A recent report by the Ministry of Manpower published by the Ministry of Trade and Industry found that after Singapore’s minimum retirement age rose from 62 to 63 from July 1, 2022. With that, the employment rate for those affected went up by 0.4%, for seniors not covered by the policy change.
In addition, the increase in the re-employment age from 67 to 68 also raised the employment rate for affected seniors by 0.7%.
Older and senior workers benefit from extending their hard-earned careers
The increase in retirement and re-employment ages have helped more seniors maintain their careers. According to the study, these age increases have been effective because they “provide legislative protection and set the social norms of retirement for senior employees”.
By shifting expectations among both employees and employers, the extended ages encourage seniors to remain economically active and give organisations greater access to experienced talent.
The report also showed that there were benefits for older and senior workers in knowledge-intensive roles.
For example, within manufacturing and wholesale trade, seniors got to enjoy upskilling or reskilling opportunities, as the extension of legislation protection likely benefited them as firms would only be able to retire them later.
The increase in the retirement age might have also delayed the retirement for two types of senior workers.
The first would be senior workers who were not eligible for a re-employment offer and would have been retired by their employers at age 62, if not for the new legislated retirement age.
The second would be senior workers who had a higher existing remuneration package than the re-employment offer, and would have left at age 62 because their reservation wages were not met.
However, with the raising of the retirement to 63, these senior workers could remain in the workforce for an additional year on their existing remuneration package.
Retirement adequacy is a key factor as well
The report also found that the increase in the retirement age was more effective in raising the employment rate of senior workers who lived in executive flats, condominiums and other apartments.
As these senior workers were more likely to have reached retirement adequacy, they could be less willing to accept lower wages and employment benefits from re-employment.
The extension of legislative protection from the increase in retirement age would have enabled them to maintain their renumeration package and incentivised them to remain in the workforce until 63.
Continued support for senior workers and employers
At their currently defined ages, the updated retirement and re-employment age remains relevant as they collectively provide legislative protection and set the social norms of retirement for senior workers.
Given Singapore’s increasing life expectancy and ageing population, such measures protect senior workers and enable them to work longer if they wish to. This in turn allows employers to meet their manpower needs in a tight labour market.
In addition, the government has recently convened a Tripartite Workgroup on Senior Employment and an Alliance for Action on Empowering Multi-Stage Careers for Mature Workers to review and refresh Singapore’s senior employment policies in two key areas:
- Empowering our senior workers to be productive and employable; and
- Promoting age-friendly jobs and workplaces.
These efforts, taken alongside upcoming increases to the retirement and re-employment ages, should support both senior workers and employers in maximising the potential of Singapore’s senior workforce.
