Rising poor health, invalidity issues preventing Malaysians from working until retirement

Borneo Post

2 days ago

Datuk Seri Dr Mohammed Azman Aziz Mohammed
KUALA LUMPUR (July 24): As discussions reignite over Malaysia's proposal to raise the retirement age to 65, the Social Security Organisation (Perkeso) has warned that the reality on the ground tells a different story, with many Malaysians unable to work until retirement due to poor health and rising invalidity cases.
Perkeso group chief executive officer Datuk Seri Dr Mohammed Azman Aziz Mohammed said while the proposal to extend the retirement age may appear logical in the context of Malaysians' longer lifespans, the data shows many workers are being forced to exit the workforce far earlier due to non-communicable diseases and other health conditions.
'Retirement is no longer a guarantee in Malaysia. For many, it has become a privilege they may never reach,' Dr Azman said in a statement.
Perkeso data shows invalidity claims have surged by over 160 per cent in the last decade. In 2023 alone, more than 52 out of every 10,000 active workers filed for invalidity, with the average applicant being just 45 years old — far younger than the current retirement age.
'What is more alarming is that 85 per cent of invalidity cases paid in December 2024 were due to non-communicable diseases such as diabetes, cardiovascular disease, kidney failure, and strokes,' Dr Azman said, noting these conditions reflect years of strain, lack of preventive care, and insufficient early intervention.
He opined the idea of simply raising the retirement age without addressing systemic health and income security issues is inadequate, describing it as 'building a bridge for the lucky few while leaving everyone else to swim across'.
The CEO also pointed out the limitations of Malaysia's current retirement system, which remains heavily reliant on a defined contribution model through the Employees Provident Fund (EPF). The system leaves many at risk, particularly those who are unable to continue working due to health conditions.
'Nearly 75 per cent of EPF members aged 54 have less than RM250,000 in their accounts, translating into a retirement income of less than RM1,050 per month, which is below the national poverty line,' he said.
Health-related EPF withdrawals have also increased by 41 per cent since 2015, with over RM93 million withdrawn due to incapacitation in 2023 alone, indicating systemic strain in Malaysia's retirement security model.
In response to these challenges, Perkeso has implemented measures such as the Health Screening Programme for workers aged 40 and above, aimed at detecting health issues before they become irreversible, and the Return-to-Work Programme, which assists injured or ill workers in rejoining the workforce through rehabilitation and support.
However, Dr Azman stressed that Perkeso's efforts alone are insufficient without broader systemic reform, calling for a new vision for retirement that reflects the diversity of working lives in Malaysia.
This includes the introduction of flexible retirement pathways, partial disability options, and minimum income guarantees for those forced to exit the workforce early due to health reasons.
'We must stop treating retirement as a single number, whether 60 or 65, and instead start recognising that the ability to work is not evenly distributed,' Dr Azman said.
His remarks come ahead of the World Social Security Forum (WSSF) set to take place in Kuala Lumpur on Sept 29, positioning Malaysia at a pivotal moment to address these challenges with input from global best practices.
'This global gathering is not merely a stage for policy exchange. It is a test of sincerity,' Dr Azman said, adding that Malaysia's hosting of the WSSF is an opportunity to learn from other countries facing similar demographic pressures while ensuring those who contributed to the nation's workforce are not left behind.
He emphasised the need to design a future that protects all workers, including those who could not work until retirement due to health limitations, ensuring that every worker is seen, valued, and supported.
'Let us not build a future that works only for the fit and fortunate. Let us build one that holds up the weary,' he said. 'Because in the end, what is the point of being the last person standing while others did not make it?'
The call for a more compassionate and realistic approach to Malaysia's retirement and social protection framework comes as the nation grapples with an ageing population, rising healthcare costs, and a workforce increasingly impacted by non-communicable diseases.
This demands urgent cross-ministerial and multi-stakeholder attention to address dignified ageing and income security for all Malaysians. Mohammed Azman Aziz Mohammed Perkeso retirement