Higher Retirement Age Must Come With Succession Planning

KUALA LUMPUR, Sept 1 (Bernama) -- Malaysia must adopt a phased retirement model and enforce succession planning before raising the retirement age, said IM Possible Solutions Sdn Bhd managing Director Amir Isyam Abdul Rahim.

He said increasing the retirement age is inevitable due to the nation’s ageing demographics and longer life expectancy, but warned it could worsen income stagnation, career bottlenecks and brain drain without proper policies.

“The retirement age has to go up, otherwise, society, families and the government will be burdened if seniors cannot support themselves. But this requires a phased approach,” he said on Bernama TV’s The Nation programme today.

Amir proposed that older employees be allowed to stay in the workforce but transition out of top leadership roles, with companies required to implement structured succession planning.

“Yes, increase the retirement age, but compel companies to create opportunities. Seniors can stay on, but not as directors, C-suites or heads of department. They must transition out,” he said.

He said such policies would allow companies to retain institutional knowledge and mentorship from seniors while creating space for younger and mid-career employees to advance.

Amir cautioned that without reforms, younger Malaysians could increasingly look abroad. “If my upward mobility is blocked, I might as well go somewhere else where I’m appreciated. In today’s global marketplace, that place may not be Malaysia,” he said.

Among his proposals are mandating succession planning in both public-listed and private companies, linking loan incentives to structured talent development, and introducing salary transparency laws to ensure fairer wealth distribution.

He added that while Malaysia’s retirement savings system is relatively strong, many workers still lack sufficient savings, compounded by rising living costs and longer life spans.

Amir stressed that retirement reforms cannot be viewed in isolation, as they are tied to education, healthcare, wage growth and the adoption of artificial intelligence.

“Ultimately, this is about intergenerational balance. We need policies that protect seniors while ensuring younger Malaysians can thrive and take over leadership roles,” he said.

On July 31, Prime Minister Datuk Seri Anwar Ibrahim, when tabling the 13th Malaysia Plan (13MP) in Parliament, announced that the retirement age policy would be reviewed in line with Malaysia's demographic shift toward an ageing nation.

 Chief Secretary to the Government Tan Sri Shamsul Azri Abu Bakar was reported to have said that an in-depth study of the proposal is necessary before any decision can be made.

-- BERNAMA