30-04-2008: Civil service retirement age to be raised to 58

30-04-2008: Civil service retirement age to be raised to 58
by Surin Murugiah

PETALING JAYA: The government is set to raise the retirement age for civil servants to 58 years from the present 56 in response to a proposal by the Congress of Unions of Employees in the Public and Civil Services (Cuepacs), sources familiar with the matter said.

The decision to raise the retirement age had already been finalised by the government and an announcement would be made very soon, a source told The Edge Financial Daily.

Cuepacs president Omar Osman, however, said the union was unaware of any such decision and had not heard anything from the government since its last meeting earlier this month.

“Of course, we would welcome such a decision to raise the retirement age for civil servants. We hope it would be announced on May 1 or during the national-level Labour Day celebrations on May 3,” he told The Edge Financial Daily in a telephone interview.

He said the national-level celebrations were being organised by the human resources ministry, adding that Cuepacs and the Public Services Department would be jointly holding another event on May 10 in Putrajaya.

Earlier this month, Cuepacs said the government had agreed to consider several of its requests, including raising the retirement age limit to 60, scrapping the efficiency level assessment test, reinstatement of critical and housing allowance for the support group and pension payments to be based on actual years of service.

Cuepacs had also asked for an honorarium payment of RM2,000 for each government employee in lieu of non-payment of bonus last year, but this was rejected by the government.

Malaysia is the only country in Southeast Asia, apart from Brunei, where the retirement age is 56. In neighbouring Singapore, the retirement age is 62.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng said there was a need to extend the retirement age in Malaysia to be in line with international standards and demographic trends.

“Life span has increased now with modern healthcare. The increase in the retirement age could also reduce the need to recruit new workers in certain sectors which are over-employed,” he said when asked to comment on the government’s decision.

Nonetheless, he said those who wanted to retire voluntarily must be allowed to do so.

He said a decision to increase the retirement age would particularly benefit services like local authorities, the police force and medical care that now faced acute shortage of experienced personnel.

Yeah said for the sectors where there was a shortage of skilled and experienced workers, this would be an opportune time to increase productivity and for the older workers to share their wealth of knowledge.

“But there has to be a balance in terms of retaining skilled or experienced workforce versus the increase in expenditure outlay. As long as productivity of the worker is maintained, raising the age and the related expenditure would be justified,” he said.

Yeah said several other factors were also crucial in extending the retirement age, particularly with regards to workers whose productivity was suspect.

“There must be proper evaluation to weed out the deadwood. Also, extending the retirement age means that those in line for promotion might have to wait longer,” he said.

Yeah said a decision by the government to raise the retirement age limit for the civil service would have no bearing on the private sector as each dealt with different skill sets.