Parliament: Re-employment age for older workers to be raised to 67 on July 1 next year

Parliament: Re-employment age for older workers to be raised to 67 on July 1 next year
PHOTO: The Straits Times

SINGAPORE - The Government has finally set the date for raising the age ceiling of re-employment to 67 - July 1 next year.

From that date on, employers will be legally obliged to offer re-employment to eligible workers up to the age of 67, two years older than the age ceiling today.

These workers can also be re-employed with a different company if they agree to it, while a legal provision allowing wage cuts when employees turn 60 will be removed.

Speaking in Parliament during the debate on the Manpower Ministry's budget on Friday, Minister of State Sam Tan said that until the law is changed, the Government will continue to support companies who voluntarily re-employ workers older than 65 with an additional wage offset of 3 per cent.

The date of the raise has been a long-awaited one, finally set in stone 23 years after the Government first announced their goal of raising the retirement age to 67.

Since 2012, employers have been required by law to offer re-employment to eligible workers from when they retire at 62 to when they turn 65, or at the very least give them one-off payments if they cannot re-hire them.

Older workers can also be re-employed by a different company, provided the worker agrees to the transfer and the new employer fully embraces their re-employment obligations.

Said Mr Tan: "We have received feedback that sometimes, employers are unable to find suitable jobs in their own companies, but can help the worker secure re-employment in a related or subsidiary company."

In situations where re-employment is not possible, workers will receive a one-off Employment Assistance Payment (EAP).

Mr Tan said that in line with the raising of the re-employment age, the amounts and age coverage of the EAP will be increased accordingly.

Mr Tan also said that a legal provision to cut employees' wages by up to 10 per cent when they turn 60 was "no longer relevant" as more than 98 per cent of companies here do not make these cuts.

He said: "In the early days, older workers were less wage-competitive because of rigid seniority-based wages. Since then, tripartite partners have worked hard to promote flexible and performance-based wage systems.

"Going forward, pay should be reflective of workers' job scope and value, regardless of age."

He said that in recent years, more than 98 per cent of local employees who wanted to keep working beyond the age of 62 got their wish.

One in three of residents in the labour force is aged 50 and over now, up from one in four a decade ago.

This article was first published on April 8, 2016.
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