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S’pore retirement age to go up to 64 in 2026, re-employment age to rise to 69
Companies must offer eligible staff re-employment until the age of 69, or employment assistance in its place. PHOTO: ST FILE
Krist Boo
Senior Correspondent
UPDATED
MAR 04, 2024, 05:32 PM
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SINGAPORE - Workers who want to work longer will have longer statutory protection with the raising of Singapore’s retirement age from 63 to 64 on July 1, 2026.
The re-employment age will likewise go up from 68 to 69. Companies must offer eligible staff re-employment until that age, though on adjusted terms if necessary, or employment assistance in its place.
Minister for Manpower Tan See Leng announced on March 4 the timeline for the move, which he said was reached with consensus among the tripartite grouping of his ministry, unions and employers.
The ceilings were last raised in 2022, after the Government said in 2019 that the retirement age would be raised to 65 and the re-employment age to 70 by the year 2030.
The latest implementation date answers the call from some quarters to give businesses and workers ample time to prepare.
Dr Tan said during the debate on his ministry’s budget that his team has its eyes on three broad thrusts this work year: to boost the employability of local workers, shore up retirement adequacy for vulnerable ones and promote fairer and inclusive workplaces – including protecting workers from age-related dismissals before their statutory retirement age.
“Many have asked what keeps me awake at night,” he said, adding that near-term headwinds, falling birth rates and an ageing population are weighing on the labour market.
“If we do not succeed in sustaining our productivity in the next 10 years, my worry is that we will suffer real declines in economic growth.”
To make workplaces fairer and coax more segments of the population into the workforce, the Ministry of Manpower (MOM) is taking a multi-pronged approach.
Two Bills expected to be passed in 2024 will deter discrimination based on traits such as age, race and disability, as well as better protect platform workers.
Guidelines for a clear process on how workers and their bosses should work out flexible work arrangements will also be published in 2024.
In his 45-minute speech, Dr Tan outlined policies aimed at balancing the demands between staying open to foreign talent and making local workers more competitive in the global talent place.
In the latter, the race will not be run by workers alone.
Employers will get help on job redesigning and employee training with four more jobs transformation maps, on top of the current 16 that already cover 1.5 million local workers. These new maps include two of the latest hot industries – generative artificial intelligence and sustainable finance.
Employers will also get more payroll support under the Career Conversion Programmes (CCPs). They can receive up to $45,000 for each worker for a six-month conversion programme.
The maximum salary support for mature or long-term unemployed workers will be bumped up from $6,000 to $7,500 a month, and for other CCP participants it will be raised from $4,000 to $5,000 a month.
The programme will be offered to bosses that want to retrain their workers for new roles in the company, and not just workers who are about to face the chopping block.
On efforts to address why few Singaporeans are in global leadership corporate roles, Dr Tan announced that the Workforce Singapore agency will help fund overseas training stints of Singaporeans under a new Overseas Markets Immersion Programme.
This initiative encourages businesses to send local employees for overseas postings to gain international experience, and complements the Global Business Leaders Programme led by the Ministry of Trade and Industry, which targets the senior ranks.
For jobseekers who face repeat rejections, a financial lift to tide them over their job hunt period is being developed.
“We are close to finalising the scheme parameters and I want to assure the House that we have indeed looked at best practices around the world,” said Dr Tan.
“For example, our pay-outs will be conditional on jobseekers making the effort to actively search for a job.”
Plans to professionalise skilled trades with structured training and career pathways are being studied, beginning with electricians, said Dr Tan.
There is, however, no intention to legislate retrenchment benefits for tradespeople, he said in response to Leader of the Opposition Pritam Singh’s proposal.
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This is consistent with the Government’s approach on retrenchment benefits for all employees. Such a move would compromise the viability of businesses already in financial difficulty, put their existing employees at risk and allow businesses that can afford to pay more to opt for the minimum.
Debunking opposition MPs’ characterisation of retirement adequacy as a “serious and ongoing concern”, Dr Tan said more than seven in 10 active CPF members today have set aside the Full Retirement Sum at age 55 either in cash or in a mixture of property and cash, up from five in 10 a decade ago.
In addition, a suite of boosters and top-ups to retirement savings of older, lower-waged earners, homemakers and caregivers have been made, including the Majulah Package, the Workfare Income Supplement Silver Support Scheme and the Matched Retirement Savings Scheme.
Various MPs had called for letting CPF members make better returns on their CPF funds, to which Dr Tan issued the reminder: “The purpose and intent of the CPF... is for retirement, for housing and for healthcare.”
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The minister took pains to explain the context and impact of the closing of the Special Account (SA) from 2025 for workers aged 55 and up. The move, announced in Budget 2024, has elicited protests from quarters that have been taking advantage of its higher-than-market interest rate with no fixed term.
Only 8,400 members – generally the more well-off – that make up less than 1 per cent of the affected population will not be able to fully transfer their SA savings into their Retirement Accounts (RA).
These members could move their monies to the RA of family members, or withdraw them to grow them outside the CPF system, he said.
Close to 720,000 CPF members have money in their SA that can be withdrawn, and the median withdrawable balance is about $2,000, noted Dr Tan.
The interest difference is about $3 a month if they move these monies into the Ordinary Account (OA), which provides the same liquidity, he said.
Acknowledging that the OA interest rate has remained relatively stable, while yields of market instruments of comparable risk and duration have risen, Dr Tan said the Government will continue to review it periodically.
Giving a longer-term comparison, he said: “On average, the OA interest rate was 1.7 percentage points higher than the 12-month fixed deposit rates from 1999 to 2021.”
How will closing of Special Account impact CPF members when they turn 55?
Budget 2024: Can encouraging more CPF savings crack the retirement code?
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