Perceived Benefits and Drawbacks of the Retirement Age Policy in Malaysia: HR Perspective

Continuing improvements in life expectancy means that people will live longer on average than any previous generation. The combination of increased life expectancy and new retirement age policy in Malaysia has important implications for human resource management. Recently, the Ministry of Human Resource of Malaysia proposed a bill to increase the retirement age in the private sector to 60 years which has resulted in a swirling debate. This has raised many arguments implying demographic, economic, social and political points of view; both in favour of, and against the proposed policy. Malaysia has been slower in taking steps to increase the retirement age as compared to neighbouring ASEAN countries. According to the International Institute of Management, there are a number of countries with higher retirement ages which are ranked higher than Malaysia in terms of productivity and economic scale. It is imperative to study the implications of the proposed new policy from the aspect of human resources. In this study, an open-ended survey of 230 currently employed individuals of varying demographics was conducted in a number of cities across Malaysia (Kuala Lumpur, Penang, Ipoh, Kuching Kota Bharu and Johor Bharu) to determine reactions and opinions about the imminent retirement age policy changes. The collected qualitative data was analysed for the emerging key themes using a coding method. The data was analysed by reading through more than 230 scripts, sorting the opinions into specific response categories and grouping common themes and repeated words and phrases. Although the findings suggested that most of the respondents (86%) agreed to raise retirement age policy, some remains skeptical (14%). Among the positive points stated by the respondents are the contribution to the nation growth, ensure financial security, reduce reliance on foreign labours, mental and physical fulfillment for older workers. The majors perceived drawbacks among respondents are on the issues of potentially reduce job opportunity, career advancement for younger workers, low productivity and higher cost compare to younger employees. Findings of this study could provide better understanding regarding the spectrum of opinions regarding the policy of increasing the retirement age in Malaysia as well as other nations, especially in the private sector.