Within two years, older workers who want to keep working after turning 65 will be able to do so.
By 2017, the Government will update the law to raise the re-employment age from the current 65 to 67. After the higher age ceiling kicks in, bosses must rehire healthy workers who have performed satisfactorily until they reach age 67, or give them a one-off payment.
The move fulfils a target that the Government set 22 years ago. From as far back as 1993, the Government had made it clear that it wanted Singaporeans to be able to work until 67. Then Labour Minister Lee Boon Yang said in Parliament that the plan was to raise the retirement age to 67 within seven to 10 years, or 2003.
This target would be missed by more than a decade. But there are some reasons for this.
The issue of hiring older workers has always been a contentious one between workers and employers. While workers want to keep working, employers naturally worry about the higher costs and lower productivity associated with an older workforce.
The re-employment age was set at 65 less than four years ago, in January 2012. Raising it too fast risks firms not being able to cope with the change. If pushed too hard, they may even stop hiring workers in their late 50s altogether, for fear of having to continue hiring them in their 60s.
While the re-employment age is set to increase to 67 by 2017, the retirement age remains at 62.
Re-employment after retirement is a relatively new concept. What it means is that workers turning 62 have the choice of retiring or to continue working until the re-employment age ceiling.
Put another way: No company can force its workers to stop working when they turn 62, or fire those who do not want to retire. At the very least, employers have to give them one-off payments if they cannot offer them re-employment contracts.
Older workers have reason to cheer.