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Wednesday, August 22, 2007

14. Retiring at 65

A new law will come into effect to ensure that Singaporeans stay employed longer.

From 2012, a re-employment law will kick in to make it mandatory for employers to offer re-employment to workers who have reached the retirement age of 62.

As a first step, they will have to offer re-employment for workers up to the age of 65.

This will later be pushed to the age of 67.

While not expecting people to work into their 80s and 90s, Prime Minister Lee Hsien Loong said in his National Day Rally speech on Sunday that retiring at 55 or even 62 is far too early.

Besides educating both workers and employers on the value of older workers and financial incentives, Mr Lee said legislation is also needed.

Countering the suggestion that the government should just raise retirement age to solve the problem, Mr Lee said experience has shown that would not be the right solution.

While the legal retirement age is 62, he said one third of men here have already retired before they hit 62 and many women have retired even earlier.

Moreover, a higher retirement age may discourage employers from hiring older workers.

The better approach, Mr Lee said, is to legislate for re-employment to continue beyond the age of 62.

However, making sure that the employer makes an offer to rehire a worker at the age of 62, does not mean he or she will definitely get the same job at the same pay.

The employer will take into account the worker's performance, health and preferences, as well as the company's needs.

"It's more flexible for both the employers and employees... not necessarily the same job, not necessarily the same pay, but employer has to make an offer, taking into account the worker's performance, his health, his preferences and the company's needs, and both sides work out a win-win arrangement," said PM Lee - Channel NewsAsia.