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Retirement and re-employment ages, CPF rates to go up: PM Lee
THE retirement and re-employment ages will be raised, as will Central Provident Fund (CPF) contribution rates, to enable older Singaporeans to continue working and be more financially independent, said Prime Minister Lee Hsien Loong in his National Day Rally speech, adding that no changes are being made to CPF withdrawal policies and ages.
With Singaporeans living longer and many wishing to work longer, the government will support employers and employees in enabling this, he said. The tripartite workgroup on older workers, set up last year, made four key recommendations that the government is accepting in full.
First, to raise the retirement age from 62 today, to 65. Second, to raise the re-employment age from 67 today, to 70. Third, to increase CPF contributions for older workers. And fourth, to do all the above in gradual steps, by around 2030.
Currently, CPF contribution rates for workers begin to taper down after they turn 55. In 2021, the government will start raising CPF rates for workers above 55 and up till the age of 70.
Eventually, those aged 60 and below will enjoy the same CPF rates as younger workers, and CPF rates will only begin to taper down after the age of 60, levelling off after 70.
The whole process of raising the rates will take about ten years, "but it will depend on economic conditions", said Mr Lee.
In 2022, the retirement age will be raised from 62 to 63. This is the age below which employers are not allowed to retire employees, and at which eligible employees must be offered re-employment. By 2030, the retirement age will be raised to 65.
In 2022, the re-employment age will also be raised, from 67 to 68. This is the age up till which workers are assured that, if eligible, they will be offered re-employment. This re-employment age will eventually be raised to 70.
The public service will take the lead by raising both ages one year ahead, in 2021, said Mr Lee.
And the government will help businesses adjust to these changes with a support package, to be announced in Budget 2020.