Sustainable Retirement & Aged Care – Why it’s not a match made in heaven?

Sustainable Retirement & Aged Care – Why it’s not a match made in heaven?


The Malaysian aged care industry is at its infancy stage. As we are becoming an ageing population, this will thrust the imminent growth of the aged care industry.

Embedding sustainability into the retirement and aged care business model will innovate and drive the growth of the industry. What is currently being discussed and debated over time is the ability of the industry as a whole to meet the growing demand for the aged care at a price, quality and proximity that is acceptable to the community of different levels of income and yet viable for the industry.

There is a profound social shift taking place which requires an equally profound shift in society’s mind set about ageing. Humans have strived for centuries to live longer; to cheat death. But the social change driven by our longer lives brings challenges, and for some, economic opportunities in the healthcare services industry.

Non-existence of a holistic framework for payment options for aged care in Malaysia warrants a strong integrated mechanism to ensure sufficient funding for individual Malaysians to sustain their retirement much less their aged care needs.

Thus, the impending dilemma requires a review of the financing systems currently available in order to formulate integrated retirement plans of aged care that considers the needs of consumers, the business imperatives of providers and the Government’s commitment to provide Malaysians’ sustainable saving choices for their retirement and aged care needs.

Such financing systems for review include cash savings, insurance, Employee Provident Funds (EPF), KWAP, ASB, ASM, Private Retirement Scheme (PRS), investments, properties, SOCSO and other sources including family and charitable sources.

With the engagement of Malaysia’s current economic climate, which continues to see the drop of the ringgit, to the growing necessity of an integrated aged care system, the proverbial elephant in the room needs to be addressed now.

  • How do we overcome the lack of funding from the government and the shortage of aged care services by promoting the industry to private sectors and not-for-profit sectors?
  • Why the need to call for an integrated financial system, products and structure to pay for aged care services due to the financial risk and longevity risk of Malaysia’s aged care needs – i.e. seeking an integrated approach towards funding for sustainability and participation from financial institutions – crucially essential?
  • How and what are the government, authorities and agencies doing to develop an aged care model that enables social sustainability and workforce sustainability?
  • What needs to take place by the regulators, financial institutions and individuals to formulate a financing system for the elderly for financial sustainability and how it can be done?

These are the questions that require effective answers, addressing the pressing need to establish a flexible and seamless aged care industry that provides Malaysians with more choices, control and access to a full range of services, wherever and whenever they need it at an affordable cost.

In other words, sustainability – as defined in the aged care industry – as the creation of an ecosystem which provides a healthy environment to maximise the quality of life.

Work In Isolation

The argument is that up till now, sustainable design and practice pertaining to aged care especially has been focused on components rather than on systems.

We tend to maximise our component of the work in isolation from everyone else’s component. The result of this tendency is that we get highly efficient individual components, but inefficient systems overall and perverse outcomes.

What is eminent is that when we think about sustainability it must be across the whole value chain within the retirement spectrum which includes aged care. This means looking at retirement and aged care provision as a whole and not independently.

In addressing the issue discussed and raised here thus far, Aged Care Group (ACG) is organising the Sustainable Retirement & Aged Care (SRAC) conference with the aim of becoming the catalyst that will create a paradigm shift in which the handling of aged care becomes a community effort.

The infrastructure of human resources, development, medicine, law and policies will come together smoothly as opposed to an individual effort. SRAC’s first objective aims to bridge the gap especially in the areas that pose as obstacles to meeting the growing demands of the ageing population, re-look at models that are available in the current Malaysian landscape to achieve adequate profit or surplus.

Businesses can draw a level of investment for a sustainable business catering to the elderly that matches with their specific care requirements and financial affordability – in short their retirement portfolio.

Secondly, to develop an aged care model that is viable to deliver the highest value to our elderly Malaysians for the identified 3 income levels – the poor, the middle income and the rich. And finally, how to develop products that are able to provide a sustainable financing system for Malaysians to pay for their aged care needs taking into considerations of longevity risks and financial risks of aged care needs.

Source: Smart Investor | September 2015 | Issue 305

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