Retirement and Re-employment (Amendment) Bill

Order for Second Reading read.

2.43 pm

The Minister for Manpower (Dr Tan See Leng): Mr Speaker, I beg to move, "That the Bill be now read a Second time".

Mr Speaker, the Retirement and Re-employment (Amendment) Bill is linked to the next Bill on the Order Paper, which is the Central Provident Fund (Amendment) Bill 2021. Both the Bills support our senior workers. With your permission, Mr Speaker, Sir, I would like to propose that the substantive debate on both Bills take place together.

Mr Speaker: Please proceed.

Dr Tan See Leng: Yes. This will allow a more holistic debate. We will still have the formal Second Reading of the CPF (Amendment) Bill to ensure that procedural requirements are dealt with. So, thank you.

Singapore’s labour market is adapting to an older workforce, in tandem with demographic needs. With the support of the tripartite partners, between 2010 and 2019, we have made necessary adjustments to our employment and retirement policies, so that senior workers can continue to work beyond 65 if they wish. We started promoting the concept of re-employment in 2007 and, after extensive outreach, established the re-employment age to be 65 in 2012. We then raised the re-employment age to 67 in 2017.

These innovations in our labour market have helped allow our seniors to remain economically active. By 2020, about a quarter of our resident labour force was aged 55 and above. This is up from 16.5% a decade ago. This has helped more of our senior workers earn more and save more. With CPF LIFE, they have added assurance of a perpetual monthly income in their retirement years.

In 2018, the National Trades Union Congress (NTUC) called for a fresh effort to prepare Singapore's ageing workforce for the future. In response, we formed the Tripartite Workgroup on Older Workers (the Workgroup) to: one, review the longer-term relevance of the retirement age and re-employment age and consider our next moves; two, to examine the CPF contribution rates for senior workers and their impact on retirement adequacy; and three, to promote an inclusive workforce and progressive workplaces that value senior workers.

The Workgroup consulted extensively and presented its recommendations to the Government in 2019. One of its key recommendations was to retain the statutory retirement and re-employment age framework. Under this framework, employers cannot terminate an employee on grounds of age before the statutory retirement age. Workers have the assurance of continued employment up till the statutory re-employment age if they are able and if they wish to do so. At the same time, businesses have sufficient flexibility to adjust re-employment terms, enabling them to continue providing employment opportunities to our senior workers while remaining competitive. It was also observed from other countries' experiences that doing away with the statutory ages does not necessarily lead to higher employment rates.

The Workgroup went on to recommend increasing both the retirement age and re-employment age by three years to 65 and 70, respectively, by the end of the decade. The Workgroup had assessed this to be a realistic goal, considering improvements in health and life expectancy, the better-educated and higher-skilled workers today, as well as enhanced organisational capabilities and capacity to manage our senior workers well. Achieving this by the end of this decade also provides time for employers to adjust.

Another key recommendation of the Workgroup was to raise the CPF contribution rates for workers aged 55 to 70 over the next decade, to boost retirement adequacy for our seniors, even as we provide them with the flexibility to continue working for longer. The increases are to be phased in gradually, taking into account prevailing economic conditions. When completely implemented, the full CPF contribution rates will apply to senior workers up to age 60, compared to 55 today. The rates will step down gradually for workers above 60.

In addition, the Workgroup recommended that employers undertake complementary changes to their policies, processes and practices. Employers should engage mature and senior workers in structured career planning sessions at certain age milestones to plan their future career trajectories as well as training requirements. To encourage more age-friendly workplaces, employers should also embark on job-redesign, as well as provide more part-time re-employment opportunities.

The Government has accepted all of these recommendations.

The Bill today amends the Retirement and Re-employment Act to establish the maximum possible statutory retirement and re-employment ages at 65 and 70 respectively. This reflects the recommendations of the Tripartite Workgroup. The prevailing retirement and re-employment ages will continue to be prescribed by notification in the Gazette. In line with the consensus of the tripartite partners, the Government will prescribe the statutory retirement age and re-employment age to be 63 and 68 respectively. This will be effective from 1 July 2022, that is, next year.

