Petaling Java, Malaysia (The Star/ANN) - Effective July 1 next year, Malaysia's retirement age for workers in the private sector will be raised from the current age of 55 to 60.
Employers, however, can ask to be exempted from the new ruling for up to six months, until December 31 next year.
For that, Human Resources Minister Datuk Seri S. Subramaniam said employers must submit "strong reasons and justifications" in their applications, which must be sent to the ministry by February 28.
"However, the new ruling does not prevent an employee from retiring upon attaining the age of optional retirement, as agreed to in the contract of service or collective agreement," he said in a statement yesterday.
The retirement age for private sector was increased to 60 under the Minimum Retirement Age Act, which was passed in June and gazetted in August.
Subramaniam said the date of implementation was decided after discussions with all the affected parties.
Malaysian Employers Federation (MEF), however, said the "abrupt" implementation of the Act would cause a lot of disruption to the cost structure and succession planning in most companies.
"While it is a good move to increase the minimum retirement age, we suggested that the implementation be staggered so as not to cause disruption to employers," said its vice-president Michael Chiam.
He said MEF had suggested that the retirement age be increased gradually, as was done in the civil sector, instead of raising it by five years at one go.
"Companies should be given time to adjust to the change as their costs will surge if they have to retain their employees for an additional five years," he said.
Meanwhile, a bank manager who only wanted to be known as Kamal described the new ruling as "unfair" to those who turn 55 next year.
"The Government should consider the situation faced by of all of us who may not have the chance to continue working until the age of 60.
"I will be turning 55 in September next year, and I am not sure whether my employers will extend my employment," he said.