More can be done to train older workers with raising of retirement and re-employment age: Tan See Leng

Countries without the equivalent of a statutory retirement age do not necessarily have better employment rates for senior workers. ST PHOTO: KUA CHEE SIONG

SINGAPORE - The latest changes to the laws on retirement and re-employment age and to the Central Provident Fund (CPF) scheme will help people to better prepare for and enjoy their retirement, said Manpower Minister Tan See Leng in Parliament on Tuesday (Nov 2).

But he added that laws are not a panacea and that more work has to be done in training older workers way ahead of time.

With the new changes, the retirement and re-employment ages for Singapore workers will be progressively raised to 65 and 70 years old respectively to support older Singaporeans who wish to continue working to do so.

Meanwhile, various CPF rules will be streamlined and simplified to make it easier for members to receive their retirement payouts and build their nest egg.

Dr Tan said: "Together, the Bills will help our members better prepare for and enjoy their retirement.

"But the work does not stop here. We are confident that further progress on senior worker employment will be made."

For one, investments have to be made in retraining and facilitating employment, not only for older workers but also for future cohorts of senior workers, he said.

Dr Tan also agreed with labour MP Heng Chee How (Jalan Besar GRC) who said on Monday that strengthening the employability of senior workers cannot start only when they are near retirement age.

Initiatives like the company training committees by the labour union and structured career planning conversations are also important in preparing workers, Dr Tan added.

"Continuing education and training is just as important as pre-employment training, as a means for our workers to upgrade their skills, remain relevant, and keep pace with global trends and developments," he said.

Having said that, a statutory retirement age is still needed, Dr Tan noted, in response to remarks by Ms Sylvia Lim (Aljunied GRC), Associate Professor Jamus Lim (Sengkang GRC) and Mr Yip Hon Weng (Yio Chu Kang).

The tripartite work group had looked at other countries and found that those without the equivalent of a statutory retirement age do not necessarily have better employment rates for senior workers, despite some of them having anti-discrimination legislation, he said.

"Some progressive employers may take the initiative to abolish their internal retirement ages and allow workers to work as long as they wish, and we wholeheartedly applaud them," Dr Tan said.

"But as Mr Heng Chee How (Jalan Besar GRC) emphasised, the statutory retirement and re-employment age is still important as a floor and safeguard against employers who might not be as progressive."

Data also supports this, as Singapore's average effective retirement age had risen faster than the average laid out by the Organisation for Economic Cooperation and Development, he added.

"The plan to raise the retirement age and re-employment age to 65 and 70 respectively by the end of the decade is ambitious, but achievable," Dr Tan said, noting that while future adjustments will depend on economic conditions, the "resolve to stay the course is clear".

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Meanwhile, more is also being done to tackle ageism, with progress being made by the Tripartite Committee on Workplace Fairness, which Dr Tan co-chairs. It hopes to finalise recommendations by the first half of next year.

Dr Tan also touched on re-employment, in response to concerns from MPs that such contracts might not always be fair to senior workers.

"The re-employment framework is designed to balance the need to enable senior workers to continue working while giving employers sufficient flexibility so that businesses can remain nimble and sustainable," he said.

He added that the majority of re-employed workers continue on their existing contract or a new one in the same job, and more than 95 per cent employed in the same job did not get cut wages or benefits.

"Early communication and discussion are critical to ensure that re-employment offers are reasonable to both parties," he said, noting that tripartite guidelines say that companies should engage staff at least six months before they reach the retirement age.

"They should offer re-employment to eligible workers who are medically fit to perform any job within the company, not just their existing job role," he added.

Having chronic conditions that do not affect a worker's ability at the job cannot be used to justify denial of re-employment, he said.

"Even as we make these legislative changes today, we will also continue to work with tripartite partners to study best practices and review our framework where necessary to ensure its relevance," Dr Tan concluded.

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