Singapore raises retirement age to 64 and incentivises re-employment at an older age

As early as 2019, the city-state government was planning to raise the retirement age by 2030 to ensure the labour market remained resilient. Singapore has the third highest employment rate for workers aged 65-69 among OECD countries. Other incentives to employers and employees announced by the Ministry of Manpower.

Singapore (AsiaNews) - From July 2026, the retirement age in Singapore will rise to 64, while the re-employment age will go from 68 to 69. The announcement was made yesterday by Labour Minister, Tan See Leng, after discussions with unions and employers.

In 2019 the government declared for the first time its intention to raise the retirement age to 65 and the re-employment age to 70 by 2030, and then raised the maximum thresholds in 2022 to give companies the time to prepare for change.

“More than nine out of ten senior workers who qualified and wanted to continue working were offered reemployment in 2023,” said Gan Siow Huang, Minister of State for Workforce, adding that hiring older workers would not it will weigh on employers, but the ministry will deploy resources to update skills.

Under the Senior Hiring Credit Scheme, the government compensates the wages of workers aged 60 and over. Furthermore, a rehiring grant will offer up to 125 thousand Singapore dollars (about 85,700 thousand euros) for companies that hire part-time workers who are above retirement age and the funds can also be used for professional training.

The employment rate of workers aged 55 to 64 increased from 66.8% to 70%. However, of the 315 complaints submitted between 2018 and 2022 to the agency that handles workplace disputes of the Ministry of Manpower, 24% related to old age prejudice. Safeguarding workers from layoffs before their legal retirement age is part of the ministry's efforts to create fair and inclusive workplaces, Tan said, outlining the government's goals for 2024. Others include improving the employability of local employees and company productivity.

"Many have asked what keeps me up at night," Tan said, referring to the difficulties the country is facing such as declining birth rates and an aging population, which will weigh on the job market. “If we fail to sustain our productivity over the next 10 years, my concern is that we will face a real decline in economic growth.”

Singapore, which will have one in four citizens aged 65 or older by 2030, has the third-highest employment rate for workers aged 65 to 69 among Organization for Co-operation and Economic Cooperation countries. economic development, added the minister. More and more workers in this age group are joining the workforce, pushing the employment rate up five percentage points over five years, to 48.3 percent in 2023.

To encourage more segments of the population to join the workforce, the Manpower Ministry is taking a multi-pronged approach. Two bills expected to pass in 2024 will discourage discrimination based on traits such as age, race and disability. Furthermore, guidelines regarding flexible working arrangements are expected to be released this year.

Minister Tan then revealed policies that will balance the demand for foreign talent and the greater competitiveness of local employees. A whole series of incentives will be given to employers, who will receive funds not only for worker training, but also for career conversion. Support for unemployed workers will be increased, from 6 thousand to 7,500 Singapore dollars (4,100 - 5,140 euros)

The program will also be open to managers who want to retrain their workers for new roles in the company, and not just to workers who are on the verge of being made redundant.

Regarding the involuntarily unemployed looking for work, the minister reiterated that financial aid is being prepared to support these workers during the job search period: “We are close to defining the parameters of the program and I want to assure the Assembly that we have taken into account best practices around the world,” Tan said. “For example, our payments will be contingent on job seekers committing to actively seeking employment.”