Naturally, employers who wish to move faster are free to do so. In fact, the public sector has already taken the lead, by implementing a retirement age of 63 and a re-employment age of 68 one year earlier on 1 July this year.

Other recommendations of the Workgroup are also being implemented. In particular, the first increase in senior workers' CPF contribution rate will take effect from 1 January 2022. Employees aged 55 to 70 will see an increase in total CPF contribution rates of up to two percentage points. This increase was deferred by a year from the original announced timeline of 1 January 2021 as a nimble move to help employers manage costs amidst the COVID-19 pandemic. The deferment was also supported by the Labour Movement which viewed this as a balanced approach to help senior workers keep their jobs. Our ability to shift gears and to jointly focus on tackling the immediate challenges at hand while not losing sight of our longer-term vision, is a true reflection of the strength of Singapore's tripartism model. We will continue to engage our tripartite partners at each phase of rate increases over this decade.

The Government is also doing our part to help employers adjust to these changes. We introduced the $1.5 billion Senior Worker Support Package in 2020 and, through this package, we provide offsets for senior workers' wages and the additional employer CPF contributions. There are also grants to encourage employers to go one step further and raise their internal retirement and re-employment ages above the statutory ages, and to provide more part-time work options for senior workers.

Let me assure Members that raising the retirement and re-employment ages provides the flexibility for older workers to work longer, but does not compel them to do so. Those who do not wish to continue working need not do so and can enjoy their retirement. To be clear, these changes will not affect existing CPF withdrawal policies and ages. At age 55, you can still withdraw at least $5,000 and you can still start your CPF payouts from age 65 onwards.

Mr Speaker, if I may now move on to the CPF (Amendment) Bill. The Bill makes various amendments to simplify the CPF system for members.

First, we will make it easier for members to receive retirement payouts. For members who receive payouts through the Retirement Sum Scheme, some have fully drawn down their Retirement Account but still have funds in their Ordinary or Special Account. We will automatically draw down from these accounts to continue providing them a monthly payout.

For members who receive payouts through CPF LIFE, some have subsequent inflows into their Retirement Account. We will convert them into higher CPF LIFE payouts. For members turning 65 from 2023, we will give them greater flexibility to decide on when their Ordinary or Special Account savings will be transferred into their Retirement Account.

Allow me to elaborate. There are over 250,000 members currently receiving payouts under the Retirement Sum Scheme. These are members who had not opted into CPF LIFE.

Under the Retirement Sum Scheme, members stop receiving payouts once their Retirement Account is depleted. However, many members still have funds in their Ordinary or Special Account, the OSA accounts, because they continue to receive CPF inflows, such as contributions from employment. Some members are not aware that they can transfer these funds into their Retirement Account and continue to receive a monthly payout.

With this amendment, we will make it easier for them. To minimise the disruption to payouts, we will automatically stream out the Ordinary and Special Account savings of these members. This change will take effect by the first quarter of next year and will benefit about 83,000 members.

Let me illustrate with an example.

John has been receiving monthly Retirement Sum Scheme payouts of $700. He has now completely depleted his Retirement Account, but he still has $2,500 in his Ordinary and Special Account. Under current rules, this $2,500 will remain in his Ordinary and Special Account unless he comes forward to withdraw it or apply to transfer it to his Retirement Account.

With this amendment, John will continue to receive his monthly payout of $700 automatically, drawing from his Ordinary and Special Account savings. After the $2,100 has been paid out in three tranches – remember that John has $2,500 in his Ordinary and Special Account – the remaining $400 in John's Ordinary and Special Account will be disbursed to him as the final payout. If John is still working, the continued contributions to his Ordinary and Special Account will allow him to receive payouts for longer and fuss-free. John will receive the payouts when his CPF savings have accumulated to at least $250, or at least once a year if less than $250. John can also approach CPF Board or visit the CPF website to check how he can withdraw the remaining amount.

About 75,000 members are currently receiving CPF LIFE payouts. For subsequent inflows into their Retirement Account, members currently need to apply to add these inflows to their LIFE payouts. Again, we will automate this process by this month, making it easier for members to enjoy the higher payouts for life.

