Amendments were made to the Retirement and Re-Employment Act in Parliament yesterday (Jan. 9), which introduced changes to Singaporeans’ retirement age and their conditions for re-employment.
Amidst the slow economy and labour market, the amendments would benefit older Singaporeans, who are a particularly vulnerable group of workers in the labour market.
Raising the retirement age
From July this year, older Singaporeans, such as our parents and grandparents, will be able to retire at 67 instead of the current age of 65.
New option to be employed by another employer
Employers who are unable to find suitable job positions for their older workers will now be able to transfer the workers to another company.
So, for instance, if Company A is unable to find a suitable job position for a 61-year-old employee, the employee can be transferred to Company B, which has a suitable position for the employee.
However, for the transfer to take place, the following criteria need to be met:
1) The employee has to agree the second company’s employment terms.
2) The second company has to take over all applicable re-employment obligations from the original company.
In the event that the criteria for transfer are not met, the original employer will be required to offer Employment Assistance Payment (EAP) to the worker, if no suitable jobs are found for the employee within the company. EAP can range from S$5,500 to S$13,000 or 3.5 months’ salary.
Removal of option to cut employees’ salary at age 60
Finally, Manpower Minister Lim Swee Say said that the existing option for employers to cut their employees’ salaries at age 60 has been removed.
Previously, employees to hit the age of 60 could possibly suffer pay cuts from their employers. However, with the removal of the option, employers will no longer be allowed to cut their employees’ salaries because they have turned 60.
Here’s Minister Lim Swee Say’s speech in Parliament.