Adjusting to demographic realities: Govt new initiatives will create challenges for workers and employers
The Government’s new initiatives relating to older workers will create challenges for workers and employers alike. But there is now a road map which provides much-needed clarity. In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong announced that the Government would raise both the retirement and re-employment ages, a move that has long been mooted and debated. In May last year, a Tripartite Workgroup on Older Workers was set up to study the issue. On Monday, the workgroup released its report, based on consultations with stakeholders, including workers, employers and unionists.
The core recommendations were to raise the retirement age from 62 to 65 and the re-employment age from 67 to 70, increase CPF contributions for older workers and to do all of this in gradual steps by 2030. The rationale for these measures is well founded. The number of Singaporeans over 65 is expected to double to around 900,000 by 2030, while the reliance on foreign workers is being progressively reduced. This means that the proportion of older workers in the workforce will have to increase. The adequacy of retirement funding is also an issue. The retirement age was last raised in 1999. Since then, average lifespans have increased by around three years, bringing life expectancy to 84.8 – the highest in the world. Given these realities, the logic of raising the ages for retirement and re-employment, as well as the CPF rates for older workers, is compelling. But this will create challenges for all.
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