These changes will make it easier for members to tap on their CPF savings. It is worth mentioning that besides CPF, many of our seniors have access to other assets, such as housing, private savings and investments. For seniors who had low incomes during their working years and now have less in their retirement, the Silver Support Scheme was recently enhanced to broaden the eligibility criteria and to increase the quarterly cash payouts by 20%. As a result, almost 250,000 seniors aged 65 and above will benefit from Silver Support payouts in 2021, and this is up from 150,000 previously.

Finally, we will give members greater flexibility to decide on when their Ordinary or Special Account savings are to be transferred to their Retirement Account. Today, members already have some flexibility over when they start receiving payouts. Members who choose to defer the start of payouts can benefit from payouts that are up to 7% higher for each year deferred.

For members turning 65 from 2023, we have announced previously that we will transfer their Ordinary and Special Account savings into their Retirement Account, up to their cohort Full Retirement Sum, when they are eligible to start payouts. To provide greater flexibility to members, we will make this transfer when they choose to start receiving payouts instead. This will also be the point when we automatically include eligible members in CPF LIFE. Members who are not automatically included can still opt in to join CPF LIFE. Members can still voluntarily transfer Ordinary and Special Account savings into their Retirement Account up to the current Enhanced Retirement Sum at any time.

Let me also reassure all members that there are no changes to the rules for lump sum withdrawals of CPF savings. Members can continue to withdraw based on the current rules.

Next, we will also make it easier for members to build up their retirement nest egg.

The CPF Board has several schemes which members can tap on to grow their CPF savings. We accept Voluntary Contributions to MediSave. We also allow CPF members to make cash top-ups or CPF transfers to their Special Account or Retirement Account. They can also do so for their loved ones.

The year 2020 saw a record amount of top-ups via the Retirement Sum Topping-Up scheme. This amounts to about $3 billion across 140,000 members. To make it easier for members to build up their CPF savings through these schemes, we will refine the relevant tax relief and top-up limit rules.

Let me elaborate further. Currently, members can enjoy tax relief when topping up via these schemes, but the rules in place are different. To align the rules for both schemes, tax relief for Voluntary Contributions to MediSave Account for employees will be provided to the giver, instead of the recipient. From 1 January 2022, givers can also look forward to an annual tax relief cap of $8,000 when they make cash top-ups to their own CPF accounts and another $8,000 when they do so for their loved ones, up from $7,000. This cap will be shared between the Retirement Sum Topping-Up scheme and Voluntary Contributions to MediSave Account for employees.

To facilitate planning for members, we will also simplify the top-up limit for Voluntary Contributions to MediSave Account. Today, the limit for employees depends on two sets of figures – the Basic Healthcare Sum and the CPF Annual Limit, which is the maximum amount of mandatory and voluntary contributions a member can receive in a calendar year. As members can only know whether they have reached the Annual Limit at the end of each year, this creates some uncertainty for members. Therefore, going forward, the top-up limit for employees will be simplified to depend only on the Basic Healthcare Sum. Let me illustrate again.

The Basic Healthcare Sum in 2021 is $63,000, while the Annual Limit is $37,740. If you assume that Jane currently has $50,000 in her MediSave Account. Assume also that her total mandatory contributions for 2021 will amount to $35,000 and that she makes no voluntary contributions. Based on the new rule, she instantly knows that she can contribute up to $13,000. This is the $63,000 limit on the Basic Healthcare Sum minus the $50,000 which is currently in her MediSave Account. She can contribute up to $13,000 to her MediSave Account – and this is the headroom between the Basic Healthcare Sum and her current MediSave Account balance. Under the current rules, however, she also needs to be mindful and to consider the Annual Limit. So, that means that only at the end of the year will she know that she can contribute up to $2,740 which was the original $37,740 minus $35,000 – because this is the headroom between the Annual Limit and her contributions for the year. So, we will simplify this for our members.

The Bill also makes various amendments to streamline the administration of CPF schemes, thereby increasing efficiency for members. These are mainly technical changes to refine existing policies. Please allow me to give you three examples.

First, the CPF Act will be amended to refine how beneficiaries receive CPF assets, both un-nominated and nominated, upon members’ passing. This is in line with ongoing efforts to disburse such assets more quickly.

