Friday, 23 August 2019

Tripartite Workgroup on Older Workers: A look at the changes to help older workers

Older workers will soon be able to work longer if they wish. The retirement age will gradually go up from 62 to 65, and re-employment age from 67 to 70, between 2022 and 2030. Central Provident Fund (CPF) contribution rates will also rise over the next decade for workers aged 55 to 70. Manpower Correspondent Joanna Seow explains the changes.
By Joanna Seow, Assistant Business Editor, The Straits Times, 22 Aug 2019


A The Tripartite Workgroup on Older Workers was formed in May last year to look at issues concerning older workers. It has representatives from the Government, employers and unions, which is important as employers and workers have different concerns.

For instance, older workers may want the option to work as long as they want, but companies may be worried about ensuring they can contribute productively and also about footing their insurance bills.

The group heard from more than 1,500 people, and the proposals were what was eventually agreed on by both the employer and union sides. It released its report on Monday.


A Singapore's population is greying very fast. By the end of the next decade, 2030, the number of Singaporeans aged 65 and above will almost double to reach 900,000.

The Government wants to get people and companies prepared, both mentally and financially.

A higher retirement age does not mean people must work until that age. They can retire any time they want, but companies cannot dismiss them because of age before the retirement age. So, raising the retirement age extends the protection for older workers.

Businesses will eventually have no choice but to employ more older workers because of demographics. Having this push should encourage them to start looking at how to better allocate resources so their older workers can continue contributing meaningfully to them.


A Higher CPF contributions are meant to help workers save more for their retirement and CPF Life payouts as they can earn up to 6 per cent interest. The additional contributions will go into the Special Account, which accrues the highest possible interest.

For the first increase in CPF rates in 2021, employers and workers will each increase their contribution by either 0.5 percentage point or 1 percentage point for workers aged 55 to 70, based on the worker's age.

For someone who was 55 in January this year and earns $3,000 monthly, both he and his employer contribute 13 per cent, or $390 a month, to his CPF savings. In January 2021, the contribution rates for each party would go up to 14 per cent, or $420 a month. That is $360 more in contributions each year.

To help businesses cope, the Government will announce a support package next year.


A They can redesign more manual jobs so that technology does the tough part and older workers can do higher value-add work. There are also firms which have implemented wellness programmes like health screenings and nutrition advice to help their workers stay healthy.

Some progressive companies have already gone ahead to raise or remove their retirement age. Also, insurance firm Prudential recently announced it will contribute more to older workers' CPF accounts if the workers also contribute more. Workers can choose whether to prioritise having cash for immediate spending or building up more retirement savings in their CPF accounts.

Higher CPF contribution rates for older workers will come from employers and employees; first increment to start in 2021
Additional money will go to Special Account, which accrues highest possible interest
By Joanna Seow, Assistant Business Editor, The Straits Times, 20 Aug 2019

The move to bolster retirement savings of Singaporeans will see both employers and employees paying for the hikes in the Central Provident Fund (CPF) contribution rates for older workers from Jan 1, 2021.

The additional money will go into the Special Account, which accrues the highest possible interest among the CPF accounts.

These are among 22 recommendations made public yesterday by the Tripartite Workgroup on Older Workers, all of which have been accepted by the Government.

The group released its report a day after Prime Minister Lee Hsien Loong said at the National Day Rally on Sunday that CPF contribution rates for older workers will be raised over the next decade or so, so that the full rate of 37 per cent is extended to those aged up to 60 before it tapers off. The rate for workers between 55 and 60 currently stands at 26 per cent.

The retirement age and re-employment age ceiling will also be raised to 65 and 70, respectively, by 2030. They will first go up from 62 to 63, and from 67 to 68, respectively, from July 1, 2022.

PM Lee added that a support package to help businesses adjust to these changes will be announced in next year's Budget.

The workgroup recommended that the Government provide wage offsets to accompany the higher age benchmarks. It also called for one-off wage offsets to mitigate the higher CPF contribution rates.

Manpower Minister Josephine Teo said that the timeline for the changes took into account the changing economic conditions and the need to provide businesses with some certainty.

