Lower, Not Raise Civil Service Retirement Age

 Lower, Not Raise Civil Service Retirement Age

M. Bakri Musa

 

The government’s proposal to raise the mandatory civil service retirement age from 60 to 65 is retrogressive, detrimental not only to the civil service but far more important to Malays and Malaysia. That may seem counterintuitive as the civil service is now almost exclusively Malays.

Instead, lower the retirement age back to 55 as it was until 2000, and increase the incentives for optional early retirement, currently  at age 40 with ten years of service.

            Tun Razak lowered the optional retirement age in the 1970s to encourage young enterprising civil servants to opt for the private sector. That was how Hanafiah, Raslan, and Mohamad formed HRM Accounting, the first such local firm to have global reach.

            Earlier, the colonial British went even further. They imposed no mandatory service for government scholars. Thus, the brilliant enterprising British-trained young lawyer Ma’arof Zakaria from my village of Seri Menanti, Negeri Sembilan, freed from official service obligations, was able to start his Malay National Bank, the first such venture. His bold scheme captured the imagination of Malays. The bank must have been a formidable competitor for Ma’arof was soon found hanged in the jungle. The Brits claimed suicide.

Fast forward to today, imagine had Rafizi Ramli and Nik Nazmi Ahmad been like the majority of their cohorts and remained in the civil service or government-linked companies. What a loss that would have been not only to Malays but also Malaysia.

There is an ironic if not perverse twist to that theme. During the economic crisis of the late 1990s, I met a few atypical Malay students here in California. Atypical because unlike the vast majority, they had graduated from elite universities. They were scheming how to “bomb” their forthcoming job interviews back home. They must have succeeded for they were soon back in America, freed of their service bonds. Those Public Service Commission interviewers even apologized for not being able to accommodate those students!

The civil service favoring Malays is not an unalloyed blessing. Apart from diverting Malays away from the private sector, it also feeds the Malays’ current mentality of depending on the government for everything – jobs, healthcare, and their children’s education. Early optional retirements would help disabuse that.

After the war Italy gave her civil servants early retirement options in an effort to stimulate its devastated economy. Italy went further and allowed senior civil servants to work in the private sector for up to five years with the option of returning to public service. 

When the legendary orthopedic surgeon Dr. Majid Ismail retired in 1976 at 55, he was still young and vigorous enough to start many enterprises. Raising the retirement age would only push those retirees to spend the rest of their post-retirement lives at mosques or golf courses. Even with the current age of 60, they are already too old and set in their ways to be useful in the private sector.

The civil service needs vigorous infusions of fresh talents at the higher levels. Read former Attorney-General Tommy Thomas’s devastating assessment of his top career officials in his recent memoir. He was referring to the professional legal staff. Imagine the caliber of the general administrative staff, the bulk of the civil service. In case the point is missed, Najib and his wife (separately) were successfully prosecuted by outside ad hoc prosecutors, not career government ones. There were also no late withdrawals or DNAAs (Dismissal Not Amounting to an Acquittal) of high-profile corruption cases during Thomas’s tenure.

The civil service is highly in-bred. Most are graduates of non-competitive colleges as typified by its current head. They are less executives and problem solvers, more glorified kerani besar (chief clerks) dutifully awaiting their “Kami menurut perentah!” (We await directions!).

Today’s retirement-at-60 already creates many perverse incentives that would only worsen with increasing the retirement age. Senior officers would be even more consumed with being obsequious to their political superiors in the hope of being appointed to some cushy post-retirement positions in the glut of statutory bodies and government-linked corporations. No wonder those enterprises could not compete in the private sector.

That was Najib Razak’s trick to have top civil servants sign onto his various nefarious lucrative schemes. Former Chief Secretary Sidek Hassan, another graduate of a third-rate American B-school, admitted in court that he “did nothing” as 1MDB director. He was too busy enjoying his booty that far exceeded his already inflated government pay.

As for the fear of losing those few talented personnel by not raising the retirement age, you could always extend their terms on an individual basis.

The expected fiscal saving to delaying the retirement age pales to the benefits of getting rid of dead woods. Besides, incentivizing early retirement might well trigger desperately-needed infusion of Malay talents into the private sector.