Singapore — Manpower Minister Josephine Teo announced in Parliament on Wednesday (March 3) that the plan to raise the age of retirement and re-employment by July 1 next year will go ahead.
In March 2019, Ms Teo announced that tripartite leaders had reached a consensus to raise the retirement age and re-employment age beyond 62 and 67. She called this a “significant milestone,” as it would serve senior citizens who want to keep on working.
The minister announced the plan would go ahead while speaking during the Ministry of Manpower (MOM) budget debate on Wednesday. She added that the public service will fulfil its commitment to raise the ages a year ahead of legislation for its 146,000 officers on July 1 this year.
She explained that this would “help to keep us on track to raise the retirement age to 65 and re-employment age to 70 by the end of this decade.”
Ms Teo added that raising the retirement and re-employment age will help seniors, add to their savings for retirement and give them the opportunity to work longer.
She also said that, “barring any unforeseen circumstances,” the planned increase of Central Provident Fund (CPF) contribution rates for senior employees will also proceed as planned by Jan 1 next year.
This increase should have taken effect this year but was delayed due to the Covid-19 pandemic. Based on how old the employee is, employers and workers are to contribute either 0.5 percentage point or one percentage point more for employees in the 55 to 70 age group.
The minister also said that one of her ministry’s priorities this year is to help all segments of the workforce, including employees in their senior years, to come out of the pandemic stronger.
She mentioned the disparity in median incomes and funds accumulated in CPF accounts between younger and older workers.
Ms Teo also said that 2020’s $1.3 billion Senior Worker Support Package is aiding employers when it comes to raising the ages for retirement and re-employment.
Since this took effect, 17,000 older employees in 1,700 firms have been supported by this scheme, with yet another $200 million allocated to aid 75,000 more senior workers.
The minister said, “The larger goal is to create the momentum and shape a new norm among employers, where many more companies raise retirement and re-employment ages to 65 and 70, well before 2030.
“A senior worker who can leave the workforce at age 70 instead of 67 and defers the start of his CPF Life payouts accordingly, can get around 20 per cent more per month for life.”
/TISG