Phasing in retirement, re-employment changes helps businesses adjust

An older worker using his handphone outside Raffles Place MRT Station.
An older worker using his handphone outside Raffles Place MRT Station.PHOTO: ST FILE

We thank Mr Tony Lim (Why the long wait to implement re-employment changes?, Aug 31) for his feedback and assure him that the pacing of raising the retirement and re-employment age was carefully deliberated over to balance the needs of workers and employers, and agreed to by the Tripartite Workgroup on Older Workers.

When the concept of re-employment was introduced in Singapore in 2007, the target age of 67 was publicly announced even though the plan was to start with age 65 in 2012.

The re-employment age was eventually raised to 67 in 2017. Throughout this transition, the minimum statutory retirement age has remained unchanged at 62 since it was last raised in 1999.

Over the next decade, Singapore will be raising both retirement and re-employment ages to 65 and 70 respectively. At the same time, Central Provident Fund (CPF) contribution rates of older workers will also be gradually increased. Collectively, these are significant moves which businesses need time to adjust to.

The tripartite workgroup had therefore recommended a phased approach to safeguard older worker employability.

Companies can already voluntarily raise their company-specific retirement age and re-employment age beyond what the law requires.

The public sector has committed to do so one year ahead of the nationwide implementation of the first step from July 2022.

The retirement and re-employment ages of public officers will be raised to 63 and 68 respectively from July 2021.

Other employers are encouraged to do likewise if they are able to. This would allow them to tap a larger pool of experienced older workers.

We also wish to clarify that increases in older workers' CPF contribution rates are not linked to increases in the retirement and re-employment ages.

The first increases will take place from Jan 1, 2021, for CPF contribution rates.

The workgroup recognised that raising older workers' CPF contribution rates as soon as possible would help them have an adequate retirement income.

Subsequent increases will be made after taking into account prevailing economic and labour market conditions.

Lee Pak Sing

Divisional Director

Workplace Policy and Strategy Division

Ministry of Manpower

A version of this article appeared in the print edition of The Straits Times on September 07, 2019, with the headline 'Phasing in retirement, re-employment changes helps businesses adjust'. Print Edition | Subscribe