Prime Minister Lee Hsien Loong delivered his National Day Rally speech yesterday (August 18), discussing Singapore’s current challenges and the moves the Government will be undertaking to revive the city.
Singapore’s life expectancy at birth is rising to be the longest globally at nearly 85 years, which means about half of Singaporeans can now expect to live longer than that, said PM Lee.
Since Singaporeans are living longer, PM Lee has announced that retirement and re-employment ages will be raised for those who wish to work longer.
The Government will raise the retirement age from 62 to 63 in 2022, and eventually to 65 by 2030.
Meanwhile, the re-employment age will also be raised from 67 to 68 in 2022, and eventually to 70 by 2030.
This means that workers cannot be dismissed on the grounds of age before they reach the retirement age. Employers must also offer eligible staff work up to the re-employment age but with the flexibility to adjust contract terms.
Employers need to look at redesigning their training, jobs and careers around the abilities and strengths of older workers to help them remain employable, stressed PM Lee.
The higher retirement age in 2022 will apply to those born on or after 1 July 1960, and the higher re-employment age will apply to those born on or after 1 July 1955.
For public officers such as those in ministries and statutory boards, the public service will raise the retirement and re-employment ages in 2021.
“I encourage private sector companies which can do the same, also to do so,” he said.
CPF Rates Raised To Build More Retirement Savings
Central Provident Fund (CPF) contribution rates will also be raised for older workers so they can build on their retirement savings.
Starting 2021, CPF rates will be raised for workers above 55.
Rates will only start to taper down after 60, and level off after 70.
The whole process will take about 10 years or so, “but it will depend on economic conditions”, he said.
Once done, those aged 60 and below will enjoy the full CPF rates.
However, there will be no changes to CPF withdrawal policies or ages. CPF members can still withdraw some money at 66, and start their monthly payouts from 65.
These changes — which were recommendations made by the Ministry of Manpower’s Tripartite Workgroup on Older Workers — “will support older workers to continue working longer and to be more financially independent.”
“We are healthy for longer, we live longer, but we don’t want to spend more years idle in retirement. We want to stay active, engaged, feel a sense of worth and purpose… Also, many of us want to build up bigger nest eggs for when we eventually retire,” he said.
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Featured Image Credit: HR in Asia