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Impact of Increasing Retirement Age on Longevity Factor: An Empirical Study for Government Pensioners in Malaysia

Jurnal Ekonomi Malaysia

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Title Impact of Increasing Retirement Age on Longevity Factor: An Empirical Study for Government Pensioners in Malaysia
 
Creator Ibrahim, Rose Irnawaty; Faculty of Science & Technology
Universiti Sains Islam Malaysia
71800 Bandar Baru Nilai, Negeri Sembilan,
MALAYSIA
 
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Description ABSTRACTMost contemporary research indicates that life expectancy in most countries is increasing. Since average life expectancy tends to increase over time for males and females, mortality risks tends to be smaller over time. Therefore, it is expected that pensioners will tend to live longer and cause an increase in pension liabilities to the government in the future. The government is looking for solutions to decrease the effects of increased longevity on pension costs. The most common changes recommended are to equalize the retirement age for males and females; and to increase the age of retirement. Since pensions are paid for the rest of pensioner’s life; and to the spouse and child of the pensioner (if any) in the form of a derivative pension in the event of the death of the pensioner, the longevity factor can be considered as an importantelement when constructing an effective Government Pension Scheme. This paper estimates the longevity factor for case of government pensioners who survives and also dies at the particular age of retiement; and examines the impact of increasing retirement age on longevity factor. Based upon the findings, the overall longevity factors for a government pensioner who survives and dies are observed to decreases as retirement age increases.Keywords: Derivative pension; life expectancy; longevity factor; pension liabilitiesABSTRAKKebanyakan penyelidikan kontemporari menunjukkan bahawa jangka hayat di kebanyakan negara semakin meningkat.Oleh kerana purata jangka hayat cenderung ke arah peningkatan mengikut masa bagi lelaki dan wanita, risiko kematian cenderung menjadi lebih kecil terhadap masa. Oleh itu, dijangka pesara-pesara akan cenderung untuk hidup lebih lama dan menyebabkan peningkatan di dalam liabiliti-liabiliti pencen kepada kerajaan pada masa hadapan. Kerajaan sedang mencari penyelesaian untuk mengurangkan kesan-kesan peningkatan kelanjutan usia terhadap kos persaraan. Perubahan paling biasa yang disyorkan adalah menyamakan umur persaraan bagi lelaki dan wanita; dan meningkatkan umur persaraan. Oleh kerana pencen dibayar sepanjang hidup pesara; dan jika berlaku kematian dibayar kepada pasangan dan anaknya (jika berkenaan) di dalam bentuk pencen terbitan, faktor kelanjutan usia boleh dianggap sebagai suatu elemen penting apabila membina Skim Pencen Kerajaan yang efektif. Makalah ini menganggarkan faktor kelanjutan usia bagi kes pesara kerajaan yang masih hidup dan juga meninggal dunia pada umur persaraan tertentu; dan menguji impak peningkatan umur persaraan terhadap faktor kelanjutan usia. Berdasarkan dapatan kajian, faktorkelanjutan usia keseluruhan untuk pesara kerajaan yang masih hidup dan meninggal dunia diperhatikan mengurangapabila umur persaraan meningkat.Kata kunci: Pencen terbitan; jangka hayat; faktor kelanjutan usia; liabiliti-liabiliti pencen
 
Publisher Universiti Kebangsaan Malaysia
 
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Date 2012-12-31
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://ejournal.ukm.my/jem/article/view/2708
 
Source Jurnal Ekonomi Malaysia; Vol 46, No 2 (2012): Jurnal Ekonomi Malaysia
0126-1962
 
Language eng
 
Relation http://ejournal.ukm.my/jem/article/view/2708/1775
 
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Rights It is the author's responsibility to ensure that the submitted work does not infringe any existing copyright. Authors should obtain permission to reproduce or adapt copyrighted material and provide evidence of approval upon submitting the final version of a manuscript.