KUCHING: Keeping civil servants in their jobs until 65 could slow promotions, block younger hires, and drive up government salary costs — with the risks outweighing short-term gains, said Dr. Nivakan Sritharan.
The Swinburne University of Technology Sarawak lecturer said that while the proposal may offer some fiscal advantages, it carries significant implications for labour market dynamics, generational equity, and long-term productivity.
“Extending the civil service retirement age to 65 can have both positive and negative economic implications, and the overall impact will depend on how effectively the policy is implemented, as well as the structure of Malaysia’s labour market and its demographic trends,” he told Sarawak Tribune.
On the positive side, he said older civil servants who remain in the workforce continue to pay income tax and contribute to pension schemes.
“Delaying retirement could help reduce pension liabilities and support government finances in the short to medium term.
Their continued employment may also expand the labour force and contribute to GDP.” He added that many older employees hold valuable institutional knowledge, which can support productivity in administrative and policy roles. Keeping them in service may also reduce the need for government assistance after retirement. However, Nivakan said the move could create bottlenecks in hiring and promotions, particularly in structured sectors such as education and public administration.
“Keeping older employees in service longer may delay job openings for younger entrants, potentially contributing to youth unemployment. “It may also limit career progression opportunities for mid-career professionals, creating stagnation in organisational development and talent renewal,” he said.
He noted that in sectors requiring rapid technological adaptation, a reduced inflow of younger employees may affect productivity over time.
“Without support policies such as retraining or flexible work arrangements, some older workers may struggle to maintain productivity, particularly in roles that are physically or technologically demanding.” He suggested that the government implement flexible retirement options, such as parttime or phased roles, alongside investments in upskilling older workers.
These measures, he said, should work in tandem with broader efforts to improve youth employment and workforce mobility. He also pointed out that the demographic shift affects all segments of society, not just the civil service. “Ageing nation status refers to the increasing proportion of older individuals across all segments of society.
Therefore, raising the retirement age for public service alone does not fundamentally address the demographic shift.” He said the assumption that all older workers can or wish to remain productive is flawed, as not all sectors are suited to longer working lives. Roles in manual labour or caregiving may be especially challenging to extend into later years.
“Performance may naturally decline with age due to health, energy, and adaptability. While the option to continue working should be available, it should not be mandated or treated as a one-sizefits-all solution.”
Nivakan recommended a broader, more inclusive policy approach. “This includes phased retirement, job-sharing, entrepreneurship support for all age groups, and investment in employment-generating sectors such as green technology, care services, and the digital economy.” He also called for pension reforms and improved access to vocational education, apprenticeships, and lifelong learning. He said a shift towards healthy ageing and wellness programmes is also important to help seniors remain active and independent, while creating space for younger workers to enter the job market and advance their careers.
