Minister for Manpower Josephine Teo said it is important for “labour constrained” Singapore to increase the pool of workers through measures such as raising the retirement and re-employment ages.
But she acknowledged that the moves to enable seniors to work longer and build up their Central Provident Fund (CPF) savings mean that businesses will have to shoulder higher manpower costs.
The Government unveiled a 55-page report, produced by a tripartite workgroup — of which Mrs Teo was an adviser — that examined these issues on 19 August 2019.
Mrs Teo recognised that businesses face tough times ahead, with “the likelihood of turbulence over the next decade”.
However, she said that there is still a need to provide “some certainty” in making the first incremental move on the changes — raising the retirement age from 62 to 63 and the re-employment age from 67 to 68 by July 2022 — while providing flexibility for changes later.
The eventual goal is to raise both retirement and re-employment ages to 65 and 70 gradually by about 2030, as announced by Prime Minister Lee Hsien Loong at his National Day Rally.
Similarly, for CPF contribution rates, the first change will take effect in 2021, with subsequent ones to be carried out over the next 10 years or so.
Mrs Teo shared that that the timeframes in raising the retirement and re-employment ages as well as the CPF contribution rates, considered the prevailing economic conditions and its possible outlook in the years ahead.
“So, I would say that unless there are very grave circumstances that would change how we look at the retirement age and re-employment age changes, I would say that our determination is towards making those changes,” she added.