16 June 2006

Looks Like Singapore Is Going To Raise the Retirement Age. So?

Singaporeans want later retirement age: Survey
Poll shows 41% ready to work past age of 62

TODAY, June 16, 2006
Sheralyn Tay

Singaporeans are ready and willing to retire past the current retirement age of 62, if the results from a study are anything to go by.

The findings of the retirement study, released yesterday at a forum organised by the Institute of Policy Studies, revealed that 41 per cent of the 1,000 Singaporeans polled want the Government to increase the retirement age.

Among the men, a majority of 29 per cent wanted to retire between 65 and 69 years of age.

Dr Sarah Harper, director of the United Kingdom's Oxford Institute of Ageing, which conducted the survey, said: "The message that is coming out of Singaporean people and the Singaporean employer is that we value older workers and we want to work longer."

Some 900,000 Singaporeans are expected to be over 65 by 2030.

While the mandatory retirement age has not been officially raised, measures are in place to let the older Singaporean work longer if he wishes to.

Recently, the age limit for taxi drivers was raised from 70 to 73.

The labour movement is also working on combining job recreation with skill redevelopment to help workers stay employed longer.

Speaking to reporters at another event, NTUC deputy secretary-general Lim Swee Say said: "Some of the statutory boards started a scheme where workers reaching the age of 62 are allowed to go on a yearly extension, on the condition that they remain healthy and the job performance remains good.

"I think this is the way to go. I think we can go one step further, not just in allowing the daily-rated to continue working upon reaching the retirement age, but to find ways and means to re-create the job so that, as they continue to work, they can be rewarded in a more attractive manner."

Frankly I am not very sure what is the significance of the government raising or not raising the retirement age.

If you need the money, you will want to work. If you like to work, you will also want to work. If you don't need the money and don't like to work, then you won't work.

All of the above holds true, whether you are 45 or 62 or 75 years old.

As for employers, they will employ or offer to employ whoever they think they need, at whatever cost they think they can afford, and at whatever salary they think the employee is worth.

That also holds true - whether the employee is 45 or 62 or 75 years old.

So I have difficulty understanding the significance of the official retirement age. It doesn't really influence the question of whether you can or cannot work. Nor does it necessarily have any effect on an employer's decision as to whether it wishes to employ you or not.

And it is not as if the Singapore government actually starts providing you with any pension or other special benefits when you reach the official retirement age. Only a very small number of Singaporeans (including PAP ministers) actually have any pension rights.

So, as I said, what is the significance of the official retirement age?

Is there anything noteworthy in the Retirement Age Act? Let's see. Section 5 says:

(2) Where a retirement age higher than 60 years is prescribed under section 4 (1), an employer may, from time to time and in accordance with this section, reduce the wages of any of his older employees on or at any time after the employee attains 60 years of age.

(3) An employer who intends to reduce the wages of any of his older employees under this section shall, before the older employee concerned attains 60 years of age or other higher age, as the case may be, give reasonable prior notice in writing to the older employee of his intention to reduce his wages, stating the amount of such reduction and the effective date of such reduction, and giving him a reasonable opportunity of being heard.

(4) If an older employee does not agree with any proposed reduction in his wages, he may either retire or be retired by his employer on or after attaining 60 years of age notwithstanding any of the provisions of this Act.
Frankly, I don't see much practical use in the above provisions. It gives employers the right to reduce older employees' salaries. However, whether an employee is young or old, his employer is always free to say, "Hey, I plan to cut your salary". The reason for the proposed cut? Well, the company may not be doing well, or the employee may not be performing well, or perhaps the company just thinks it's overpaying that employee.

Section 5(3) above says that if the older employee is not happy with the pay cut, he can retire. Well, thank you very much. But if a person is not happy with his job, then whatever age he may be, he always has the right to quit anyway. So Section 5(3) doesn't really give the older employee any rights that he doesn't already have.

The Retirement Age Act supposedly protects older employees from unfair dismissal. If the older employee thinks he's been unfairly dismissed, he can complain to the Minister

Where any employee below 60 years of age or the prescribed retirement age considers that he has been unlawfully dismissed on the ground of age, he may, within one month of the dismissal, make representations in writing to the Minister to be reinstated in his former employment.

