Pacing of increases in retirement age and re-employment age carefully deliberated

• The Straits Times (31 August 2019): Why the long wait to implement re-employment changes?

Pacing of increases in retirement age and re-employment age carefully deliberated
- The Straits Times, 7 September 2019

1. We wish to assure Mr Tony Lim (“Why the long wait to implement re-employment changes?”, 31 Aug) that the pacing of increases in the retirement age and re-employment age was carefully deliberated to balance the needs of workers and employers, and agreed to by the Tripartite Workgroup on Older Workers. 
2. 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 remained unchanged at 62 since it was last raised in 1999.
3. Over the next decade, Singapore will be raising both our retirement age and re-employment age to 65 and 70 respectively. At the same time, CPF contribution rates of older workers will also be gradually increased. Collectively, these are significant moves which businesses will need time to adjust to. The Tripartite Workgroup had therefore recommended a phased approach in order to safeguard older worker employability.
4. 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 nation-wide implementation of the first step from July 2022. The retirement age and re-employment age of public officers will be raised to 63 and 68 respectively from July 2022. We also encourage other employers to do likewise if they are able to. This would help them tap on a larger pool of experienced older workers.
5. We also wish to clarify that increases in older workers’ CPF contribution rates are not linked to increases in the retirement age and re-employment age. The first increases will take place from 1 Jan 2021 for CPF contribution rates. The Workgroup recognised that raising older workers’ CPF contribution rates as soon as possible would boost their retirement adequacy. 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

Why the long wait to implement re-employment changes?
- The Straits Times, 31 August 2019

1. When the re-employment age was raised from 65 to 67 in 2017, it was implemented rather quickly. But the move to raise the re-employment age from 67 to 68 will take effect only three years from now, and there’s a 10-year wait for it be raised to 70. Similarly, the increase in retirement age from 62 to 63 will take effect only three years from now. This delay in policy implementation is not inclusive. Older workers of a certain age will not benefit from this new policy.
2. The Government should consider amending the current Retirement and Re-employment Act in the interim to allow private companies to exercise the option of implementing the new retirement age and re-employment age for staff they deem able to contribute.
3. To reduce the financial burden on private companies that want to implement the new policy before its effective date, the Government can de-link the rise in Central Provident Fund (CPF) contribution rates during the interim period.
4. Many, if not most, seeking re-employment do not consider the increase in CPF contribution an important requirement for work.