Let me elaborate. Depending on whether such CPF assets are nominated or not, they are disbursed via different routes.

Un-nominated CPF monies are transferred to the Public Trustee’s Office for disbursement. The Public Trustee’s Office then has to trace and verify each and every rightful beneficiary to disburse the monies to. The Public Trustee’s Office will streamline this process, to enable an eligible beneficiary to receive unnominated CPF monies as a Beneficiary Representative on behalf of all other beneficiaries with their consent, for amounts not exceeding $10,000. With this change, the application and verification processes will be simpler for eligible cases. Beneficiaries can expect to receive their monies sooner. The process will still remain unchanged for amounts that exceed $10,000.

Nominated CPF monies are disbursed by CPF Board. Since 2011, the Board has made automatic disbursements to qualifying nominees without requiring them to make an application. Over the years, CPF Board has continuously relaxed the qualifying criteria to allow more nominees to receive their bequeathed monies without application, which can be particularly helpful for those who need to tap on bequests to defray post-mortem expenses. As of this year, there is no longer any threshold for the amount of nominated monies that can be automatically disbursed.

We want to extend this automatic disbursement to nominees with bequeathed discounted Singtel shares which are purchased under the Special Discounted Shares scheme. Currently, such nominees are unable to benefit from this convenience as CPF Board has to wait for nominees to instruct whether they wish to have these shares transferred to their own CDP accounts, or liquidated. If the shares remain unclaimed after seven years, CPF Board will liquidate them. With the CPF Act amendments, unless otherwise instructed, such shares will be liquidated six weeks after the Board is notified of a member’s death. CPF Board will exercise discretion for cases where more time is required to trace beneficiaries. The sale proceeds will then be automatically disbursed, together with other nominated CPF monies, to the nominees. I would like to point out that, today, when claiming bequests, most nominees already choose to liquidate these shares, rather than have them transferred to their own CDP accounts.

With the improvements in automatic disbursement arrangements, about 93% of deceased members have their nominated CPF monies fully disbursed within six months of death. With the shortening of the holding duration for discounted Singtel shares that I have just mentioned, this percentage is expected to increase further as more can then benefit from automatic disbursement. This leaves behind a very small group of nominees who have chosen to delay the disbursement of bequests, which could result in the deceased member’s CPF monies remaining in his CPF accounts for up to seven years today.

Given these developments and the convenience of automatic disbursement, there is no longer a need to allow for the retention of unclaimed CPF monies over such a long period of time. We will, therefore, shorten this duration from seven years, to six months after the Board is notified of the member’s death. This timeframe should be more than sufficient for beneficiaries to make arrangements to claim nominated monies from CPF Board. Should a nominee choose not to make claims within six months, the monies will be transferred out of the deceased member’s CPF accounts, and no interest will be payable from then. However, nominees continue to have the right to claim the nominated monies at any time.

We will, similarly, adjust the disbursement process for assets in dormant CPF accounts, which form the minority and likely belong to deceased members. Specifically, once a member’s account is deemed dormant, we will liquidate the member’s discounted Singtel shares and stop retaining the monies, including accrued interest, in the account. I want to reassure all members that if CPF Board subsequently learns that a dormant member is alive, the Board will restore the monies to the member’s original accounts with interest.

The new durations will apply from 1 April 2022, to give some transition time. Again, let me reiterate that there is no change to CPF beneficiaries’ right to make claims at any time.

We recognise that a small percentage of monies remain unclaimed, despite CPF Board’s efforts to reach out to the beneficiaries. In fact, over the last five years, about 98% of CPF monies have been distributed to beneficiaries. Nonetheless, CPF Board will continue its efforts to reduce the incidence of unclaimed monies, via a multi-pronged approach. This includes regularly reminding nominees to make claims if they have not done so via letters, email, SMS and WhatsApp, educating and reminding members to make nominations, and making the nomination process as easy as possible.

Mr Speaker : Deputy Leader.

Debate resumed.

3.13 pm

Dr Tan See Leng: Thank you, Mr Speaker, and thank you, Deputy Leader.

Second, amendments will be made to streamline how the Government recovers grants from members.

