In Parliament on Tuesday, January 15, Josephine Teo, Singapore’s Manpower Minister said that the minimum age for eligibility for getting monthly payouts from the Central Provident Fund (CPF) savings will stay at 65.
For now, she added, the Ministry of Manpower’s (MOM)’s focus will be on building a new consensus from employees, employers and the government concerning the ages for retirement and re-employment. She explained that this is due to the concern of workers about working for more years in order to save more.
MP Lee Bee Wah of Nee Soon GRC said that healthy but cash-strapped retirees have asked her about earlier CPF payouts, being ineligible for appeal for medical reasons, and Teo was responding to Ms. Lee.
Teo also told Parliament that over half of the countries in OECD, the Organization for Economic Cooperation and Development, have established their national age for pension withdrawal at 65, or even older, because people are beginning to live longer and longer in these countries.
In certain European countries, the age for pension withdrawal will be raised to 67 in the coming years, in the Netherlands by 2021, in Denmark by 2022 and Germany by 2029.
The Straits Times reports Teo as saying, “So against such a backdrop, we must really ask if it is wise to lower our own PEA (payout eligibility age).”
However, people who are terminally ill or are permanently incapacitated may apply for obtaining their payouts even before they are 65 years old, according to the under the Medical Grounds Scheme. Teo said that most of the applications for this in the last three years have been approved.
When feedback sessions were held by the Tripartite Workgroup on Older Workers, the eligibility payout age did not seem to be a big concern for workers, said Teo, who is an adviser to the group. In 2018, the group started reviewing ages for retirement and re-employment, and also what kind of an impact CPF contribution rates have on retirement adequacy.
Teo said that from talking with union leaders from several industry clusters as well as the private sector, and from having focus group discussions with the public, it appears that what employees want is the chance to work longer and save more money.
“I hear these workers and I understand them, and I want to be able to help make it happen. At the same time, the employers have also expressed their concerns to me. They have worries about their increased obligations,’’ she added.
However, she recognized the need to strike a good balance, since employers have also approached her with their concerns about their own obligations.
This is why, the Manpower Minister said, reaching the consensus about the age of retirement, currently at 62, and the re-employment age, 67, is important.
“The new tripartite consensus is an important one and is the topmost of my priorities this year.”