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Time to retire Singapore's retirement age? Not so fast, some experts say

SINGAPORE — With the re-employment age raised to 67 from 65 come July, some have questioned the need for a statutory retirement age as the evolving economy has made it possible for older workers to stay relevant and productive.

SINGAPORE — With the re-employment age raised to 67 from 65 come July, some have questioned the need for a statutory retirement age as the evolving economy has made it possible for older workers to stay relevant and productive.

In Parliament on Monday, Pasir Ris-Punggol GRC MP Zainal Sapari said there is a need to “be bolder to work towards removing the retirement age and allow a worker to work as long as he or she could”.

However, Manpower Minister Lim Swee Say said that doing away with a retirement age would, among other things, affect the career aspirations of younger workers.

Experts TODAY spoke to yesterday were divided on the need for a statutory retirement age — kept at 62 at present — in the current Singapore labour landscape with an ageing workforce and slowing population growth.

Those in favour of retaining a retirement age argued that it serves as a way for businesses to rejuvenate their headcount, while those who oppose said economic productivity is not solely defined by one’s age.

CIMB Private Banking economist Song Seng Wun said the concept of a retirement age has become more ambiguous as the Singapore population has become more educated and technologically savvy, and enjoys longer life expectancy — factors that allow workers to continue contributing meaningfully well into their golden age.

“We are not only going to have uncles and aunties to do menial labour work, but we will have uncles and aunties who know technology, who can use technology and who have skill sets that can still be relevant regardless of how old they are,” he said.

Mizuho Bank’s senior economist Vishnu Varathan said that as Singapore moves towards a knowledge-based economy, many jobs have become less labour-intensive, and this allows elderly employees to be as productive as their younger counterparts.

“Singapore has a large services industry, so sectors like international law, accounting, banking are those that can benefit from the experience of older workers. These are also sectors where knowledge and experience take time to build up and be transferred, so having older workers around longer can better facilitate that knowledge transfer before the younger generation takes over,” he said.

Despite that, Mr Varathan said a statutory retirement age has a key role to play, as it guides certain manpower practices and policies, such as the Central Provident Fund system. And given Singapore’s greying population, the retirement age — if retained — will have to be revised upwards accordingly.

Sharing this sentiment is Mr Erman Tan, president of the Singapore Human Resources Institute, who said that a retirement age serves as a reference point for elderly workers who wish to exit the workforce.

“There needs to be mechanisms (to allow workers to get access) to certain welfare schemes. They still need some sort of exit plan. And hence because of this exit plan, we need to have some indication for this exit point, so a retirement age (is still important),” he said.

UOB economist Francis Tan said a retirement age gives companies an opportunity to rejuvenate their workforce and potentially save costs, too.

“Laying off people can be costly in Singapore, so if there’s a retirement age, businesses have the chance to reset some of their manpower costs and at the same time refresh their headcount with younger workers. There are still certain jobs, such as a deliveryman, where age can make a difference in productivity,” he said.

Ultimately, the challenge is finding the right retirement age, said West Coast GRC MP Patrick Tay, who is also the National Trades Union Congress (NTUC) assistant secretary-general.

“The ideal situation is to get people keen and able to work ... We should provide the platform for them to continue working as long as they want ... But different industries have different demands ... Some industries may be intensive, like oil and gas, so to force them to work (and to) raise the retirement age for them might not effectively help them to continue. If they want to retire, they will ... so it’s something we have to consider carefully to review the needs of our ageing workforce.”

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