Everyone has part to play to ensure pioneers need not worry in old age

Everyone has part to play to ensure pioneers need not worry in old age

SINGAPORE - At nearly 49, Singapore may still be a young nation, but her people are ageing fast. There are nearly 405,000 people here aged 65 and above, up from around 250,000 a decade earlier.

President Tony Tan Keng Yam's assurance last week at the opening of Parliament, that the Government would strengthen safety nets and enhance retirement adequacy was no doubt welcome news to the growing ranks of grey.

The second part of the addenda to the President's Address released yesterday evening, titled "Caring Society", provided some details on government plans to bring greater peace of mind to ageing Singaporeans. Among other things, it pledged to:

- Strengthen the Central Provident Fund (CPF) savings scheme.

- Explore ways to extend the re-employment age beyond 65.

- Increase the number of beds in nursing homes and hospitals.

All three promises are crucial to meet old-age needs.

The ability of the CPF savings scheme to meet retirement needs, many fear, has been compromised, with Singaporeans withdrawing more and more for housing in recent years.

A big worry is that the CPF Life scheme - which allows members to receive monthly payments for life when they retire - is not adjusted for inflation.

This needs to be done for the scheme to be an adequate source of retirement income. Now, CPF Life payouts for workers who retire from low-income jobs can be less than $350 per month, well below the subsistence-level public assistance rates.

So it is not surprising that only around one in 10 older Singaporeans opted into the scheme, according to figures released by Manpower Minister Tan Chuan-Jin in March.

Since last year, members have been automatically included in CPF Life if they have at least $40,000 in their Retirement Account when they turn 55 or $60,000 when they turn 65.

As birth rates dive and families shrink, fiscal prudence demands that older workers remain in the workforce for as long as possible.

The Retirement and Re-employment Act, passed in 2011, makes it compulsory for firms to re-hire older workers who are healthy and have a satisfactory work performance from age 62 to 65.

The first batch of Singaporeans re-hired at age 62 in 2011 turns 65 this year. Many among them are keen to continue working.

Given the tight labour market, they are likely to be re-hired but moving forward, the right of a healthy worker to be re-hired beyond 65 must be enshrined in law. Close attention must also be paid to re-hiring terms and conditions.

The law allows employers to cut up to 10 per cent of workers' pay when they turn 60 even if they remain in the same jobs. Manpower Ministry studies of private sector firms in 2011 showed around two in three re-hired workers did not get pay cuts. This number must be tracked regularly and not be allowed to grow.

In fact, as more older workers join the workforce, the legal sanction for firms to cut workers' pay when they turn 60 despite doing the same job should be removed.

Acknowledging eldercare concerns, the addenda to the President's Address also unveiled plans to add 11,000 hospital and nursing home beds.

But with many studies highlighting the benefits of allowing people to age at home rather than in institutions, there is also an urgent need to build up home care and community care options.

There are around 3,000 places at day-care centres for the elderly islandwide, which seems frightfully low, given that there are already close to 260,000 people here aged 70 and above.

But as systems to enable older folk to live, work, retire and be cared for are strengthened, there is also a need for families, businesses, charities and volunteers to each play a part to ensure that Singapore's pioneers get the peace of mind they so richly deserve in the last leg of their lives.

Ageing is both a challenge and an opportunity. And no Government can meet its myriad demands alone.

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