The tripartite partners agreed that "fundamentally, Singapore is labour constrained, and that is not something that is cyclical in nature", she had told reporters last Saturday.

The workgroup noted that the number of Singaporeans aged 65 and above is projected to almost double and reach 900,000 by 2030.

Giving more details, it said that subsequent increases in the retirement and re-employment ages should be in one-year increments.

For the first increase in CPF rates in 2021, employers and workers will each increase their contribution by either 0.5 percentage point or 1 percentage point for workers aged 55 to 70, based on the worker's age.

For someone who was 55 in January this year and earns $3,000 monthly, both he and his employer contribute 13 per cent, or $390, a month to his CPF savings.

In January 2021, the contribution rates for each such party would go up to 14 per cent, or $420 a month. That works out to $360 more in contributions each per year for employer and employee.

Each further rise in CPF rates will not exceed 1 percentage point for either workers or employers.

The 10-member workgroup heard from over 1,500 people and undertook study trips before making its recommendations.

The workgroup also called on employers to provide part-time re-employment opportunities.

Singapore National Employers Federation (SNEF) president Robert Yap welcomed the proposals, but noted that they come with cost pressures on businesses.

"Hence, on behalf of employers, SNEF calls on the Government to provide some form of support to employers during the decade of the planned changes," he said.



Tripartite Workgroup sought to meet workers' interests while mindful of costs
By Joanna Seow, Assistant Business Editor, The Straits Times, 20 Aug 2019

When the high-level workgroup looking at issues concerning older workers went to the Netherlands for a study trip in January this year, they sat down to discuss the timeframe for the changes they were proposing.

Though they were planning to come to a conclusion before dinner, the meeting ended up stretching through a dinner of cookies until about midnight, labour chief Ng Chee Meng said.

The workgroup of government, employer and union representatives, which was formed in May last year, "had quite a few interesting involved arguments" as it sought to meet workers' interests while ensuring that costs for businesses are kept reasonable, said Mr Ng, who is an adviser to the group.

Fellow adviser Robert Yap, who is president of the Singapore National Employers Federation (SNEF), said that although the discussions were "rough and tough", eventually the concerns of each tripartite party were addressed.

At a news conference last Saturday, members of the Tripartite Workgroup on Older Workers and its secretariat spoke about the considerations that went into the set of 22 recommendations they eventually produced.

For example, National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong said the labour movement consulted workers extensively about the possible impact of higher Central Provident Fund (CPF) contribution rates on their disposable incomes. It found that even those in the relatively lower-income group, earning $2,000 to $3,000, saw the benefits of such a move in improving their retirement adequacy.

"But of course the responsibility that we have and they themselves have is how do they continue to upkeep themselves, and with the hope that companies will still do well and be able to warrant a minimum 1 per cent to 2 per cent (wage) increase," said Ms Cham.

The workgroup also initially considered arguments for abolishing the Retirement and Re-employment Act, but decided against that as the law assures workers of employment until the re-employment age, though they are free to stop working if they want to. Also, countries without a statutory retirement age equivalent, such as Australia and Denmark, do not have better employment outcomes for older workers than Singapore.

The group proposed a three-year increase in retirement and re-employment ages as the health-adjusted life expectancy at age 62 has gone up by more than three years since the retirement age was last raised in 1999.

As for the timeline for the key changes - raising the ages and CPF contribution rates - the group said that as the CPF rate increases have a direct impact on wage costs and take-home pay, the timeline to reach the full increase could be stretched beyond 2030 if economic conditions are poor.

At the same time, Mr Ng, who is NTUC secretary-general and Minister in the Prime Minister's Office, said that if economic conditions improve, the labour movement may request to shift the timeline earlier, "so that the workers' interests are taken care of ahead of what is planned".

Permanent Secretary for Manpower Aubeck Kam, who chairs the workgroup, said that among other countries the workgroup visited which also have plans to raise their retirement ages, none was envisaging anything more ambitious than the kind of pace Singapore will take.

Workgroup member Goh Swee Chen, SNEF's former vice-president, said that from a social aspect, helping workers stay employed for longer enables them to continue contributing to society, while from a business perspective, "you can only prosper if there is stability, cohesion and inclusion in society".

