Asia Times: Golden years of poverty for Malaysians



	March 4, 2000	atimes.com

Southeast Asia

Golden years of poverty for Malaysians
By Anil Netto

PENANG, Malaysia - There was no gold watch for Tan Kok Hin when he retired almost 10 years ago from the company that had employed him for decades. But at least Tan, then 68, got a lump sum from the state-run Employees Provident Fund (EPF).

The former sales representative and his wife at first tried to survive on that 40,000 ringgit ($10,500) that was his mandatory retirement savings. Stretching the meager sum, however, became increasingly difficult, and Tan had to look for a job to help pay for their daily needs. He complains, ''The price of everything has gone up, even hawker food.''

Tan is only one among hundreds of thousands of retired Malaysians who are finding life after employment ever more stressful. They have had to struggle to keep their heads above water with pensions that have not kept up with the times. According to some reports, some pensioners have been making do with just 80 ringgit ($21) a month - well below the poverty line of 460 ringgit.

As it is, economists point out that the official consumer price index, which is based on a basket of typical goods and services - some of which are controlled items - does not reflect real inflation. Notes private sector retiree Tommy Lim: ''A cup of coffee still costs the same, but they give you a smaller cup.''

The Malaysian Trade Unions Congress (MTUC) has thus urged the government to review the payments given to pensioners and their dependents. Even the Government Pensioners Association is now asking a minimum monthly pension of 500 ringgit ($132) and an annual allowance of a month's pension to ease the retirees' burden.

Malaysia has some 350,000 pensioners. The ex-private sector employees among them - like Tan - had been entitled to receive a lump sum from their EPF savings when they retired. A few lucky ones may have had employers who paid them additional retirement benefits. Even then, the total benefits they receive last them only for five years.

Civil service pensioners, who receive sums based on how long they worked for the government, face a similar predicament. According to the formula used (for which the length of service is subject to a maximum of 25 years), their pensions can only amount to a maximum of half their salaries upon retirement at the age of 55. But a major grouse is that the pensions of those who have worked for more than 25 years - some have even worked for 35 years - in the civil service are also limited to half their last-drawn salaries.

The majority of pensioners - ex-private sector employees and otherwise - receive 250-400 ringgit ($65-$105) monthly. According to 1997 statistics, 70 percent of the country's pensioners were getting less than 500 ringgit a month while 21 percent were receiving less than 200 ringgit. These amounts are less than the subsistence level, and have forced many pensioners to rely on their relatives and children for financial aid or to take up new low-paying jobs, as Tan ended up doing.

But Tan is among a minority of retirees who are able to find work after 55, the official retirement age. In truth, that retirement age peg has now also become a subject of debate, with critics pointing out that it has remained unchanged for years, even though more people are living longer. The average lifespan of a Malaysian, in fact, is now 72 for men and 75 for women. The MTUC has called for the retirement age to be raised to 60 to reflect higher life-expectancy rates.

Yet there is a group of people who are being put to pasture way before their time: lower-ranked police and army personnel. Military personnel are usually decommissioned at the ages of 33 and 40 at a time when they have growing families to support. Many of them end up as unskilled workers or take on low-paying jobs as drivers, security guards and dispatch riders, with almost no promotion prospects.

As for those who are being retired at 55, observers say that at that age most still have commitments and outstanding loans to settle. Many civil servants have to work until their mid-30s before they can afford to take up a housing loan. By the time they retire, they will probably still be repaying these loans.

More Malaysians are also marrying later and having children at an older age. Many parents in their 50s struggle to pay for their children's education. Burdened by the ever-increasing tuition fees for their children's tertiary education, retirees often find their hair growing whiter with worry.

Most retirees usually place their retirement benefits in bank fixed deposit accounts. But this prudent move has barely improved their nesteggs. To make matters worse, bank interest rates have plunged. ''Now they only earn four percent interest,'' says Lim.

As if these woes are not enough, retirees have also had to contend with spiraling health care costs. ''The medicine I used to buy for my eyes used to be eight ringgit [about $2]; it's now 15 ringgit,'' grumbles Lim. ''You can check with chemists how much the prices of medicine have gone up.''

Although the state-run general hospitals have provided a cheap alternative to the exorbitant private hospitals, even this option is under threat. Activists say plans are afoot to ''corporatize'' or semi-privatize hospitals and this, they fear, could lead to higher health care costs. Pensioners are already complaining that they now have to buy the more expensive medical drugs at pharmacies and private clinics - medicine that was once freely available in state-run hospitals.

Apart from calling for a better deal for retirees, some critics say there is no reason why those above 55 should not be allowed to work longer. They point to Prime Minister Mahathir Mohamad, who, at 74, shows no sign of clearing his office drawers and enjoying retirement life with his grandchildren.

(Inter Press Service)

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©1999 Asia Times Online Co., Ltd.