MPs call for more support for older workers in debate on proposed raising of retirement and re-employment ages

• The Retirement and Re-employment (Amendment) Bill, if passed, will raise the retirement Age and re-employment age to 63 and 68
• The CPF (Amendment) Bill, on the other hand, will make various amendments to simplify the CPF system
• This includes making it easier for CPF members to receive retirement payouts, and having more streamlined and higher tax relief caps
• MPs call for more support for older workers, given the anxiety of job displacements exacerbated by Covid-19

SINGAPORE — Members of Parliament (MPs) called for more support for mid-career and senior workers to deal with periods of unemployment in between jobs, as structural economic changes will likely disrupt industries and the nature of work in future.

They were speaking in Parliament on Monday (Nov 1) during a debate about the Retirement and Re-employment (Amendment) Bill and the Central Provident Fund (CPF) (Amendment) Bill, which was adjourned and will continue on Tuesday.

The Retirement and Re-employment (Amendment) Bill, if passed, will raise the retirement age and re-employment age to 63 and 68 respectively on July 1 next year, up from 62 and 67 respectively.

The Government has also accepted the recommendations by a workgroup addressing older workers’ issues, consisting of the Government, unions and employers, to raise the retirement and re-employment ages to 65 and 70 respectively by 2030.

“This will support older workers to continue working for longer if they wish to do so and improve their retirement adequacy,” said the Ministry of Manpower (MOM) in a statement.

The Workers’ Party MPs, on the other hand, proposed to abolish the retirement age to let workers choose to work for as long as they are willing and able to.

Elaborating on the proposed Bill in Parliament, Manpower Minister Tan See Leng said raising the retirement and re-employment ages will provide the flexibility for older workers to work longer, but it “does not compel them to do so”.

“Those who do not wish to continue working need not do so, and can enjoy their retirement,” he said.

The CPF (Amendment) Bill, on the other hand, will make “various amendments to simplify the CPF system”, said Dr Tan.

These include making it easier for CPF members to receive retirement payouts, having more streamlined and higher tax relief caps and shortening the duration that CPF assets are retained for those who die.

EMPLOYMENT INCOME SUPPORT

Several MPs suggested that the Government considers providing short-term salary support to assist mature professionals, managers and executives (PMEs).

MP for Jalan Besar Group Representation Constituency (GRC) Heng Chee How said that the retirement age sends “a clear signal” to employers to keep older workers sharp on the job and not cause them to become a liability.

In doing so, more episodes of displacement should be factored in and more help should be rendered when these mature workers are in between jobs.

“This in turn means that workers will need more help in between jobs to tide over as they job-search, and as they re-train,” said Mr Heng, who is also a union representative in the workgroup supporting older workers, being the deputy secretary-general of the National Trades Union Congress (NTUC).

Agreeing, Pioneer MP Patrick Tay said that the Government could consider providing short-term salary support for companies that hire mature PMEs, by providing up to 50 per cent salary funding, capped at S$3,800 per month for six months.

This could “lower the cost and risk for companies to hire this group of PMEs with relevant skills”, said Mr Tay, who is also the assistant secretary-general of NTUC.

KEEPING WORKERS EMPLOYABLE

MPs also questioned if there will be more measures implemented to keep workers employable.

MP for Bukit Panjang Liang Eng Hwa asked whether there will be further measures to counter age discrimination and step-up monitoring of undesirable employment practices following the progressive raising of the retirement age.

He also raised the possibility of introducing a mid-career sabbatical leave “so that workers can stay charged up for a longer working career”.

Nominated MP Janet Ang said that during a worker’s “pre-retirement phase” between 45 and 55 years old, they should be enrolled into mid-career transition programmes.

RETIREMENT AGE SHOULD BE ABOLISHED: WP MPS

Workers’ Party MP Jamus Lim reiterated the party’s stance that the official retirement age should be abolished.

“With no clear retirement age, employers can no longer use the excuse that hiring a worker with a short runway before they are officially forced to retire would be an inferior business decision compared to hiring a younger worker with no such retirement constraint,” said the Sengkang GRC MP.

He added that this is “not a call for our workers to continue working themselves into the grave” but rather “a call to permit workers the freedom to continue to choose to work, at any advanced age, as long as they are able and willing to, and are able to secure a job”.

Agreeing, Aljunied GRC MP Sylvia Lim said the national labour crunch and higher life expectancies, and job redesign are among the other reasons WP is advocating for the removal of a retirement age.

“In our push towards leveraging on technology, it is likely that more jobs in different sectors will be redesigned to be less reliant on physical strength, making them suitable for senior workers to fill,” she said.

SUGGESTIONS TO ENHANCE THE CPF (AMENDMENT) BILL

Members also made suggestions on various aspects of the CPF (Amendment) Bill.

Among other things, the Bill will seek to:

• Make it easier for members to receive retirement payouts. If the Bill is passed, the Ordinary Account and Special Account savings for Retirement Sum Scheme members will be automatically disbursed after their Retirement Account savings are depleted. Presently, those who have depleted their Retirement Account savings have to apply to transfer their Ordinary Account and Special Account savings to the Retirement Account if they want to continue receiving payouts.

• Simplify the rules of various schemes, such as the topping up of retirement sums for loved ones' CPF savings and voluntary contributions to MediSave accounts. For instance, while the tax relief caps under both schemes presently vary, the rules will be simplified so that the combined tax relief cap for both schemes will be set at S$8,000.

• Streamline the CPF system, by shortening the duration of retention of CPF assets of those who die, for example. The Bill will also allow for greater flexibility and efficiency for disbursement of unnominated monies in the event of a CPF member’s death.

While he welcomed these proposed changes, Mr Tay said that there could be more help for self-employed persons to top up their CPF.

For instance, while the public sector under the “Contribute-As-You-Earn” Scheme facilitates the transmission of a portion of payment due to self-employed persons into their respective MediSave accounts, this scheme has not been extended to the private sector.

“If expanded, it would help more freelancers — particularly those who render services to companies in the private sector — keep up with their MediSave contributions and provide greater financial protection against health issues,” said Mr Tay.

West Coast GRC MP Ang Wei Neng added that an employer's CPF contribution rate could be reduced at an older age — at 60 rather than 55, which he says is “arbitrary”. This is given that a worker's productivity “is unlikely to deteriorate significantly when they turn 55 years old”, even for blue-collar workers who are still fit at that age.

Nominated MP Abdul Samad, who is also vice-president of NTUC, asked for CPF payouts to be tagged to the time the worker decides to retire, so that he can “enjoy his retirement years with steady income”.