"So, rather than thinking about age as a problem, from a business perspective, it is really a benefit that we could extend a very precious resource here in Singapore for a longer period," she said.

Over half of older workers want to continue full time: Survey
About 25% prefer to stay in current jobs; Centre for Seniors urges more help in career planning
By Sue-Ann Tan, The Straits Times, 22 Aug 2019

About a quarter of older workers want to work and stay in their current jobs, according to a survey of more than 400 workers released by the Centre for Seniors yesterday.

A separate study of around 300 older workers by the centre also showed that more than half wanted to continue working full time.

With such aspirations, the centre said more measures are needed to help older workers plan their careers, after Prime Minister Lee Hsien Loong announced during the National Day Rally speech on Sunday that the retirement and re-employment ages will be raised.

He announced that the retirement age will go up to 63 in 2022, and eventually to 65 by 2030.

The re-employment age will also go up from 67 now to 68 in 2022, and eventually to 70 by 2030.

Centre executive director Lim Sia Hoe said: "Older people say they want to work longer but they do not know how to and what jobs are open to them. There can be mismatches between jobs and older workers because these staff can have certain requests, such as leaving work early. They require life coaching so they know where to go and what resources are available. They also need to know themselves and adjust their expectations."

The centre, a non-profit social service agency, is helping to prepare such workers with its LifeWork course. The course, which can last from one to three days, provides a toolkit for older workers to plan and manage their work-life transition, addressing concerns of career, retirement, health and family at different stages of life, especially at critical age junctions of 55, 62 and 67 years old. Around 3,000 workers from about 40 organisations have attended the course since it was piloted in 2016. A small number of workers also signed up for the course on their own.

The centre also launched a job portal for older workers last year called The portal has around 40 age-friendly employers across industries, such as the food and beverage sector, security, community care, corporate and administrative roles, engineering and delivery services.

It will help to match employers with older workers in suitable roles.

The centre has also developed an employment pathway for mature workers, which includes preparing both workers and employers before allowing for a job trial to ensure the right fit for both sides.

These moves are in line with the recommendation by the Tripartite Workgroup on Older Workers that calls on employers to engage mature workers in structured career planning sessions.

Ms Low Yen Ling, Senior Parliamentary Secretary for Manpower and Education and a member of the workgroup, said: "We hope that employers in the private sector and seniors will also take time to reflect, discuss and talk about how to prepare older Singaporeans to enjoy longer, more productive careers.

"We have to get them talking about re-employment early and not just a year before - 55 is a good age milestone. Such conversations and plans will give employers and seniors time to build up the skills required and help the seniors to build confidence in case he or she is prepared to go into a second career.

"Employers are also generally more aware of the skills needed for the industry, so we hope the employer can guide employees into what courses they should go for, to prepare for career transitions."

Government mindful of cost pressures posed by CPF rate hike: Chan Chun Sing
By Seow Bei Yi, Business Correspondent, The Straits Times, 21 Aug 2019

The Government is aware of business cost pressures posed by an upcoming hike in Central Provident Fund (CPF) contribution rates for older workers, as well as a rise in the retirement and re-employment ages, Trade and Industry Minister Chan Chun Sing said yesterday.

But he stressed that the changes will be implemented gradually, over a period of 10 years or so, while taking into account business conditions at every step of the way.

Speaking on the sidelines of a visit to wholesale distributor Hai Sia Seafood, he added that consultations are ongoing with business partners to understand their challenges, both on business costs and in the larger external environment.

His comments come after Prime Minister Lee Hsien Loong announced at the National Day Rally that CPF contribution rates for workers aged 55 to 70 will be raised gradually from 2021. The hike will see both employers and employees contributing more. There will also be a rise in the statutory retirement age from 62 to 63 in 2022, and to 65 by 2030, and the re-employment age will go up from 67 now to 68 in 2022, and 70 by 2030.

"We are of course very cognisant of the business cost pressures... but we think that it is the correct thing to do to ensure that our workers have sufficient retirement savings," said Mr Chan. "By lengthening careers, it also allows people who live longer the chance to contribute meaningfully to society."

