Mahathir must not be two centuries behind Bismarck and should direct a completely new study on the issue of raising retirement age to 60, involving the fullest public consultation and debate

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Media Statement
by Lim Kit Siang 

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This is because the Cabinet decision had been made in a very feudalistic manner without the fullest public consultation and debate in line with the principles of accountability, transparency and good democratic governance.

The retirement age of 55  for civil servants in Malaysia was introduced by the British in the 1950s, but how many Ministers and decision-makers are aware of the following:
 

• Of the seven major industrialized nations, the United States, Germany, and Canada set normal retirement age at 65 for both men and women. In the other countries, the retirement age is lower. In the case of the United Kingdom, men have a retirement age of 65 while women can retire at 60.
• Germany is probably the first nation in the world in 1889 under Bismarck to introduce a standard retirement age and adopt an old-age social insurance program. Germany initially set age 70 as  the retirement age (and Bismarck himself was 74 at the time) and it was not until 27 years later in 1916 that the age was lowered to 65.
• The United States first introduced the standard retirement age  65 years ago in 1935 when the Social Security Act established 65 as the minimum age at which retirement benefits can be obtained. Sixty-five was selected as a compromise between age 60, which appeared too low from a cost standpoint, and age 70, which appeared too high given that life expectancy at the time was 59 years for men and 63 years for women. Since 1956, women have had the option to take reduced benefits at age 62, and since 1961, this option has also been available to men. As a result, 62 has been defined as the EEA (early eligibility age) and 65 is considered the NRA (normal  retirement age).

 
 Life expectancy has gone up substantially since  the normal retirement age of 65 and the early  eligibility age of 62 were established. In 1983, a  gradual increase in the normal retirement age to  67 was enacted and there is active debate for it to be raised to 70 years.

• In the United Kingdom, the 1945 welfare state legislation set the retirement age at 65 for men as the average life expectancy of a man was 63 at the time and there is now active debate for the raising of the retirement age as life expectancy has risen to 75 years.

The Prime Minister, Datuk Seri Dr. Mahathir Mohamad have  exhorted  Malaysians ad nauseum to liberate themselves from all forms of neo-colonialism, including mental and spiritual - and one of the things Malaysians should free themsleves from is the British colonial decision in the 50s that Malaysians are no more productive after 55,  especially  as  with better health care and medical services, the  average life expectancy of Malaysians is 72 years.

In any event, it is most incongruous for a Cabinet headed by a 74-year-old Prime Minister to reject a proposal that the 55-year retirement age of civil servants be raised to 60 when 111 years ago the German Chancellor, also at the same age of 74 years old,  had set 70 years as the standard retirement age.

Mahathir must not be seen as two centuries behind Bismarck and he should direct a completely new study to be made on this issue, involving the fullest public consultation and debate affecting  not only CUEPACS, but all sectors of Malaysians society.
The most powerful argument for the raising of the retirement age from 55 to 60 is that if judges, ever since independence, are only retired at 65. there is no reason why civil servants cannot function effectively up to the age of 60.

(11/1/2000)