Good Morning,
Brother Richard Kang, Chairman of U Live Committee for Active Agers
Brother Heng Chee How, Sister Cham Hui Fong
Co-Chairmen of NTUC Re-employment Group
Brothers and Sisters
I am happy to join you today at this National Day Observance Ceremony for Active Agers. National Day is also a good time for us to reflect on current issues. For you, raising the effective retirement age is a key topic.
Today we look at the life cycle as including a number of stages: growing up, becoming educated, working and retiring. But this “last stage – retirement – is mostly an invention of the last 100 years.”Indeed, when we look back at history, we note that until fairly recently, people did not retire – they worked until they could no longer work.
Now the concept of retirement is changing. All over the developed world, the trend is towards people working longer. For the OECD countries, the labour force participation rate of people age 55 to 64 has gone up from 47.6% in 1998 to 53.6% in 2008. People can no longer assume that they can save enough to retire on, because they are living longer, and investments can go awry. Indeed, the recent global downturn has forced 80-year olds in the United States to look for work when their investments were wiped out by the financial melt-down.
The statistics on when people retire in developed countries shows great variation. The generally accepted retirement age is usually the age when people can draw down their pensions. However, some people exit the labour force earlier than the official retirement age, while others exit later. In Austria, employees call it a day at 59 years, six years ahead of the retirement age. In contrast, in Korea, the average man clocks in until he is over 71 – 11 years beyond the official retirement age!
So, quite rightly we should not focus on the retirement age, but on the “effective retirement age”. The effective retirement age tells us how long people actually work.
NTUC Efforts on Re-employment
With Singaporeans living longer, it is important that we enable everyone to work as long as they can, and for as long as they wish to.
When I started work in 1970, like everyone else I looked forward to retiring at 55 because that was when we could draw on our CPF savings. One of my colleagues even did a projection and came to the conclusion that he would be almost a millionaire at 55. When my second child, a boy, came along in 1979, I did a quick mental calculation, and concluded that I could not retire until I was 57 years old because that was when he would have completed his national service and finished his university. That was when I first realised that I may have to work beyond the official retirement age!
In the mid 1980s, most workers still thought that they should retire at 55. My job then, as Director of Industrial Relations, was to persuade them to retire later at 60. I got a hostile reaction. One normally quiet and mild-mannered unionist stood up and blurted out: “I will resign!” She was not just upset by the prospect of deferring a well-earned rest, but also the bruised ego of taking a wage cut because of the seniority-based wage system!
As more and more workers reached 55, there was a change. By the early 1990s, some pleaded with me for help to get their employers to let them continue working, as they found they had commitments and would not be able to cope without income.
So we have had a sea change in attitudes.
Many have since realised that retiring is neither practical nor good for them. Many need the money to finance their longer lives. All know that leading a passive life is not the way to be happy and healthy. A cross-country survey by an insurance company found an interesting response from Singaporeans. In reply to the question “What would you do when you reach retirement age?” they answered “To look for work”! So we must press on with the re-employment of older workers, and helping our seniors age actively. A study by the Japan Silver Human Resources Centre found that the elderly attained greater sense of well-being and social engagement through employment.
Our Labour Movement has been at the forefront of enabling re-employment since 2006. The latest figures, as of end July 2010, show that 9,413 older workers above the age of 62 have been re-employed by unionised companies. This is a 34.5% increase over the 6,999 figure as of end of last year. At the same time, the number of unionised companies practising re-employment has reached a new high of 957, an increase of 128 since the beginning of 2010.
We must press on with these efforts, not only to signal the importance of re-employment to companies, but to help iron out the kinks and practical hurdles faced by companies and older workers, so that re-employment can be achieved smoothly from 62 to 65, then onto to 67 and beyond.
More Efforts Needed on Re-employment Consultation before retirement age
A recent small sample survey by NTUC of 100 unionised companies across various sectors found that most employers are not only aware of the re-employment law but have taken steps to prepare themselves. For example, more than 60% among these companies has performance and medical fitness as re-employment criteria. This is aligned to the Tripartite Guidelines of the Re-employment of Older Employees (Tripartite Guidelines). I hope employees are equally prepared, and are taking care of their health! Almost two-thirds of the companies also give some form of assistance payment when they cannot re-hire their older workers.
At the same time, the review surfaced two areas for strengthening. While 52% of the unionised companies had in place structured consultation processes for their staff approaching the retirement age of 62, the other half have yet to do likewise. Secondly, 30% of the companies already offer re-employment contracts to their employees at least 3 months before retirement age, as recommended by the Tripartite Guidelines. The rest need to put in more work to give their workers more certainty of the re-employment arrangement earlier.
Help is available through the 4R programme by the Singapore National Employers’ Federation targeted at HR, and the Re-equipping Yourself for Re-employment (READY) programme by NTUC and Centre for Seniors targeted at older employees. The course fees for these 2 programmes are heavily subsidised by the Advantage! scheme.
Conclusion
We are celebrating the National Day today at the Pinnacle@Duxton. This is one of the oldest areas in Singapore. But look at it – it is now one of the most valuable and sought after pieces of real estate in Singapore! This did not happen by chance. This upgrading and transformation of value is the result of careful and far-sighted planning, will and determined action.
I am sure that with a clear focus and the willingness to be flexible and practical, an equally exciting transformation can and will be achieved with our aging population.
Happy National Day!
