Retirement age still relevant in protecting older workers against ‘less progressive’ employers: Tan See Leng

• Manpower Minister Tan See Leng said it is vital to retain the statutory retirement age as a safeguard 
• He addressed some concerns raised in Parliament regarding fair re-employment of mature workers 
• Two amended laws were passed related to the Central Provident Fund, and the retirement and re-employment of older workers
• One is aimed at making it easier for CPF members to receive retirement payouts, for instance
• The other will raise retirement age from 62 to 63 and the re-employment age from 67 to 68 from July 2022

SINGAPORE — The statutory retirement age is still important to safeguard against employers who “might not be as progressive”, said Manpower Minister Tan See Leng. He added that countries with no equivalent of a statutory retirement age do not necessarily have better employment rates for older workers.

Dr Tan was responding to calls by several Members of Parliament (MPs) to do away with the statutory retirement age, during a debate on two draft laws on Tuesday (Nov 2). The Retirement and Re-employment (Amendment) Bill and the Central Provident Fund (CPF) (Amendment) Bill were passed later after the debate.

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

It is the Government’ aim to raise the retirement age to 65 and re-employment age to 70 eventually by 2030. 

The CPF (Amendment) Bill aims to simplify the system by making it easier for CPF members to receive retirement payouts, having more streamlined and higher tax relief limits and shortening the duration that CPF assets are retained for those who die, among other changes. 

Workers’ Party MPs Jamus Lim and Sylvia Lim had reiterated the day before the party’s stance that the official retirement age should be abolished. 

Yio Chu Kang MP Yip Hong Weng from the ruling People’s Action Party suggested that the retirement age could be abolished, noting that several countries such as Australia, Canada, the United Kingdom and the United States have no mandatory retirement age, with exceptions for certain professions. 

Dr Tan said on Tuesday that the tripartite workgroup consisting of the Government, unions and employers who are addressing issues for older workers had “considered this carefully”. 

“It looked at the experiences of other countries and found that countries without the equivalent of a statutory retirement age do not necessarily have better employment rates for senior workers, despite some of them having anti-discrimination legislation.”

He added that some employers may be progressive and take the initiative to abolish retirement ages in their company policies to allow staff members to work as long as they wish, but not all firms are like that. 

“The statutory retirement and re-employment age is still important as a floor and safeguard against employers who might not be as progressive.”

The “continued relevance” of the Government’s approach to retirement age is also supported by data, Dr Tan said. 

For instance, Singapore’s average effective retirement age has risen faster than the average for the Organisation for Economic Co-operation and Development (OECD), which comprises 38 countries. 

DISCUSS CHOICES WITH OLDER WORKERS EARLY

Several MPs also spoke about the need for employers to fulfil their re-employment obligations and ensure that re-employment offers are fair. 

Dr Tan said that employers and employees should be given the flexibility to negotiate adjustments to job roles, wages and benefits, as long as these are reasonable and “based on factors like productivity, responsibilities, skills and the employer’s wage system”. 

He added that the majority of re-employed workers continue on their existing contract or a new contract in the same job, and more than 95 per cent of them in the same job did not experience any cuts to wage and benefits. 

Early communication on re-employment plans is crucial, with guidelines on the re-employment of older employees making it clear that employers should engage their workers at least six months before they reach retirement age.

Mr Patrick Tay, MP for Pioneer, suggested earlier that the Employment Assistance Payment, a one-off payment to help older workers tide over a period of time while they seek alternative employment, could be increased.

Presently, the payment is the equivalent of 3.5 months’ salary, ranging from S$5,500 to S$13,000.

Dr Tan said that the Government, unions and employers have agreed to increase such payment amounts from July next year, “in tandem with growth in general wage levels”. 

CPF MONEY DISTRIBUTED AFTER DEATH

There were also concerns raised by MPs about the CPF (Amendment) Bill, relating to how money in members’ accounts will be disbursed after death. 

The Bill proposed that if a CPF account holder has not made a nomination for money to be distributed to persons of their wish, it will be transferred to the Public Trustee’s Office for disbursement.

The office will then enable an eligible beneficiary to receive the money as a representative on behalf of all other beneficiaries — with the beneficiaries’ consent — for amounts not exceeding S$10,000. 

The Public Trustee’s Office oversees the administration of individual and corporate insolvencies, and other related issues. 

Some MPs argued that there could be a lack of recourse when the appointed representative does not exercise fairness in discussing the distribution, by withholding the money, for instance. 

Mr Edwin Tong, Second Minister for Law, said in response that the representative will be appointed and agreed upon by the list of beneficiaries. 

Should they not be able to agree, then the current claiming process will apply, where the Public Trustee’s Office will distribute the money directly to each of the beneficiaries. 

For those who choose to use the money left in the deceased CPF member’s account for the person’s funeral expenses, Nee Soon GRC MP Louis Ng suggested publishing guidelines or the procedures to help these beneficiaries understand how much funeral expenses the Public Trustee will typically agree to defray. 

Mr Tong said that the relevant information regarding the reimbursement of funeral expenses is already available on the Public Trustee’s Office website, and is capped at S$6,000 for funeral expenses out of the deceased CPF member’s money that was not nominated for distribution.