(2) The Minister may, before making a decision on any such representations, direct an investigating officer in writing to investigate and report whether in his opinion the employee has been unlawfully dismissed on the ground of age.

As I see it, these provisions are also of very limited effect. If you're old but competent and useful, the company will want to keep you anyway. If you're old and incompetent or useless, the company will dismiss you for being incompetent, or because it doesn't need you. And dismissing an incompetent or redundant employee is not an offence.

In the end, I think that the government is just trying to effect a change in mindset. They want to change Singaporeans' perceptions about when is the appropriate age to stop working. They would like to encourage more Singaporeans to retire later.

But really, the truth is that if you are working, you can stop working whenever you can afford to stop working. That could be at the age of 35, or 50, or 65 or 73, or 85, or never.

Conversely, raising the official retirement age doesn't necessarily mean that you will have a job at age 62 or 65 or 70. In fact, nowadays, there's no guarantee that you will have a job, at any age.

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Anonymous said...

Probably a prelude to increasing the CPF withdrawl age..heh heh heh if retirement age is 70 yrs then walah same same for CPF eventually.

Anonymous said...

"...there's no guarantee that you will have a job, at any age." - Very true.

I do think the official retirement age is more for CPF withdrawal requirements than anything else.

Since people are now living longer, those who need money will have to continue to work till retirement age is reached - prolonging the shelf life and economic use of the worker.

Mr Wang, doesn't this sound like Boxer the horse of Animal Farm fame?

On another separate point, it could also be that CPF is not turning out to be as effective as it was intended to be.

Gilbert Koh aka Mr Wang said...

This is a double-edged sword. If govt increases the CPF withdrawal age, it has to pay 4% on S.A for more years.

Many comfortably rich folks wouldn't work past 60 anyway (they can live on their non-CPF savings) yet at the same time enjoy the 4% risk-free return on their CPF S.A for more years ....

Anonymous said...

hmmm 41% is in favour of increasing the retirement age. Shouldnt the report be focusing on the majority 59% who does not want the retirement age to be increased further?

Anonymous said...

I guess if I am in the civil service and age 58 and still has to pay for my mortgage etc etc and am an average worker, I would wish that the govt will not retrench me next year or until I am 62, 65, whatever....ie if my job is not privatised. I think this make sense?

Anonymous said...

The first thought that came into my mind is : Hmmm....why?
There is a few possiblitlies.
1) We enjoy working so much that we want to keep working.
2) If we don't work, life is boring.
3) We have no choice but to keep working as the cost of living in SG is too high.

Which do you think is the main reason?

Anonymous said...

Well, some people dun retire even they are 80 plus.

Somemore, this old man says Singaporeans cannot have democracy because PAP is always right to guide the people.

Question: In what way are the average smart singaporeans less intelligent than the new PAP MPs? Are ordinary Singaporeans "less" than PAP MPs?

Some old man should retire.

Anonymous said...


Dun let PRO PAP people dominate this website.

Everyone just email to the committee

"What make us Singaporean is that we have two alternative MPs in Parliament. They keep us human, give sus hope and defy PAP version of Singapore. They uphold the notion of "democracy" in our consitution and national pledge. My Singapore is NOT PAP Singapore!"

Anonymous said...

There's a very simple answer to the question: if Singaporeans continue to work, they continue to contribute to the CPF.

Dr Oz bloke said...

Mr Wang I think you missed an important point in your analysis.

Yes any employer is welcome to reduce the salary of workers and give whatever reasons they want. But there is no guide or standard for a particular sex, race, language or religion. However there is a guide for a particular age group! (Perhaps they should include in our pledge ..."Regardles of race, language or religion BUT partial to people above 60"!)

What this represents is that across the entire Singapore, all companies are free to and expected to reduce the wages of their workers who turn 60 and above. Now you might say that it's the same with any other worker when his wages are reduced. Well it's NOT the same. For other workers they can quit and go somewhere else and get a different salary they are happy with.

But with workers >60 yrs where ever they go, they will be penalised because of their age because possibly the entire Singapore pays them reduced wages based on the law.

