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Government Foresees Expenditure On Retirees To Surge To RM100 Billion By 2050 Due To Longer Life Expectancy - Najib

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PUTRAJAYA - The government has projected that its expenditure on retirees will increase to a whopping RM100 billion by 2050 due to the trend of life expectancy among Malaysians increasing from 75 to 85 years, said Prime Minister Datuk Seri Najib Tun Razak.

He said the were 775,000 civil service retirees at the moment, and the number was expected to surge to 1.5 million by 2050.

"Last year alone, government expenditure on retirees was RM20.35 bilion...The government is studying the trend and its implications on the country's future. This is a call for the government to make some adjustments on its policies," he said at a breaking-of-fast event with 2,000 civil service retirees at Seri Perdana here today.

Also present were the prime minister's wife Datin Seri Rosmah Mansor and the Malaysian Government Pensioners Foundation chairman Tan Sri Aseh Che Mat.

Najib, who is also Finance Minister, said another trend that could give a huge impact to the country's competitiveness and productivity level was the declining birth rate, which might turn Malaysians into an ageing society.

"We need a birth rate of 2.1 per cent but today, our replacement rate has gone down to 1.9 per cent. This means we will become an ageing society as days go by, " he said.

The prime minister said in Japan, the country's growth was very slow due to the ageing society phenomenon.

As such, he said brain storming sessions were now needed to determine on the required changes over Malaysia's policies.

"What are the implications on cost of health and whether those who are retired have enough savings or funds to continue living comfortably.

"Government pensioners might earn a more comfortable income than those (who worked) in the private sector, although I am made to aware of the challenges of those who retired from the civil service, " said Najib.

The government would always care for the welfare of government pensioners who had served the country well and in return, they would continue the government´s struggle, he said.

According to Najib, several improvements had been made to the Retirement Benefit Scheme for civil servants since he became the prime minister in 2009 including awarding pensions to officers appointed after April 12, 1991 who opted for early retirement.

In addition, he said the payment of derivative pension to widows or widowers was extended from 12-and-a-half to 20 years from the retirement date.

Earlier, at the event, Najib also handed over wheelchairs from the foundation to five pensioners in need.

-BERNAMA