The proposal to raise the withdrawal of the Employees Provident Fund (EPF) from the present age of 55 to 60 has raised a storm among contributors who generally felt that it was unfair to hold back their retirement fund, especially for those who retired before 60.
On the other hand, the Malaysian Trade Union Congress (MTUC) was all for raising the withdrawal age to 60, arguing that the retirement age has now been moved from 55 to 60.
While this reasoning is sound as increasing the withdrawal age to 60 is keeping up with the change in retirement age, it is also flawed as many Malaysian workers are still retiring before 60 while there are also those who opt for early retirement.
These people will face extreme hardship in the years between their retirement and when they reach 60 as they would have no income and no savings to live on.
Another reason MTUC supports EPF withdrawal at 60 is because it strengthens their fight to raise the retirement age to 60 for all workers.
Among the arguments for and against raising the age for employees to withdraw the EPF were some which advocated a compromise by giving the option to those who reached 55 to withdraw if they retired at that age or at any age before 60.
This is the most reasonable way out as it would make sure that those who retired before 60 would not suffer financial hardship while waiting for the full withdrawal of their savings.
Unfortunately, there are also those who took a more cynical view on the proposal to raise the age for full EPF withdrawal to 60, claiming that it is a ploy by the government to keep the workers’ savings under its control for a little longer so that it could utilise the funds for an extra five years.
Hopefully this suspicion would not be picked up by politicians to score mileage with the voters, thereby politicising the whole issue and diverting it from the rights and plight of employees.
The issue of raising the withdrawal age must also not cause us to neglect the more pressing and serious problem facing a vast majority of retirees, which is managing their savings after withdrawing them.
Alarmingly, many retirees finish their savings within a few years after withdrawal and are left in financial hardship for the rest of their life.
More efforts should be made to guide retirees on how to manage their savings to make sure they can sustain a reasonable lifestyle in their old age.
On that score, the idea of raising the age for full withdrawal to 60 is sound as it would allow employees to save up more before retiring.
However, the key is still helping employees manage their savings in their retirement.