RE-EMPLOYMENT is a more flexible and effective way to help workers stay employed as long as they are able to, than removing the retirement age, Minister of State for Manpower and Education Gan Kim Yong said on Wednesday.

It also allows both the employer and the worker to make changes to the existing job arrangements when the worker reaches retirement age.

Speaking in Parliament during the debate on the Ministry of Manpower's budget, Mr Gan sought to explain why re-employment offers a mutually beneficial arrangement, which removing the retirement age will not be able to achieve.

'And, even if the worker is retained in the same job, the company may have to adjust his seniority-based wages. This flexibility will allow the company to remain competitive and keep the worker employable.'

With the re-employment legislation to come into place by 2012, he said a tripartite workgroup, led by the Singapore National Employers Federation (SNEF), has been working to encourage and help older workers stay on the job longer and prepare them for re-employment.

He told Parliament that more older workers are employed now than ever before.

Last year, 56 per cent of residents aged 55 to 64 were working, compared to 54 per cent a year ago. This is an increase of about 20,000 people.

'Many of them were formerly economically inactive. This is a significant improvement,' said Mr Gan.

But he said fewer older women remained in the workforce. They make up 39 per cent, compared to 74 per cent for older men.

He noted that a significant number of women leave the workforce in their 30s or 40s. Many of them do not re-join the workforce.

He said the Tripartitite Committee on Employability of Older Workers, of which he is the chairman, is trying to get 2,000 women to re-enter the workforce this year.

The committee is also preparing a set of guidelines to help workers and employers implement re-employment and aims to finalise them by the end of next year.

The tripartite workgroup has also drawn up a checklist of good re-employment practices, and will consult industry and union leaders over the next 12 to 18 months before firming it.

Mr Gan said workers have an equally important role to play to make re-employment work.

'They must be prepared to accept a different job and undergo training for the new job if necessary. They must also be prepared for adjustments in wages and benefits to better reflect the value of the job and their competencies.

'This is particularly so if a significant portion of their wages is seniority based.'

Turning to help for low-wage workers, an issue which has been raised by several MPs, Mr Gah said with strong economic growth, the number of full-time low-wage workers earning $1,200 or less per month fell by 6.6 per cent between 2006 and 2007.

The long-term unemployment rate has also declined from 0.8 per cent December 2006 to 0.4 per cent last December.

'This is comparable to levels last seen before the Asian Financial Crisis. Nonetheless, there are still those who are unemployed or in low-paying jobs because they do not have the skills that are in demand,' he said.

Currently, the CDCs and other Distributed Careerlink Networks (or DCNs) already provide free employment facilitation services to residents who are unemployed or retrenched. The DCNs link job seekers to highly-subsidised WDA training programmes for skills upgrading and re-skilling for new jobs in growth sectors.

The Minister added that job recreation programmes (JRPs) are being implemented in a number of sectors to make the jobs appealing to Singaporeans by enhancing job worth, working conditions, and image of the profession. Last year, more than 15,000 jobs were re-created under this programme.

Low-wage workers can also turn to the Workfare Income Supplement (or WIS) Scheme to stay employed.

The lower CPF contribution rates for low-wage workers improve their employability, while WIS makes up for the lower CPF rates and gives them additional income.

The first WIS payment was made in January this year, with 287,000 workers receiving $146 million. The second payment will be made in April and May this year.