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Singapore: Government, unions and employers agree to raise retirement, re-employment age
THE Tripartite Workgroup on Older Workers has reached an agreement to lift both the retirement and re-employment age – and Manpower Minister Josephine Teo has given her backing for this “significant milestone”.
“I agree with the Workgroup and I will try my best to make it happen,” she told Parliament on Tuesday during the debate on the government budget.
While there have been concerns by employers that business costs will go up with a higher retirement and re-employment age – currently fixed by law at 62 and 67 years respectively – the reaction from the business community on Tuesday was generally positive.
Alvin Lim, chief executive of Bizlink, said: “It’s a good idea.”
Added Kurt Wee, president of the Association of Small and Medium Enterprises (ASME): “It’s something that’s been long discussed.”
Adrin Loi, executive chairman of Ya Kun Kaya Toast, said: “This is definitely something that will help the economy.”
Ho Meng Kit, chief executive of the Singapore Business Federation, said mature and experienced workers “are a valuable pool of talent to tap” in Singapore’s tight labour market.
Minister Teo said 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.
Mrs Teo, who, together with NTUC Secretary-General Ng Chee Meng and Singapore National Employers Federation president Robert Yap, is an adviser of the Workgroup, said the group will have to build a consensus on how far and how fast the retirement and re-employment age should be increased.
“But a tripartite consensus is emerging,” she said.
She said the Workgroup has agreed that the mandatory retirement age remains relevant and should be lifted. “This is because our people enjoy more years of good health and remain productive at work,” she said. “A higher retirement age will motivate both workers and employers to invest in skills upgrading and job redesign for their older workers.”
The Workgroup has also agreed that the mandatory re-employment age remains relevant and should go beyond 67. Mrs Teo said though most workers who are eligible get re-employed in the same job at the same pay, the flexibility to reset jobs and terms helps employers to cope with business uncertainties. “Employers are more willing to employ older workers because of it.”
The Workgroup has further agreed that increasing the retirement and re-employment age should be done “in small steps over time”. “This is because employers will need to make considerable adjustments,” the minister said. “They must plan ahead and step up efforts to make workplaces more age-friendly.”
Even as the retirement and re-employment age are raised over time, Mrs Teo said, the Workgroup has cautioned that it’s “critical to ensure flexibility of employment arrangements”.
“Our economy is diverse, both in terms of business models and operational needs,” she said. “Workers too have different preferences. We must therefore avoid being overly prescriptive when setting new rules.”
She agreed that careful consideration must be given to the timing and pacing of the move to raise the retirement and re-employment age.
“Countries looking to raise their retirement ages typically make their intentions known five to 10 years in advance,” she said. “Each move is relatively modest.”
She noted that Denmark’s retirement is set to go up from 65 to 68, but will take over 11 years to happen.
In any case, employers such as Eric Cheng, chief executive of property developer ECG Holdings, believes that increasing the retirement and re-employment age “is the right direction” to go.
“We are actually employing people as old as 54, even up to 68; they are very knowledgeable and experienced,” he said.
Ya Kun’s Mr Loi added: “Right now, we’re short of manpower, so I’m fine with raising the retirement and re-employment age. I need more people of that age working for me. We already have 16 to 18 staff who are 65 and above.”
Bizlink’s Mr Lim said he stopped “applying the 62 retirement age a long time ago” in his firm. “As long as the individual wants to work and is productive, we’ve not implemented a retirement age.”
ASME’s Mr Wee said the question of retirement and re-employment age doesn’t matter to small and medium-sized enterprises.
“In the first place, they don’t stipulate a retirement age in their HR policy and most of the time, they continue to hire their workers until such time these workers are unable to remain productive,” he said.
Source: https://www.businesstimes.com.sg/government-economy/singapore-budget-2019/government-unions-and-employers-agree-to-raise-retirement