Raising the retirement age actually makes it harder for companies to justify reducing worker's wages based on age.

Personally I agree this "law" should be abolished. Let the market decide for itself. Let the individual's worth be decided on his/her performance and merits rather than on age.

Heck we don't go reducing our older minister's salaries do we? After all we are their "bosses" :wink:

Anonymous said...

Survey poll is unreliable.Do not read too much into its findings.Anyway it can be tilted to favor the PAP.

Gilbert Koh aka Mr Wang said...

Dr Oz Bloke:

I did think of that, but I also think that your proposition over-relies on the idea that the entire job market will act in concert in suppressing older workers' wages. I don't think that will happen - because most likely employers are going to do a one-up on each other to hire / keep the older but still valuable workers.

Years ago, the 3 biggest law firms in Singapore tried to form a "cartel" to suppress the wages of their youngest lawyers by paying:

exactly the same wages for fresh lawyers,

exactly the same wages for lawyers with one year's experience,

exactly the same wages for lawyers with two years' experience,

and so on,

but the idea broke down as soon as the 4th, 5th and 6th biggest law firms in Singapore got wind of the idea, and began to poach young lawyers by offering higher wages. Then everybody got into a price war and offering higher and higher salaries to keep their young lawyers.

And that's in a relatively closed market, with only a few big players.

If you do a 20% pay cut on a valuable older employee who's just hit retirement age, your competitor may offer him a better salary representing only a 10% pay cut; and then another competitor may offer him a better salary representing only a 5% pay cut; and then another competitor may offer to pay him what you used to pay him before he hit retirement age.

In the end, it's back to supply/demand and the value of the employee's skill/knowledge.

You don't think LKY will accept a pay cut, do you, on the basis that he has long passed the official retirement age.

Anonymous said...

Hear the story.

The stadium was filled excited audiences, some cheering, some screaming, and some mute. A handful are terribly excited, paying more attention to the person of the opposite gender right next to them, instead of the field where they should look. A particularly fat man with a pigtail was busy swatting away flies, mosquitoes and bees that have gathered around him, just like how people gather around the field in the stadium. They have come from all over the country to witness this exciting soccer match between Leafy University and Golot University. The match was about to begin.

Leafy Universty had held on tightly to the champion medal for more than 40 years now, and it looked like they will not give up. On the other hand, Golot University had little victory over its many years of existence. However, strangely, the section of the spectator's stand assigned for the GU supporters were tightly packed, while LU's section boasted only very few spectators and lots of empty spaces, despite the fact that LU actually provided snacks and refreshment for their supporters. Reporters were gathered around the LU players, photographing and interviewing them, while the GU players were busy mingling with the crowd.

Soon, it was time for the players to gather on the field. Players from LU and GU both lined up on the field for all the spectators to see. LU's players were especially well-trained in both the offensive and defensive, with players ranging from 10 years old to 120. GU's players, on the other hand, looked weak. They looked like those kind of dogs that won't bite, and the kind who would gladly help you take your dog out for a walk if you ask them kindly. It looks like this is going to be just another victory for LU.

The referees were actually toilet cleaners from LU. They were specially trained for the event by the LU Soccer Team Coach. Being a top University when it comes to soccer, this move was accepted as LU knows soccer like pig knows mud, and referees specially trained by LU were said to be highly reliable. On the other hand, GU couldn't even afford to hire toilet cleaners. They had to clean the toilets themselves.

Pii! The match has began. The soccer ball flew here and there, crowd cheered and jeered. The fat guy with a pigtail was sent to a hospital because he had sprained his neck. A tiny little bird took flight, following the ambulance and was soon squashed to death by a lorry. Little did the fat guy know that by tomorrow, he will die a slow, painful death because the corpse of the little bird was washed into a reservoir and somehow ended up in his drink.

All these happened but nobody saw of even cared about it. All eyes were on the ball. Only one or two were under someone's skirt. The son of The Rock had his hands under it as well.

Pii! The referee blew his whistle. An argument between a GU university and a referee was in progress.

