The retirement and re-employment ages will be raised to 65 and 70 by 2030.
Additionally, the rate of CPF contributions for older workers will be raised during the same period as well.
These were some of the announcements made by Prime Minister Lee Hsien Loong at the National Day Rally on August 18, 2019.
Part of the government's efforts to support older workers
PM Lee stated that these measures were part of the government's efforts to help older workers, and had been recommended by a Tripartite Workgroup, established by the Ministry of Manpower (MOM) in 2018, to study the matter.
In total, four recommendations were made by the Workgroup, consisting of:
- To raise the retirement age from 62 to 65,
- To raise the re-employment age from 67 to 70,
- To increase CPF contributions for older workers,
- To achieve all of this in gradual steps, by 2030.
PM Lee added the government accepted the recommendations in full.
Measures to be gradually implemented
With regard to their implementation, PM Lee stated that it would be done gradually.
Retirement and re-employment ages to be first raised in 2022
Here, PM Lee pointed out that the retirement age will be first raised from 62 to 63, while the re-employment age will be initially raised from 67 to 68, in 2022.
Additionally, these steps will be taken by the public service in 2021, instead of 2022, given that the government is a major employer.
He added that the aim was to have age of retirement pegged at 65 and the re-employment age pegged at 70 by the time of 2030.
First increase in CPF contribution rate to take place in 2021
As for the increase in CPF contribution rates, PM Lee stated that the first increase would take place in 2021, followed by subsequent steps, in a process that could take at least a decade or so, depending on economic conditions.
PM Lee stated that workers above 55 will see their CPF contributions increased, given that currently, their contribution rates begin to taper down after hitting that age.
As such, upon its full implementation, those aged 60 and below will enjoy full CPF contribution rates, while the CPF rates will only taper down after 60 and level off after 70.
PM Lee further stated that the government will also help businesses adjust to the measures by implementing a support package, that will be announced by DPM Heng in Budget 2020.
CPF withdrawal policy to remain unchanged
PM Lee further clarified that the CPF withdrawal age and policy would remain unchanged however.
This meant that:
- Some money can still be taken out at the age of 55,
- CPF payouts can be started from the age of 65, and
- Rumours and WhatsApp messages about the CPF withdrawal policy and age should be ignored as they are fake news, and grounds for the use of POFMA.
He reiterated that these measures were aimed at helping older workers to continue working longer and to be more financially independent.
Top photo by Zenn Tan