More details on measures to help smaller companies cope will be unveiled closer to next year's Budget, he said, adding that beyond trying to reduce cost, there is also a need to increase businesses' revenue.

He also highlighted the roles that firms and workers have to play in a changing employment landscape.

Companies such as Hai Sia have helped older workers stay employed by redesigning jobs, said Mr Chan. The hope is that other firms and the public sector will do so too.

Workers, too, need to continue retraining and preparing for their next jobs, which will help them be ready for a longer career span.

The issues on older workers have been discussed for many years, Mr Chan said, and tripartite partners share the same concerns on ensuring retirement adequacy and providing meaningful careers over longer time spans.

"The question is, how do we make this transition? If we make it too sharp too fast, it is difficult for the business to adjust, especially in a challenging external economic environment," he said. "If we make it too slow, we will deprive many cohorts of older workers the chance to stay meaningfully employed."

The current plan strikes a good balance, he said.

Mr Ang Junting, deputy director of Hai Sia Seafood, said its ageing workforce and challenges in hiring new staff were key push factors towards job redesign. Its new machines have made it easier for older workers to carry out tasks such as slicing fish more efficiently.

"When it is difficult for us to hire locals, we think about how we can maximise... those who are willing to work in our industry," he said. "We are also actively hiring more older workers."

Public service rolling out more programmes to prepare workers for longer careers ahead of rise in retirement age in 2021
By Sue-Ann Tan, The Straits Times, 20 Aug 2019

The Public Service will be rolling out more programmes to get its officers ready for longer careers, with the earliest to start next month, it said yesterday.

It is also working with training partners to curate a curriculum for mature officers.

These efforts cover job redesign, reskilling, job transitions, workplace health and support for re-employment, among others, said the Public Service Division (PSD).

This move comes after Prime Minister Lee Hsien Loong's announcement during the National Day Rally speech that the retirement and re-employment ages will be raised.

The Public Service will lead by raising the retirement age to 63 and offering re-employment to eligible officers until they turn 68 from July 1, 2021, one year ahead of the national schedule.

More than 2,000 public officers turning 62 and 67 from July 1, 2021, to June 30, 2022, will benefit from this move.

The Public Service has about 145,000 officers.

A new programme to support older officers in managing career transition, retirement, financial planning, health and relationships will be launched next month by the Civil Service College in partnership with the Centre For Seniors.

More than 50 officers have attended the pilot run of the programme earlier this year.

The Civil Service College is also working with training partners to curate a curriculum that supports mature officers in their lifelong learning and employability.

This includes topics such as digital literacy, critical thinking and resilience.

Mr Loh Khum Yean, Permanent Secretary of the PSD and chairman of the college, said: "Our officers will have a longer span of career, potentially spanning a few decades.

"The Public Service will actively invest in providing new skills to our officers, throughout their careers with us, so that they can continually grow as individuals across more than one job in the Public Service."

Minister for Trade and Industry Chan Chun Sing said in a Facebook post: "The Public Service will relook our job designs and career paths to see how we can take into account the desire and ability of those who wish to contribute for a longer career span.

"Our mature workers are a valuable talent pool, and we will do our best to help them (have) meaningful and longer careers."

The college has also curated a growth suite programme, which was launched in May, to help officers working in support functions to develop the mindset, knowledge and skills to navigate the future workplace.

It also offers e-learning modules on a Public Service digital learning platform and classroom training on topics such as cyber security, and communication and collaboration using digital tools.

About 40,000 public officers, including over 10,000 officers aged 50 and above, have participated in such digital literacy programmes.

Mr Ng Thiam Hock, 60, is a public officer who has upskilled to take on different roles.

He is among the first batch of public officers who will benefit from the new retirement age in 2021.

He started out as an electrician in 1985, became a Housing Board clerical officer in 1996, a front-line service counter staff in 2007, and finally a service ambassador from 2015 until now, where he guides customers through electronic transactions and attend to their inquiries.

He said: "Being familiar with using technology helps me to effectively guide residents in conducting their HDB transactions digitally...

"As long as my health permits, I want to keep my mind active and remain in the workforce for as long as possible.

"I am a firm believer that self-improvement is important and that age is just a number.

"Lifelong learning will always be something I believe strongly in."

