New guidelines as re-employment age to be raised from 65 to 67

Singapore employers will also no longer have the option of reducing workers’ wages once they turn 60 years old, under amendments to the Retirement and Re-employment Act.

From July 1 this year, re-employment age in Singapore will be raised from 65 to 67, under amendments made to the Retirement and Re-employment Act passed in Parliament on Monday (January 9).

Citing the previous re-employment age raise in 2012 from 62 to 65, Manpower Minister Lim Swee Say said it has “made a positive impact on the employment of older Singaporeans”.

He said that in 2015, over 98% of private sector local employees who wished to continue working at the age of 62 were offered re-employment.

Similarly, 98% of those who accepted re-employment in the same job also did not experience any drop in basic wages, Lim added.

With the proportion of workers aged 60 and over growing from 5.5% in 2006 to 12% in 2015, tripartite partners agreed to raise the age to 67 after extensive consultations.

Employers will also no longer have the option of reducing workers’ wages once they turn 60 years old.

This option was originally introduced in 1999 with the intention of helping employers with managing the costs of seniority-based wage systems when the retirement age was raised from 60 to 62, said Lim.

Over the years, tripartite efforts have been successful in moving employers away from seniority-based wage systems. Tripartite partners have thus agreed to remove this option starting July 1.

Another key change effective the same date allows eligible employees to be re-employed by another employer, so as to increase options for both the employers and employees.

Lim said the Ministry has received feedback from employers who were unable to find suitable jobs in their own companies for their workers.

Some of these employers would like to secure re-employment for their older workers with another employer, but today’s law does not allow them to transfer their re-employment obligations to another employer.

The new law will allow an employer unable to offer a suitable position within their own entity, to transfer re-employment obligations to another employer.

To prepare employers and employees, the Tripartite Committee on Employability of Older Workers has also revised the Tripartite Guidelines to provide guidance to employers and employees on the implementation of re-employment by another employer.

Of the new changes, Koh Juan Kiat, Executive Director of the Singapore National Employers Federation, a tripartite parner, urged “employers to make early adjustments to their HR practices to further re-employ workers to age 67”.

“(The new law) will remove the possible cutting of wages at age 60 while enlarging the pool of companies that can re-employ a worker reaching the statutory age of 62 beyond his immediate employer, subject to the worker’s express agreement,” said Heng Chee How, Deputy Secretary-General of the National Trade Union Congress.

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