Manpower Minister Josephine Teo addressed inquiries about the timeline for the policy and whether these plans are finalised despite Singapore’s mid-term economic hurdles.
To alleviate concerns about the seemingly “rushed” nature of the announcement, Minister Teo said that the manpower work group studied the issues for 15 months and “did not arrive at this date lightly” in reference to the 10-year timeline, according to an initial report by Channel News Asia.
“Knowing that this is a road map, our efforts should be geared towards making it work… I don’t think we’d start off by thinking 2022 doesn’t work; if that’s the case, that wouldn’t be our recommendation.”
The work group is comprised of representatives from the Government, labour unions, and employers.
Minister Teo acknowledged the fact that the Government needs to addresses issues in the labour market as well as monitor how businesses and older employers are coping after the first adjustment.
By July 2022, the retirement age will increase gradually from 62 to 63 years. The final adjustment to age 65 is expected to be applied by 2030.
With the adjustment of the retirement and re-employment ages comes an impending increase of CPF contributions as well. Rates may increase up to 37% for those aged 55 and above in order to prepare Singaporeans to plan for future retirement.
The Singapore National Employers Federation (SNEF) urges the government to provide “some sort of support” to employers regarding the changes. They added that employers need to invest in training and consider part time re-employment opportunities for older workers.
The National Trades Union Congress (NTUC) similarly urged businesses to “take the leadership position” and initiate steps to raise their retirement and re-employment ages without discounting workers’ responsibility to hone relevant skills.
CPF contribution rates will be gradually adjusted, the first of which will be applied by January 2021 and will continue over the next 10 years considering the economic horizon./TISG