1Retirement age – getting experienced older people to work can help country’s economy

DID you know that working until 65 or beyond can possibly delay the onset of dementia?

In a recent study conducted in the United Kingdom, a significant correlation was found between delayed retirement and a later onset of Alzheimer’s disease. The Cardiff University and Institute of Psychiatry, King’s College London joint study identified men with “probable” Alzheimer’s disease from clinical databases provided by the Medical Research Council and Alzheimer’s Research Trust. They compared men’s retirement ages and found that each extra year worked postponed the onset of dementia symptoms by nearly six weeks.

The chief of the research trust said: “More people than ever retire later in life to avert financial hardship, but there may be a silver lining: lower dementia risk. Much more research into lifestyle factors is needed if we are to whittle down the 17bil a year that dementia costs our economy, contribute to the economic growth by working and reduce healthcare costs.”

Extending retirement age

Early this year, the UK government made the announcement that they would phase out a default retirement age of 65. This will mean that employers will no longer be allowed to dismiss staff just because they have reached the age of 65. The Department for Business said that as well as benefiting individuals, “the freedom to work for longer will provide a boost to the UK economy”.

Last year, Lim Boon Heng, a Minister in the Singaporean Prime Minister’s office, indicated that the country may need to raise its retirement age to 68. He said Singaporeans now need to work longer because of their increasing lifespans and their need to accumulate more for their old age. A law that will make it mandatory for employers to offer re-employment to workers beyond the age of 62 will be in place by 2012. “We are raising the retirement age, through the process of re-employment from the current 62 to 65 in January 2012. Beyond that we would have to examine how we can further raise the retirement age to 68,” he said.

Where are we heading in terms of our ageing workforce in Malaysia? Our retirement age happens to be the youngest in Asia. The majority of us retire before 60. Unless our employer chooses to retain or re-employ employees after 55, many middle income retirees have financial difficulties because of the increasing costs of living. Some have children who are not financially independent yet. Housing loans, car loans and credit debts, coupled with possible unforeseen medical costs make the danger of falling ill at an old age very palpable.

On the other hand, employers appear to face challenges re-employing older people or retirees. Understandably, they may only re-employ them if they are physically and mentally fit, and have the skills, knowledge, experiences and the right attitude towards the job. Some have said, “We have jobs for older people. But they are choosy; want to work near their house, with an easy job and the same pay as before. Unless they have the right attitude and mindset, are willing to work harder and learn new things, we will not hire.”

When developed countries like the United Kingdom and Singapore are extending retirement age because of economic, business, financial, health and lifespan reasons, employers in Malaysia have difficulties finding suitable older people to work. Meanwhile, retirees and pensioners complain that employers prefer to hire younger people because they are energetic, creative and work for lower pay.

It does seem like a Catch-22 situation. On the macro level, the Government has an important agenda to carry out to achieve the Economic Transformation Programme (ETP) key results areas in the next few years. More people are required to work towards the objectives, and having Malaysians retiring before 60 may hamper the programme’s success. The Entry Point Projects (EPP) are meant to create more jobs for Malaysians; allowing us to achieve higher income level society status across the board from younger generation to retirees.

Importantly, are we able to find sufficient number of Malaysians to fill in the new jobs created by the EPP projects? Can we ensure these projects will be carried out successfully if it takes time to attract talents to Malaysia?

If the younger generation is not keen or may not be able to do tasks that need skills, knowledge and working experience, should we fill in the vacancies with foreigners or it is better to have Malaysians to do it? What are the economic and social costs and benefits of extending our retirement age and re-employing our private sector retirees (after 55) and government pensioners (after 58)?

Our late baby boomers are retiring very soon within the next few years for the white and blue collars. If we stick to our current retirement age before 60, will we be losing out in terms of talented, experienced and skilled older employees? For continued business growth, government and private sectors will need to be prepared for challenges of an ageing workforce.

Since ETP’s initiated EPP projects are mostly joint collaborations within the private and public sectors, wouldn’t this be an opportune time and valid reason to extend our retirement age for the private sector and government employees, instead of draining our local brains by retiring them early?

If we want our ETP to be a success story and make history, progressively extending the retirement age to 60 or even older may just be an important and logical thing to do. 1Malaysia 1Retirement Age for all private sector and government employees will lead to increases in the country’s workforce, allowing us to pursue global competitiveness and economic growth goals.

The Government and employers should also consider enacting the re-employment legislation for retired persons and call it “The Silver Collar” employment legislation. The legislation is meant to provide appropriate guidelines for employers to hire retired persons for different types of employment (white and blue collar job), salary and wages, entitlements and benefits of re-employment for different industries.

Retired persons from both private sector and government sector will be able to replenish their depleting savings, keep their body and mind healthy, avoid social isolation, depression and anxiety and lessen the financial burden they place on their adult children and government, if they run out of money.

Silver Collar employees can help business owners to fill in new vacancies and jobs that required the baby boomers’ skills, knowledge, experiences and talents. The Government’s financial coffers will improve because more people are contributing to the country’s economic growth and less people will be asking for social welfare benefits. In the nutshell, we will require “two hands to clap”.

It lies in the hands of the Government and business owners to create this golden opportunity instead of giving our retirees “the golden handshake”. – Comment by CAROL YIP

Source: The Star

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