OLD is gold, some say, but Singaporeans appear to enjoy working even in their twilight years.
More so now that the government has given the green light and Singapore, the world’s second-fastest aging society, has reached an agreement with trade unions and employers to increase the retirement age.
The current retirement age is 62, while companies are required by law to offer eligible employees the option of continuing to work until they are 67 – the so-called re-employment age.
Singapore’s population is the second-fastest aging population after South Korea, according to United Nations figures, and the global financial hub is growing more dependent on its older residents as birth rates fall and foreign labor is restricted.
Manpower Minister Josephine Teo told Parliament that a group consisting of government, trade unions and employers set up to look at the issue last year had reached consensus on the need to raise both thresholds, a spokesman for the ministry confirmed.
The group will now work to establish how far and how fast these thresholds are raised over the next few months, Teo added.
‘VALUABLE POOL OF TALENT’
Kurt Wee, President of the Association of Small and Medium Enterprises (ASME) says: “It’s something that’s been long discussed.”. Adrin Loi, Executive Chairman of Ya Kun Kaya Toast, adds: “This is definitely something that will help the economy.”
Ho Meng Kit, Chief Executive of the Singapore Business Federation, says mature and experienced workers “are a valuable pool of talent to tap” in Singapore’s tight labour market.
Minister Teo further reiterated that raising the retirement and re-employment age will not affect the CPF payout eligibility age, which will remain at 65. “CPF members will be able to withdraw their payouts anytime from age 65.”
The Tripartite Workgroup on Older Workers, initiated by the minister and made up of representatives from the government, labour unions and employers, still needs “a few more months” to come up with detailed recommendations to be submitted to the government.
As Singaporean seniors live longer and healthier, they are challenging the traditional notion of how we can spend the golden years. Obviously, we know some seniors cannot afford not to work, due to financial reasons.
FIVE PERKS TO ENJOY
But for those who are still in good physical condition and have the choice of retiring, here are five perks you will enjoy if you choose to work during your golden years.
# 1 Company Health Insurance: For most multi-national companies (MNCs) and many Small-Medium Enterprises (SMEs), group insurance coverage is a standard benefit for all employees. If you worked for the same company over a long time, your company plan would be covering the illnesses you discovered over your long years of service.
Leaving your company and getting your own private health insurance would mean these conditions will be excluded from coverage. For some, health insurance is extended to the employee’s immediate family too. Replacing these policies can add up to over thousands of dollars, which can be a major consideration for you to continue working.
# 2 Tax Relief: Older workers enjoy higher Earned Income Relief, which means a larger part of their salaries are tax-free. This can be substantial since for most white-collar jobs, peak earning years are near the end of their careers when professionals have many years of experience and extensive networks under their belt.
For those aged between 55 to 59, the Earned Income Relief is S$6,000. For those 60 and above, the figure goes up to S$8,000. This can go up even higher to S$12,000, for those who are able to work in spite of some form of disability.
# 3 Workfare Income Supplement (WIS): For older workers who may not earn enough to be eligible for income tax reliefs, they can benefit from top-ups to their income under the Workfare Income Supplement (WIS). WIS applies to employees or self-employed individuals who are Singaporeans, aged 35 and above or with disabilities, and earn no more than S$2,000 for the month worked.
While the income supplement amount differs depending on individual circumstances, employees aged above 60 can receive up to S$3,600 in cash and CPF top-ups per year. This scheme applies to part-time workers too.
# 4 Retrenchment Benefits: For those who worked with the same company for many years, retrenchment benefits on average range from two weeks to a month’s pay for each year of service. If you’ve been in the same company for 20 years, and get compensated one month’s pay per year served, you could be getting over 1.5 years’ worth of your last-drawn salary.
Did you know that retrenchment benefits are also tax-free? Long-term employees might consider holding out for retrenchment, especially if the company appears to be scaling down, but you should not count on it.
# 5 Maintaining The Same Level Of Pay: Older employees retaining the same job and workload should not fear a pay cut, since the government has stated that wages should not be changed just because of age. To support both older workers and employers, the government introduced the Special Employment Credit (SEC). SEC is a wage subsidy for employers, where the government offsets between 3% to 11% of the salary for older workers earning less than S$4,000 a month.
From the perspective of the employer, if you factor in that CPF contributions are lower for older workers, it can cost you less to hire an older worker at the same salary.
Old is gold, indeed. As more workplaces get increasingly elderly-friendly with the widespread adoption of new technologies, it is growingly possible for employees to continue working at an older age.
This applies even to blue-collar workers, as generous subsidies from the government and tight foreign labour quotas encourage companies to embrace older workers.
Says retired principal David Gan of Toa Payoh North: “Older workers who want to enjoy a slower pace of life can consider scaling down their workload, instead of full retirement. This enables them to continue receiving most of the perks listed while holding on to a less stressful job, thus enjoying the best of both worlds.”