Focus should be on productive use of workers - regardless of age
SINGAPORE is adhering to its ambitious target to progressively raise the retirement and re-employment ages for Singapore workers to 65 and 70 respectively by the end of the decade.
From Jul 1 next year, the retirement age will be raised to 63 and re-employment to 68, though the timing of the subsequent adjustments will be subject to agreement among the tripartite partners of the government, the unions and employers.
With 1 in 5 Singaporeans expected to be 65 or older by 2030, and life expectancy already among the highest in the world, Singapore has been especially proactive towards older workers. Over the years, it has changed its policies to help keep and attract older employees. Introduced in 1993, the retirement age was last raised in 1999, when it went from 60 to 62. The re-employment age was announced in 2007 and legislated in 2012; it was subsequently raised in 2017 from 65 to 67. Employers must generally offer re-employment contracts to eligible employees at age 62 and the contracts must be renewable every year until 67.
Central Provident Fund (CPF) contribution rates for those above 55 will also be raised over time. When the changes are fully implemented, workers aged between 55 and 60 will enjoy the full 37 per cent CPF rate. The CPF rates will begin to taper down only after 60, and level off after 70. At the end of it, the CPF contribution rate of workers aged 60 to 65 - who currently get 16.5 per cent - will go up to 26 per cent. The CPF contribution rate for those between 65 and 70 will rise from 12.5 per cent to 16.5 per cent, while the rate for workers aged 70 and up will remain unchanged at 12.5 per cent.
So far, the government, in consultation with stakeholders, have enhanced the incentives for older folk to continue working longer. But the dark cloud hanging over these efforts is age discrimination at the workplace. Workers who want to work after the statutory retirement age must be given better opportunities to do so, without what for many has been a fairly discouraging, if not altogether unpleasant, transition experience.
Unfortunately that is typically the case. Older workers in the private sector still face subtle discouragement in the form of new employment terms and cuts in benefits. Clearly, equity and progressive foresight in rehiring eligible workers once they hit retirement age is still work in progress.
Government policies can influence employment policies on hiring and retention of older workers by striking the right balance between employment flexibility and business stability. But employers must also manage age diversity within their organisation. Age-inclusive workplace practices must be encouraged. Employers must ensure the most productive deployment of all workers according to capability and capacity, irrespective of their age. This may require the inevitable training and reskilling of older workers to keep up with the demands of the job, and corporate ambitions. Older workers should bear in mind that the salary package they had before they hit their 60s is not an entitlement that will last forever. While many employers take re-employment as an opportunity to reset pay and work expectations, more enlightened ones could assure affected workers that their remuneration will be tied to the value they bring, regardless of age. In fact, this should apply to all workers, not just re-employed older workers. Ultimately, how a country and its people respond to an ageing demographic will determine their society's future. Singapore will be no exception.
