Retirement age hike won't harm young jobseekers, says World Bank economist
KUALA LUMPUR : Raising the retirement age in Malaysia will not reduce job opportunities for young people, World Bank senior economist for social protection and jobs in the East Asia and Pacific region, Matthew Dornan said today.
Speaking at EPF's International Social Well-being Conference here today, Dornan said the belief that older workers would take away jobs from younger ones was a common misconception.
'There isn't a fixed number of jobs in the economy,' he said during his keynote speech titled 'Labour and longevity: Responding to the challenge of an ageing population.'
He said older workers who stayed employed continued to spend money, which helped support the economy and create more jobs, including for younger workers.
Dornan said studies showed that this trend was also true in Malaysia, except in sectors such as the civil service where employment might be capped.
He said many countries had raised their retirement age as the population aged, adding that Malaysia did the same when it gradually increased the minimum retirement age from 55 to 60.
Dornan said any further increase should be gradual and fair, possibly with different rules for different age groups, to allow time for adjustment and reduce public backlash.
He also suggested linking the retirement age to life expectancy, as done in some developed countries, to prevent it becoming politicised.
Yesterday, EPF CEO Ahmad Zulqarnain Onn said that life expectancy in Malaysia had increased from 54 years in the 1950s to 75 today, and was projected to hit 81 by 2050.
Dornan warned that allowing early access to pension funds might lead to inadequate savings in old age, as some might spend the money too early.
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He added that while retirement policies mainly affected formal workers, many informal workers in Malaysia continued working beyond 60 out of necessity.
Last month, law and institutional reform minister Azalina Othman Said proposed that the government study extending the retirement age to 65, noting that many Malaysians remained active and capable well into their 60s.
In 2014, Malaysia raised the retirement age to 60 for both public and private sectors, up from 58 and 55 respectively, to promote financial security and active ageing.
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