Model ID: 2b2acd57-f2d2-442b-805a-ada21bd46175
Sitecore Context Id: 2b2acd57-f2d2-442b-805a-ada21bd46175;
Mr Speaker, I stand in support of the two bills, in particular the Retirement and Re-employment (Amendment) Bill, which seeks to increase the statutory retirement and re-employment age to 65 years and 70 years respectively by 2030.
Impact of Increased Lifespan on Singaporean Workforce
Sir, the amendments to the statutory retirement and re-employment ages are a timely one, as Singaporeans are living much longer than ever before. We currently have the world’s third highest life expectancy, with the average Singaporean expected to live till about 83 years old. With better healthcare, this is projected to increase to over 85 in 2040.
As our lifespan increases, it becomes vital that we pay attention to the longevity of our careers. Long gone are the days when it was the norm to join a company and work in the same company for the entirety of one’s career. There is a new saying – “career mobility is the new career stability”, and I know that many of our younger workers, particularly the PMETs, live by this axiom.
But how mobile are the careers of our mature workers? Statistics and ground feedback suggest that it is much harder for mid-career and mature workers to find a new job after being displaced. Among the 34,000 job seekers who sought career coaching help from Workforce Singapore and the Employment and Employability Institute in 2020, 60 percent were above the age of 40 years old. Of these, four out of 10 were unable to find jobs within six months. On the ground, we hear of the deep anxieties that mature workers have if they are displaced, particularly if they are close to the retirement age.
It is therefore important that we place emphasis on our late-stage career mobility when we are young. As we prepare Singaporeans for a longer career, I hope that the Government’s public education campaigns about retirement adequacy can go beyond financial terms, but also on how to secure fruitful and meaningful work when they reach their silver years.
Need to change mindsets of companies when hiring senior workers
Mr Speaker, I am heartened that the Government has put in place many incentive schemes to boost the employability of our seniors. The Minister for Manpower himself touched on them during the Parliamentary sitting last month, where he gave a breakdown of the schemes under the Senior Worker Support Package.
Schemes such as the Senior Employment Credit, the Senior Worker Early Adopter Grant, the Part-time Re-employment Grant and the CPF Transition Grant have helped to keep the employment rate of those aged 55–64 years old at over 67%, and the employment rate of those above 65 at 28.5%.
While these schemes have helped Singapore to maintain relatively high levels of senior worker employment rates, the underlying assumption behind these schemes reflect the societal stereotype – that we need to subsidise employers to hire mature workers. As we extend our retirement and re-employment ages, combined with a rapidly ageing workforce, this will not be sustainable.
We should therefore strive to think of new solutions to encourage companies to view senior workers as assets, not liabilities. Perhaps we could provide corporate tax incentives to companies that significantly invest in senior workers, for example, those that actively hire and train over 30% of its workforce above the age of 55. Or perhaps we could provide co-funding for companies that wish to revamp their workspaces to be more inclusive, especially to the needs of senior workers. Having schemes that go beyond wage subsidies would encourage companies to pay serious attention to investing in their silver workforce.
Financial literacy an important enabler for retirement adequacy
Mr Speaker, as we debate the issue of retirement, it is also important to place an emphasis on retirement adequacy. According to the Mercer CFA Institute Global Pension Index, Singapore has the best retirement system in Asia and ranks 10th in the world. This reflects the strength of our CPF system, particularly the CPF LIFE scheme which ensures that seniors beyond the age of 65 will receive a monthly pay-out no matter how long they live.
However, the latest Household Expenditure Survey conducted in 2019 found that retiree households living in public flats require more than just their CPF pay-outs and most receive money from their children and family members. While CPF LIFE can help to close the gap in retirement adequacy, the scheme is meant to cover a basic level of costs during retirement and may not be sufficient for those who do not properly plan for their retirement needs.
A study published by AIA Singapore in July 2021 reported that 60% of Singaporeans face an uncertain future by not prioritising their retirement planning. This is a worrying trend, and we certainly need to focus on improving the financial literacy of Singaporeans, so that they understand the importance of building a nest egg for their silver years while they are still young.
To help families better plan for their retirement years, the NTUC launched a social enterprise, MoneyOwl, to provide reliable and competent financial advice. MoneyOwl’s financial advisers do not operate on commissions, which means that they do not have an incentive to sell consumers products that they do not need.
Conclusion
Sir, in conclusion, the amendments to the Retirement and Re-employment Act are timely as Singaporeans are living longer than ever before. We must strive to help Singaporeans work longer more meaningfully, if they wish to, by changing the narrative of hiring senior workers into a worthwhile investment instead of a hire that comes with hefty government subsidies.
With that, I support the two Bills.
###
