer is less risky," she says.

G. Murthy, 58, says having a longworking career can provide retireeswith the confidence and knowledgeto launch a business of their own.Having served with the armed forc-es for a number of years, he nowheads his own security firm.

"My time with the armed forceshas given me the experience andconfidence I need to set up myown business," he says.

But a post-retirement job neednot be inspired from a previousworking experience. Sometimes,running a well-run family busi-ness is all you need to secure yourfinancial position going into your"golden years."

Rashid Abu Bakar, 69, used tohelp his mother sell nasi lemakwhen he was growing up. Afterretiring from government service,he is continuing the business withanother family member.

"It provides a decent side incomein addition to the pension that I getevery month," Rashid says, add-ing that he enjoys doing it after allthese years.

"I think the most importantthing is to enjoy what you'redoing," he says.

Separately, part-time collegetutor Rashid Ali says retireesshould constantly upgrade theirskills to remain "marketable."

"It can be a huge sacrifice, butif it means boosting your incomeprospects, then why not," he says.