S'pore should not change plans to raise retirement, re-employment ages: NTUC's Heng Chee How

CPF contribution rates of people 55 to 70 will be gradually raised during this decade until those aged 60 and younger enjoy the full CPF rates.
CPF contribution rates of people 55 to 70 will be gradually raised during this decade until those aged 60 and younger enjoy the full CPF rates.PHOTO: ST FILE

SINGAPORE - The planned increase in Central Provident Fund contribution rates should not be deferred further beyond early next year, said National Trades Union Congress (NTUC) deputy secretary-general Heng Chee How on Thursday (Feb 4).

He added that there also should be no change to plans to raise the statutory retirement and re-employment ages from July next year.

He told the media after meeting mature workers at National University Hospital: "We are still in a (good) position to realise the earlier tripartite agreements on the improvements to the CPF contribution rates (despite the pandemic), as well as to the increase in retirement and re-employment ages."

The increase in CPF rates was initially set to take place on Jan 1 this year but was deferred amid the pandemic to Jan 1 next year.

It will involve employers and workers contributing either 0.5 percentage points or one percentage point more for workers aged 55 to 70, based on the worker's age.

CPF contribution rates of people 55 to 70 will be gradually raised during this decade until those aged 60 and younger enjoy the full CPF rates.

Mr Heng said: "It is important that we do keep pace with implementation because this was not done haphazardly or as a matter of negotiation.

"It was done with a purpose to better enable mature workers to continue to have the chance and the choice to make that contribution and continue to save for their retirement adequacy. This is very important for the labour movement."

He added that the increase in CPF contribution rates was deferred because last year represented an "emergency situation".

"It was because of the circuit breaker and retrenchments that were happening.

"We didn't want a particular segment of workers to be highlighted as becoming more expensive. But on an overall basis, we should not delay."

He added that for the rest of the decade, the situation will still be monitored very closely to gauge the pace of implementing the changes.

Mr Heng also said that the schedule for the raising of the retirement and re-employment ages should not change.

From July next year, the retirement age will be raised from 62 to 63, and the re-employment age from 67 to 68.

This is part of a gradual increase that will ultimately set the retirement age at 65 and the re-employment age at 70 by 2030.

Around 100 unionised companies have agreed to raise the retirement or re-employment ages, or both, ahead of schedule, double the number in 2019, he added.

But this also means older workers have to continue to upskill and undergo training, an area that has become even more vital with the pandemic.

"In working on company training, please do not forget your mature workers," he said.

"Covid-19 makes it abundantly clear... that the future is going to be a lot more digital. So confidence and comfort in using digital tools at a very basic level will become part of the common language that we all have to learn to use. And certainly, older workers should be part of this learning process."

The pandemic also disrupted manpower supply, especially when some foreign workers could not return from their home countries, Mr Heng noted.

"All this reminds us to enable every Singaporean who can and wants to, to be able to make that contribution to the workforce."