KUALA LUMPUR (June 18): There is a need for Malaysia to consider retirement reforms and increase workforce participation among older adults, as the country faces rapid demographic shifts that could weaken long-term economic growth, according to the World Bank.

World Bank social protection and jobs senior economist Dr Matthew Dornan said the country’s old-age dependency ratio is projected to rise — from one retiree per 10 workers to one per four workers by 2050, which will weigh on household finances and public spending.

"This is set to constrain economic growth and lower the tax base relative to what would otherwise have been the case, unless offset by increased labour force participation or by labour productivity improvements," Dornan said while speaking at the International Social Wellbeing Conference 2025 (ISWC 2025), themed "Living to a Hundred: Are We Prepared?" on Wednesday (June 18).

He noted that Malaysia’s employment rate among those aged 50 to 74 was significantly lower than peer economies such as Chile and Mexico, and attributed this in part to early access to retirement savings.

Dornan also highlighted that employers often resist hiring older workers, citing concerns over productivity and health.

However, he said, global evidence indicates that older workers remain economically productive and that multi-generational teams may outperform age-homogeneous ones.

Against this backdrop, Dornan suggested that aligning retirement policy with longer life expectancy — by gradually increasing the minimum retirement age and pension withdrawal age to extend working lives, together with lifelong learning to support older workers — would be beneficial.

Meanwhile, he also highlighted the economic benefits of policy measures that aimed at preventing non-communicable diseases. Among the measures included are improving nutrition through public education, as well as taxing sweetened food and beverages.

Dornan also emphasised the importance of encouraging healthy, active lifestyles and addressing inequities in access to quality healthcare services.