One of the biggest highlights from Singapore's PM Lee Hsien Loong's National Day Rally (NDR) speech on 18 August was the action plan for raising the retirement and re-employment age, as well as CPF contributions for older workers. All of this is expected to be achieved in gradual steps by about 2030.
Setting the context on Singapore's growing life expectancy (cited at nearly 85 years), he shared that the nation currently has 1,300 centenarians, or people aged 100 and over - compared to 2007 when we had 500 centenarians, whilst speaking at ITE College Central.
"Most seniors in fact do not want to stop working. We are healthy for longer and living longer, but we do not want to spend more years idle in retirement. We want to stay active and engaged, to feel a sense of worth and purpose. Also many of us want to build up a bigger nest egg for when we eventually retire. Therefore, many of us have multiple careers in a lifetime," he explained.
As such, the focus on enabling seniors to continue working productively. "Employers must redesign their training, jobs, and careers around the abilities and strengths of the older workers," he said. " The older workers may not be as strong or quick as their younger colleagues, but this is actually not a problem in many jobs, where we can redesign the job, or we can use technology."
In light of this, he went on to reveal the big programmes on the horizon for older workers as result of the recommendation proposed by the Ministry of Manpower's Tripartite Workgroup on Older Workers.
These four key recommendations for older workers, which the Government accepts in full, are:
- To raise the retirement age from 62 today to 65.
- To raise the re-employment age from 67 today to 70.
- To increase CPF contributions for older workers.
- To achieve all this in gradual steps, by about 2030.
Raising the retirement age and re-employment age
In 2022, the process to raise both the retirement age and re-employment age for all employers will start.
The retirement age will go from 62 today, to 63 in 2022, and eventually to 65 by 2030. Additionally, the re-employment age will go from 67 today, to 68 in 2022, and eventually to 70 by 2030.
Therefore, by 2030, the retirement age will be 65, while the re-employment age will be 70.
Increasing the CPF contributions for older workers
"Today, CPF contribution rates for workers begin to taper down after the workers turn 55. We will raise the rates for workers above 55," said PM Lee.
The first step will be taken in 2021, and subsequent steps after that, given that the whole process will take 10 years or so, depending on economic conditions.
He explained: "By the time we are done, those 60 and below will enjoy the full CPF rates. The CPF rates will only begin to taper down after 60, and level off after 70."
On both the above changes, PM Lee said: "The Government will help businesses to adjust to these new arrangements. We will implement a support package for them and DPM Heng Swee Keat will announce them in next year’s Budget."
The Government is, in fact, looking to take the lead for public officers, whereby the public service will raise its retirement and re-employment Ages one year earlier, in 2021 instead of 2022.
Finally, PM Lee clarified any questions on concerns on CPF withdrawals: "Let me add one last point here, to be absolutely clear: we are not making any changes to CPF withdrawal policies or CPF withdrawal ages. You can still take out some money at age 55. And you can still start your CPF payouts from age 65."
Among the other major announcements, albeit not specific to HR, PM Lee spoke about the following:
- Enhanced preschool subsidies for middle-income families
- Enhanced fee and bursary adjustments for both medical and non-medical courses
- Polders as a possible option to protect Singapore eastern coastline
- Another alternative is to reclaim a series of islands offshore, from Marina East all the way to Changi (joining them up, connecting them up with barrages, and creating a freshwater reservoir)
- Development for the Greater Southern Waterfront (GSW), in order to protect the nation from rising sea levels (remake and take full advantage of the 30km of southern coastline, from the Gardens by the Bay East, all the way to Pasir Panjang,worth about 2,000 hectares of land)
Photo / Prime Minister's Office Singapore