Both the retirement and re-employment age is set to be raised as the Government, labor unions and employer agreed on the need for these changes, Manpower Minister Josephine Teo said on 5 Mar.
As for how far and how fast the ages should be raised, she said that her Tripartite Workgroup on Older Workers would be working on it.
Mrs. Teo highlighted two main reasons for the change. First, as people enjoy more years of good health, the higher retirement age will motivate both employees and employers to invest in skills upgrading and job redesigning for older workers.
Second, employers usually re-employ eligible workers at the same pay in the same job, with the flexibility to reset jobs and terms to help themselves cope with business uncertainties. Hence, they are more willing to employ older workers.
As employers need to make considerable and flexible arrangements, the workgroup suggested that the increase in the retirement and re-employment ages should be implemented in small steps over time.
Mrs. Teo noted that the workgroup had consulted widely before coming to a consensus to balance views on both sides and to avoid deep distrust and division between the people and the Government.
Rebutting the calls for the statutory retirement age to be removed entirely, Mrs. Teo affirmed her stand, highlighting that the statutory retirement age protects workers from dismissal based on his age.
The workgroup will also look into the Central Provident Fund (CPF) contribution rates for older workers to strike a balance between retirement adequacy and their employment. Mrs. Teo added that the CPF payouts would remain unchanged at 65.
Meanwhile, the ministry is still deciding if the WorkPro scheme – a scheme that funds efforts by employers to make workplaces more age-friendly, should be extended.