Time to counter ageism in the workplace
Raising the retirement age is an inevitable policy shift. It's tougher to counter ageism and integrate the silver workforce better.
By Wei-Jun Jean Yeung, Published The Straits Times, 22 Aug 2019

Prime Minister Lee Hsien Loong announced in his National Day Rally speech this year that Singapore will gradually raise the retirement age to 65, and the re-employment age to 70 by 2030.

This is consistent with the trend of postponing the retirement age in most industrialised countries. By 2030, the official retirement age can be expected to be extended to 67 in most Organisation for Economic Cooperation and Development countries. The main motivation for doing so is to compensate for the shrinking working-age population as a result of declining fertility rates since the 1960s.

But this policy change also recognises the fact that human lives are longer, today's older adults are healthier, and many want to remain in the labour market for a longer period of time for financial and/or social-psychological reasons.

Studies suggest that mature workers want to feel valued and respected, and they want opportunities to continue learning and growing.

Many need the income or the healthcare benefits associated with continued employment. According to a recent study in the US, most baby boomers have neither the inclination nor the financial means for early retirement; 80 per cent of them expect to work past age 65.

Singapore currently has the world's longest life expectancy and its working-age population has been declining since the 1960s.

Last year, there were about 4.2 working adults (aged 20-64) supporting each 65-and-above adult, and this support ratio will be halved by 2030, barring increase in immigration.

Mature workers will be the country's major, and valuable, source of talent in the next two decades since there will not be sufficient young workers to meet labour market demands, even with technological advances that improve productivity.

With the median age in Singapore projected to rise from 41.7 last year to 47 in 2030, mature employees will become increasingly commonplace. How to effectively capitalise on the "silver human capital" will be crucial for the country. Done well, older adults become invaluable assets; if not, they can become lost talents and a burden, for the country.

My research with colleagues on China demonstrates that extending the retirement age will have substantial benefit to China's human capital and labour market. It retains a large workforce per year and raises the support ratio significantly. Furthermore, due to the rapid increase in education attainment and improvement in health since the 1950s, the retained workers are increasingly better educated and healthier. The gain in female workers will be particularly significant, reaping the benefits of the education expansion for females. These findings are relevant to Singapore as well.

Supporting older workers who want to continue to work coheres with the concept of "productive ageing" which emphasises that a society should more effectively integrate and engage older adults in activities that generate continuous contribution to family, community and society, including labour activities, caregiving and volunteering.

The MacArthur Study On Ageing shows that engagement in meaningful activities contributes to good health, satisfaction with life, and longevity, as well as provides a potentially effective means of reducing costs of physical and mental illness in later life. Our recent work on productive ageing confirms many of these earlier findings.

There is extensive evidence that shows mature workers are as effective as their younger colleagues since physical disability does not increase and cognitive skills do not decline markedly until between 70 and 80. However, ageism in the workplace continues to work against the employment of older workers.

Discrimination in hiring and pay and disrespect to older workers often lead to their premature retirement. Older workers also often want and need more flexible work arrangements to care for their families and take care of other responsibilities. Employers and government need to work hard together to counter ageism and foster a work culture and environment friendly to a workforce with different age groups.

Older workers also need retraining, so opportunities for lifelong learning in programmes such as the SkillsFuture initiative are important to have. In addition, older workers may need and want more flexibility in using their Central Provident Fund. These concerns are particularly true for older females, who have a much higher level of financial insecurity - with fewer of them working, many working as unpaid labour, and a disproportionately high proportion of Singapore female workers working as cleaners.

Extending the retirement and re-employment ages in Singapore is an inevitable policy trend.

However, for the country to effectively integrate older adults and cultivate the silver human capital to benefit both society and older adults, employers, the Government and workers of all ages need to work together to make many necessary adjustments.

Wei-Jun Jean Yeung is a Provost-Chair Professor at the National University of Singapore (NUS) Department of Sociology, research leader at the Asia Research Institute, and founding director of the Centre for Family and Population Research in the Faculty of Arts and Social Sciences at NUS.

National Day Rally 2019

Tripartite Workgroup on Older Workers releases its recommendations -19 August 2019

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