The Malaysian Insider understands that Putrajaya is reviewing the matter thoroughly from the financial and social aspects including widening job opportunities in the civil service, which employs 1.2 million people or nearly 5 per cent of the population. Nearly 40 per cent of that figure are in the educational sector, who form the bulwark of support for the ruling Barisan Nasional federal government.
It will be the third such review of pensionable age in the last five years. The last change to 58 from 56 was in July 2008.
“The PSD and Cuepacs have begun talks for the proposal to raise mandatory retirement age from 58 to 60,” a source told The Malaysian Insider, adding the discussion began early this year.
“There are indications to raise the mandatory retirement age from the government’s side but there is no final confirmation. We hope to hear a positive development at today’s meeting,” added the source.
It is understood that Cuepacs favours the change, having once submitted a memorandum to raise the retirement age to 60 as seen in other countries or 62 in the case of Singapore.
The source said the government might agree to the idea to raise the retirement age as it can provide savings in doling out gratuity to those being pensioned off.
“I am confident the government will give a green light to the proposal raising the retirement age if seen from the angle of saving money,” he added.
The PSD recently announced that those who take optional retirement will not be given their full gratuity.
The PSD circular of Jan 25 said optional retirement will now be approved on the condition that applicants agree to be paid 20 per cent of their gratuity or RM10,000, whichever is higher, on retirement beginning Feb 1.
Cuepacs had said the 20 per cent of gratuity or RM10,000 was not enough for retirees to live on while waiting for their pension.
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