You want to work till 60?

The article below on Brunei Times today elicited a lot of talking this morning. As a government finance man, I can imagine the many financial benefits it will bring to the public finance. On the flip side I can also imagine many difficulties including among others to many junior colleagues having to wait longer to be promoted. Me? I look forward to my retirement age at 55. What about you?

Brunei’s Retirement Age To Be Raised To 60 Soon?
By Yazdi Yahya

Bandar Seri Begawan - If the study by various government agencies determining if the retirement age should be extended is in the positive, then the retirement age for civil servants in Brunei could be pushed to 60 years in the near future.

The issue of raising the retirement age has been raised in last year's Legislative Council meeting, especially in view of the fact that life expectancy in the sultanate is now at 74 years.

A member of the council spoke on the matter suggesting that studies should be made to examine the impact of increasing the retirement age from 55 years to 60 years, a move which sections of the local workforce would welcome warmly for several reasons.

There has been a growing concern towards the issue of the retirement age in Brunei that the mandatory retirement age of 55 years was too early.

The shift of age structures in developed countries has had a profound effect on their political, economic and social conditions.

An ageing population, resulting from better health care and better living conditions has led researchers to examine the effects of the aged - especially in terms of social security.

The extended tenure would ensure these experienced employees continue to contribute to the nation's development. Currently, a significant part of the workforce is under the Employers Trust Fund (Tabung Amanah Pekerja), similar to the Central Provident Fund in Singapore and the Employees Provident Fund in Malaysia.

A former prominent figure from the public service department, who declined to be named, agreed that by increasing the retirement age, in some cases where the experience is needed, would provide them with more time to mentor the younger generation.

He added, "Thirty years ago, if someone were 55, they would be considered old but now, with higher life expectancy rates, the potential contribution would still be considered high, especially .as I feel that people nowadays are still active at 55."

He also highlighted that the extra years would give civil servants, under the TAP scheme, the chance to earn more money as there have been cases where retirees under the TAP scheme do not have enough at the end of the day. With extra money, it would also reduce government spending on social security schemes.

The implication of such a move would help provide better social security, especially for retirees. The extra earnings would be useful, once retired, especially to support their medical needs because older people who would need more healthcare. But questions may be raised on whether the people will want to continue working after 55.

Whether the retirement age is increased or it be made compulsory can affect the productivity of workers. Factors such as tiredness and lack of motivation should be considered before introducing such a change. Moreover, as a significant part of the local workforce is employed by the government, extending the retirement age would increase government expenditure.

If Brunei's retirement age were to increase to 60, the government would need to commit more funds (five years worth) for employee benefits.

Countries such as Singapore, with a retirement age of 62 and Philippines, at 65, have a higher retirement age than Brunei.

So why is Brunei not headed in this direction. Firstly, Malaysians and Singaporeans are mostly employed in the public sector and extending the retirement age does not affect government spending as much. In Brunei, the move would increase spending significantly.-- Courtesy of The Brunei Times