Malaysia should consider raising the retirement age as its population lives longer, says KWAP CEO

KUALA LUMPUR (June 4): Malaysia should consider raising the retirement age in light of rising life expectancy, said Retirement Fund (Inc) (KWAP) CEO Datuk Nik Amlizan Mohamed.

At the International Social Wellbeing Conference 2024 (ISWC), themed ‘Aging and Longevity: Towards a Meaningful Retirement’, organized by the Employees Provident Fund (EPF), Nik Amlizan stressed the need to review pension plans and social security systems to ensure that retirees can support themselves over a longer retirement period.

“Perhaps this is a very relevant moment for us to re-evaluate the retirement age (currently from 60 years). When I was little, 50 years old was (considered) old, but that’s no longer the case,” she said during Tuesday’s panel discussion.

“In 1960, Malaysia’s life expectancy was 57 years, but now it is 75 years. So I think that number or expected requirement should be built into our (retirement) planning. Are we prepared when we look at whether our children may meet these expectations? the age of 100?” she asked.

Nik Amlizan stressed the importance of “rethinking (the issue) in terms of the whole ecosystem design,” saying several aspects of the policy need to be adjusted in tandem with a possible increase in the retirement age.

“Meeting the expectations of our retirees may still be quite far away,” says Nik Amlizan.

Part of the pension payments are funded by KWAP, which was established in 2007 to help finance the civil service’s pension obligations. KWAP’s total gross fund size stood at RM190.3 billion at the end of December, the Ministry of Finance said in March.

Earlier on Tuesday, EPF chairman Tan Sri Ahmad Badri Mohd Zahir said the demographic shift of rising life expectancy poses a significant challenge to the country.

And while the average life expectancy of Malaysians has increased to 75 years, healthy life expectancy remains relatively unchanged at 65.7 years, highlighting the need for expanded care and resources for our aging population and to promote healthy aging, he said.