TAFEP Hero 2023 June
human resources online

All 22 recommendations proposed by the Tripartite Workgroup on Older Workers

As affirmed by PM Lee Hsien Loong during his NDR 2019 speech, Singapore is working towards enabling seniors to continue working productively.

As part of this effort, the retirement age and re-employment age will go up, in stages, to 65 and 70 respectively by 2030, while CPF rates will stop tapering down until the age of 60.

These new policies to be implemented stem from the recommendations put forward by the Tripartite Workgroup on Older Workers, which was formed in May 2018.

Given that the Government has accepted the recommendations given by the Workgroup, here's your easy reference to staying on top of the upcoming changes. All 22 recommendations are listed below:

Retirement and re-employment

1. Both the retirement age and re-employment age remain relevant.

2. Both the retirement age and re-employment age should be raised by three years to 65 and 70 respectively.

3. The raising of the retirement age to 65 and re-employment age to 70 should be completed by the end of the next decade (i.e. by 2030).

4. The first increases in the retirement age (to 63) and re-employment age (to 68) should take effect from 1 July 2022.

5. The minimum re-employment contract duration should be retained at one year, to accord businesses some flexibility. Employers are encouraged to offer re-employed workers longer contracts beyond what is required under the RRA.

6. The Employment Assistance Payment formula should be updated and take effect from 1 July 2022.

7. For employees hired at age 55 and over, the qualifying period to be eligible for re-employment should be reduced from three to two years.

8. The Government should continue to work with employers, including public sector agencies, to conduct periodic reviews to ensure the relevance of the current exemptions for specific groups.

9. The Government should provide a wage offset scheme to accompany the raising of the retirement age and re-employment age to 65 and 70 respectively.

Retirement adequacy for older workers

10. Raise CPF contribution rates for workers aged 55 to 70, retaining a stepped reduction in CPF contribution rates by age bands.

  • The total CPF contribution rate for those aged 55 to 60 should be raised to 37% in the longer term.
  • For workers aged 60 to 70, the CPF contribution rate increase should be smaller but meaningful.
  • For workers above 70, the total CPF contribution rate should remain unchanged at 12.5%. Raising CPF contributions risks making these workers less employable, with no significant gains in retirement adequacy, as employers have no obligation to reemploy workers beyond the age of 70.

11. As a first step, the CPF contribution rates should be raised from 1 January 2021. Employers and workers will each increase their contribution by either 0.5%-point or 1%-point.

12. Both employers and workers should be involved at each step of the series of rate increases. This is consonant with the tripartite approach to improving retirement adequacy, with CPF contributions, and Government providing progressive and risk-free interest rates to grow CPF savings.

13. Each subsequent increase in CPF contribution rates should not exceed 1%-point for workers or employers. This will minimise the impact on takehome pay and wage costs. There may be a need to defer the contribution rate increases in some years if economic conditions warrant. While aiming to complete the full increase within a decade, we should also retain the flexibility to stretch the timeline beyond 2030 if necessary.

14. The contribution increases should be fully allocated to the Special Account (SA). This will maximise the interest earned and provide a bigger boost to workers’ retirement incomes.

15. Given the economic slowdown and uncertain outlook, employers feel strongly that the Workgroup’s recommendations are ambitious in scale. The Government should provide transitional support to employers, in the form of one-off wage offsets, to mitigate the higher CPF contribution rates.

Inclusive workforce and progressive workplaces that value older workers

16. Employers should engage mature and older workers in structured career planning sessions. Conversations with mature workers (around age 45) can be centred on their future career plans and potential support from companies, while those with older workers (around age 55) can focus on relevant skills needed for re-employment.

17. Employers should embark on job redesign to effect organisation-wide and systems-level changes so as to (i) increase the number of older workers who can perform the job; and/or (ii) extend upwards the age at which workers can do a job.

18. Employers should be encouraged to provide part-time re-employment opportunities, and commit to do so via their HR policies and employment contracts. The approach should be promotional.

19. Employers should restructure employer-provided medical benefits from GHS schemes to additional MediSave contributions or other flexible benefits. Such MediSave contributions or flexible benefits could be used by employees to purchase portable medical benefits, such as Integrated Shield Plans that ride on MediShield Life.

20. Employers’ determination of a worker’s fitness for work in a particular role should not be based solely on age, but also on the objective assessment of (i) job requirements; and (ii) relevant health or physical conditions that would affect his performance of those job requirements.

21. Employers should implement workplace health programmes that are appropriate for the ageing profile of their workforce. At the same time, the Workgroup calls on workers to take responsibility for their health, keep themselves fit for work, and participate in workplace health programmes.

22. The Government should support employers to undertake key shifts in their HR policies. In particular, to: (i) systematically create part-time opportunities for employees seeking re-employment; (ii) raise awareness of structured career planning sessions, and build capabilities to conduct such sessions; and (iii) support transformational job redesign to overhaul organisation-level systems and processes, so as to benefit more older workers.

Recommendations presented by the Tripartite Workgroup on Older Workers (TWG-OW), formed by Minister for Manpower Josephine Teo


Lead image / Ministry of Manpower Photo / MOM on LinkedIn

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