Govt, unions, employers agree to raise retirement, re-employment age, Latest Singapore News - The New Paper

Govt, unions, employers agree to raise retirement, re-employment age

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The first step for raising the retirement and re-employment ages beyond 62 and 67 respectively has been taken, as the Government, unions and employers have agreed on the need for these changes.

The tripartite consensus is a "significant milestone", said Manpower Minister Josephine Teo yesterday, sharing an update given to her by the Tripartite Workgroup on Older Workers, which has been looking at this issue and others since May last year.

The group will now work towards an agreement on how far and how fast the ages should be raised, she said.

But the age from which Central Provident Fund members can withdraw their payouts will remain unchanged at 65, even when the retirement age and re-employment age are raised, she added.

Mrs Teo told Parliament that the workgroup, to which she is an adviser, believes that a higher retirement age will motivate both workers and employers to invest in skills upgrading and job redesign, as people enjoy more years of good health.

The re-employment age also remains useful. This is the age up to which companies must offer eligible workers re-employment, though they have the flexibility to change job scopes and employment terms.

The workgroup said the increases in the retirement and re-employment ages should be implemented in small steps as employers will need to make considerable adjustments.

It is also critical to ensure employment arrangements remain flexible.

"Our economy is diverse, both in terms of business models and operational needs. Workers, too, have different preferences. We must therefore avoid being overly prescriptive when setting new rules," said Mrs Teo, during the debate on her ministry's budget.

Mrs Teo noted that in many other countries, it has been very hard to move on such issues.

"Deep distrust and division prevents people from focusing on the future... We must try and avoid that and do better," she said, adding this is why the workgroup consulted workers and unions, as well as employers, to balance views on both sides.

Although there have been calls for the statutory retirement age to be removed, including one by Non-Constituency MP Daniel Goh during yesterday's debate, Mrs Teo said such a move would be "bad news" for workers. If the retirement age is removed from the law, employers no longer have any obligation to keep their workers up to a particular age.

Responding to MPs Foo Mee Har (West Coast GRC), Png Eng Huat (Hougang) and Sylvia Lim (Aljunied GRC) who asked about retirement adequacy, Mrs Teo said it is improving, with more than six in 10 active CPF members turning 55 last year being able to meet the Basic Retirement Sum of $85,500.

The issue will be discussed more fully when the workgroup makes recommendations on CPF contributions for older workers later this year, said Mrs Teo.