"Hey I really scored that goal! I kicked it in! It crossed the line!"
"No you didn't."
"Yes I did!"
"No you didn't."
"Yes I did!"
"No you didn't."
"Yes I did!"
"No you didn't."
"Yes I did!"
"Enough of this already! I can show you the footage caught on the video camera!"

The video footage of that GU player NOT scoring the goal was played through the big screen in the stadium. The spectators were quiet. The screen obviously showed that the player did not score that goal.

"Ok. Sorry everyone. I made a mistake."
"Explain to me why you made that claim!"
"I said I am sorry!"
"Noooooooooo. You must explain it to me. Why did you make that claim?"
"I already said I am sorry! Can't we just move along, get on with the match? It was an honest mistake!"
"No, no, no. You said you scored the goal. But you didn't. Tell me, why did you make that claim?"
"I said I am sorry! Sorry, sorry, sorry!"
"No I don't give a shit about your sorry. I am going to give you a red card."

And the player from GU was sent off.

The match resumed and the ball flew here and there once more. The spectators accepted the judgement of the referee quietly and continued watching the match. Needless to say, LU won, as always.

Anonymous said...

Yes, there is no pension but retirement still has some meaning, since withdrawal of CPF depends on it. You can retire whenever you like only provided you have independent means. If you depend mainly on CPF, then you have no choice. Still, the Act says you can retire at 60 regardless, provided your wages are cut and you do not agree with it. You do get to pass Go and you do get to collect your CPF.

No private employer would care about the release of the retiree's CPF. The employee thus has this to enable him to say 'up yours' and retire at 60. But not before.

In cases of unfair dismissal, you can appeal to the minister. But since 40% or so of the economy is in the public sector, there is a good chance the minister in effect is your employer. And if you work in the private sector and look to your union for help, there is a minister in charge there as well.

The CPF of the odd appellant or two should be neither hear nor there to the minister, but if there was any mass unhappiness about waiting ever longer to get your CPF (and so be able to retire), that might be a concern to whoever holds and uses CPF funds. It could be akin to a run on a bank. Effecting a change in mindset might have more than just our individual well-being or aspirations as a motive.

Gilbert Koh aka Mr Wang said...

I could be wrong, but at a quick glance, it seems that right now the CPF withdrawal age is not tied to the official retirement age under the Retirement Age Act (nor to the question of whether you've actually retired or not).

Which means that even if the government changes the official retirement age, this does not immediately or automatically follow that the CPF withdrawal age will change.

As a matter of fact, CPF withdrawal age is the same right now whether you intend to work till you die of old age or whether you're a woman who quit work at age 30 to be a full-time housewife/mother.

(Of course, as the 1st Anonymous commentator has said, raising the official retirement age could be the prelude to changing the CPF retirement age).

On unfair dismissal and the public sector - well, seeing that it is the government itself that is trying to encourage Singaporeans to retire later, I think it's unlikely that the government will turn out to be the culprit in unfairly dismissing older employees.

Anonymous said...

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Damn funny too:


or go to www.talkingcock.com

Dr Oz bloke said...

Dear Mr Wang,

Your example regarding the lawyers proves that market forces dictate.

Therefore, why have the law for retirement age at all?

I see no point in having that law. All it does is that it serves as a potential point to discriminate against certain age groups in the workforce.

It would be by far much better to have a law that says that all workers are to be treated equally regardles of race, language, religion or age.

Then let the market decide.

There is simply no argument for having that particular law.

As it is, we the employers of the Ministers have a strong case to lower the wages of certain older ministers based on that law alone.

Why don't we? The argument of course is that the senior ministers are more experienced and their performaces merit their wages.

Going by the same argument the same should be said for any older worker should his performances be good.

But having that law contradicts such thinking.

I say we should abolish that law.

If you want to control CPF withdrawals, then simply have the CPF print rules as such. Don't link it with the retirement age.

If there is some "politcal" reason for linking the two as justification then that's another story.

I thought about the issue a bit longer and realised that if the government came out and said that by raising the retirement age, they were "protecting" the wages of the older workers, that is clearly a misdirection on the authorities part.

If there was truly a desire to protect older worker's wages, then the law should be abolished and replaced with a law that says there is NO DISCRIMINATION against workers of any age.

I think this is just some political ploy.

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