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Retirement, re-employment age to be raised, details being finalised: Josephine Teo

SINGAPORE — Both the retirement age and re-employment age are set to be raised, although when and by how much is yet to be determined, Manpower Minister Josephine Teo said on Tuesday (March 5).

Manpower Minister Josephine Teo said that a tripartite workgroup consulted widely before coming to an agreement to raise retirement and re-employment ages.

Manpower Minister Josephine Teo said that a tripartite workgroup consulted widely before coming to an agreement to raise retirement and re-employment ages.

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SINGAPORE — Both the retirement age and re-employment age are set to be raised, although when and by how much is yet to be determined, Manpower Minister Josephine Teo said on Tuesday (March 5).

A workgroup comprising representatives from the Government, labour unions and the private sector has come to a consensus on the matter and it is a "significant milestone", she said.

But even when the retirement age, now at 62, and re-employment age, now 67, are raised, the eligibility age for Central Provident Fund (CPF) members to get their monthly payouts from their savings will remain unchanged at 65, she added.

Speaking during a debate on her ministry’s budget in Parliament, Mrs Teo said that the workgroup, which was formed in May last year to look into the needs of older Singaporeans, will need a few more months before putting up its detailed recommendations. 

It will also need to reach a tripartite agreement on how far and how fast the retirement and re-employment age should be raised, as well as the CPF contribution rates for older workers.


The workgroup consulted widely before coming to its consensus, speaking to workers and unions and employers and trying to balance views on both sides, Mrs Teo said.

“It must also consider what is right for our country,” she added.

At many points in the process, there were differences. “Should we only raise re-employment age beyond 67 but not retirement age beyond 62? The answer was, in the beginning, not at all clear.”

However, there is now "clear tripartite consensus” and the workgroup believes both ages should be raised, she said.

“I hope Members (of Parliament) realise what a significant milestone this is. The next phase of working out details is equally important.”

The workgroup has cautioned that the increases in the retirement and re-employment ages should be implemented in small steps over time, to allow employers to plan ahead, Mrs Teo said.

It has also urged the regulators to maintain the flexibility of employment arrangements, she added.

“Our economy is diverse, both in terms of business models and operational needs. Workers, too, have different preferences and health conditions. We must therefore avoid being overly prescriptive when setting new rules.”

Mrs Teo added that MOM needs to carefully consider the “timing and pacing” of raising the retirement and re-employment age.

Countries usually make known their intention to raise retirement ages years in advance, she noted. For example, Denmark is set to increase its retirement age from 65 to 68 by 2030.

“For Singapore, we started talking about re-employment in 2007, before it became law in 2012 — five years,” she said.  

Since its legislation in 1993, Singapore’s retirement age has been raised only once, from 60 to 62, in 1999.

In 2012, re-employment legislation was enacted, making it mandatory for employers to offer re-employment for workers who have reached the retirement age until they turn 65. This was raised to 67 in 2017.


The workgroup highlighted two reasons for raising the retirement and re-employment ages.

First, the retirement age remains relevant and should go up beyond 62 because Singaporeans are enjoying more years of good health and remain productive at work. A higher retirement age will motivate both workers and employers to invest in upskilling and redesigning the jobs of older workers.

Second, although most workers who are eligible get re-employed in the same job at the same pay, the flexibility to reset jobs and terms help employers cope with business uncertainties. Employers are more willing to employ older workers because of it.

More than 90 per cent of the workers who are eligible for re-employment and wish to continue working are offered re-employment every year. 

Responding to the suggestion by Non-Constituency Member of Parliament (MP) Daniel Goh to remove the retirement and re-employment age, which he referred to as “artificial expiry date for productive senior workers”, Mrs Teo said that having a statutory retirement age protects workers as employers are not allowed to dismiss a worker on account of his age.

Removing the retirement age from the law would mean that “employers no longer have any obligation to keep their workers up to any age,” she added.

“In other words, any employer can retire any worker at any age.”

Mrs Teo contrasted this with the removal of the retirement age from a company’s human resources policy.

“When a company removes the retirement age from its HR policy manual, it is good news for its workers. It means the company gives a commitment. It will not retire any employee at any age for as long as the employee wishes to continue working,” she said. 

She said the labour MPs understand this crucial difference and so, have called for the retirement age to be raised, instead of being removed.

Mrs Teo said that besides considering the wishes of workers, it is also important to understand what employers need.

Having flexibility in the labour market is one reason why Singapore has been able to keep employment high and unemployment low.

The flexibility benefits workers as companies are not discouraged from hiring them, she noted.

“This does not mean we do away with rules completely. When rules are inadequate, workers’ interests may be compromised. But when rules become too onerous, employment may suffer, which is also not in workers’ interest,” she said.

“The Singapore way is, therefore, always to strike a balance, to be pro-worker and pro-business in all that we do.”


Both current and former labour Nominated MPs welcomed the move to raise the retirement and re-employment age.

NMP Arasu Duraisamy, who had called for the retirement age to be raised to 65 and the re-employment age to 70 during his Budget debate speech last week, lauded Mrs Teo’s announcement.

He told TODAY that his proposed figures were based on feedback from union members.

Former labour NMP K Thanaletchimi said that the move is “slightly overdue”, given that workers themselves have been looking forward to the raising of the retirement age as it gives greater “certainty”.

She added that while increasing the re-employment age is also positive, it does not give as much certainty as the retirement age, because re-employment offers are made on a contractual basis.

With the increase in retirement age, she added that there would be expectation for the Government to consider raising the CPF contribution rates for workers beyond 55 years old.

Rigth now, CPF contribution rates are cut when a worker reaches 55 years old.

Economists told TODAY that the increase in retirement and re-employment ages is inevitable in an ageing population where Singaporeans are also living longer.

“Given the notion of active ageing, many people would want to stay gainfully employed even though they could be past the retirement age,” said Mr Irvin Seah, senior economist with DBS bank. He added that this will also help lighten the “fiscal burden” on the state.

Mr Song Seng Wun, an economist with CIMB Private Banking, said that the increase in retirement and re-employment age could also help alleviate the labour shortage that Singapore is facing.

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Josephine Teo retirement age re-employment

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