Finally, PM confirmed at the National Day Rally (NDR) what everyone has been expecting for the longest time:
An increase in the retirement age (RA) and re-employment age (REA) to 65 and 70 respectively by 2030, 11 years from now.
In case you belong to the “govt wants us to work till we die” camp, the changes to RA and REA do not mean that you die die have to work till 65 or 70 years old. If you strike TOTO million-dollar jackpot, marry a millionaire or discover a treasure trove, and want to retire at the age of 30, nobody is stopping you. But if for some reason you still want to work when you are in your silver years, the new RA and REA will give you some sort of added protection.
For example, if RA is 65, it means that your boss cannot anyhowly fire you when you are say, 64, just because he thinks you are “too old”. At REA of 70, employers must give eligible staff work up to this age. But employers will be given some flexibility to adjust the employment terms. In both situations, if your company flouts the rules, you don’t have to suffer in silence and cry in the bathroom when you shower. The laws are there to protect you.
The govt is adjusting these ages because Singapore is greying. By 2030, it will take 2.4 working age Singaporeans to support an elderly who is 65 years old and above, down from 8.4 in year 2000. This means that if we don’t do anything now to make elderly more financially-independent and allow this growing group to continue contributing to Singapore’s economy, the squeeze on the younger Singaporeans from 2030 onwards will be bigger than now. They may have to pay more taxes to support the elderly.
However, these changes are definitely not enough.
The govt always emphasises tripartite partnership when it comes to such employment changes. It’s not a fanciful term that is used to throw people off. It is a reminder that every such change not only requires a change in law by the govt or that it only impacts the workers. The employers are affected too. That’s why the RA, REA and CPF contribution rates have to go up gradually. Because all these are company HR and budget issues which cannot be changed like flipping a switch.
Every such change requires workers, employers and govt to come to a consensus, sometimes some sort of compromise is needed, but eventually an agreement by all for the greater and longer-term good of Singapore. The govt’s role is not an enviable one – it’s the listener (of employers’ and employees’ feedback), the enabler (because it can change laws, give grants or subsidies etc), and the cheerleader (encourage workers and bosses through different assistance and plans) all rolled into one.
Because of this, a strong will from the govt is very important. It sets the tone for everyone to move towards the agreed goal. The announcement is only the first step. Along the way, there will be stragglers, strugglers and outliers, but there will also be leaders, role models and enthusiasts. Changing the law may not always be the toughest. The bigger challenge, sometimes, is getting everyone to understand and experience the merits of the change. This takes time but it has to start somewhere.