Specifically, the amendment is a technical update to cater for grants automatically issued to eligible members but who, subsequently, choose not to meet continuing eligibility conditions. This is to be fair to the majority of other members who maintain their eligibility.

To be clear, this amendment is not about allowing the Government to recover grants provided erroneously to ineligible individuals. That can already be done. Let me give an example.

The Matched Retirement Savings Scheme (MRSS) was launched in 2021 to encourage top-ups to eligible seniors with lower balances by providing one-for-one Government matching for eligible top-ups up to $600 per year. The continuing condition here is that members do not reverse the top-ups that had qualified them for the matching grant. However, a minority of members may choose to appeal for such reversals despite knowing that the accompanying grant will also be reversed. This amendment allows the CPF Board to recover the accompanying grant should such appeals be approved on a case-by-case basis.

Finally, I would like to mention that we are simplifying the CPF Act itself.

Members of the House may find that the CPF Act can be quite complicated. In particular, section 15 on withdrawal from the Fund has 43 subsections. We have simplified this section for better readability while continuing to provide flexibility to cater to members' evolving needs. Let me assure all of you here that this does not change any existing withdrawal policies.

This sums up the key amendments under the CPF (Amendment) Bill. Allow me to conclude, Mr Speaker, Sir.

The Retirement and Re-employment (Amendment) Bill supports seniors in working longer should they wish to and choose to. The CPF (Amendment) Bill simplifies the CPF system. The various amendments will help members build up their retirement nest eggs and receive retirement payouts smoothly while streamlining administration of CPF schemes.

Together, these Bills will support Singaporeans to earn more and to save more as we continue to enhance our employment and CPF policies. Mr Speaker, I beg to move.

Question proposed.

Mr Speaker: Mr Liang Eng Hwa.

3.17 pm

Mr Liang Eng Hwa (Bukit Panjang): Mr Speaker, Sir, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Singapore is currently facing two major trends. First, our life expectancy continues to rise, from about 78 years old 20 years ago to 84 years old today and is expected to continue to rise. Singaporeans are not only living longer, but also more energetic and spending more years in a healthy stage. This is a good thing.

There are many factors contributing to this, mainly because of our better quality of life and better healthcare amenities, and that people are more aware of the importance of healthy living and live a more fulfilling life.

Second, because of the rise in life expectancy of Singaporeans, we are also facing a second major trend, which is a major shift in our demographics. We have now entered a phase of rapid ageing.

These two trends mean that, first, Singaporeans are now healthy enough to work longer and stay active in the workforce if, they choose to do so. They extend their active working lives, earn more, save more and enhance their retirement adequacy.

Second, employers can also tap on a wider manpower pool available to continue employing experienced workers to cope with the current manpower crunch. This is also the main objective of the Bill today, which is to legalise and operationalise the implications brought forth by these two trends.

The most important thing is to give employees appropriate legal protection so that they can remain in the workforce until the statutory retirement age. For those who have yet to reach the statutory retirement age, employers cannot stop employing these workers simply because of their age.

Of course, we must also give the employers some flexibility and allow them to adjust the nature of work, role in the company and working conditions for that employee.

Mr Speaker, while this legal mechanism provided by the Retirement and Re-employment Bill is important, it will take some time to achieve a win-win situation where there is no age barrier in the labour market, where manpower resources are used more flexibly and effectively, and where both employers and employees alike have the open mindset.

There are a few issues that we have to deal with.

First, have the employers adjusted their mindset regarding age discrimination and adopted a more positive attitude, and proactively utilised manpower supplement brought about by the increase in the retirement age?

Second, re-employment is a rather new concept. Have employees fully grasp its core meaning? For example, how to adjust their expectations and manage changes in employment terms which can be based on part-time re-employment or time-based employment? In terms of the employment contract, has the employee and the employer come to a consensus?

Third, in terms of job redesign, there is more work for the Tripartite partners to come work together to redesign jobs that are more suitable for older workers so as to attract more older Singaporeans to join the workforce and help companies raise productivity.

Fourth, with the extension of our work-life, we should also make the necessary policy adjustment when we plan employee training. For example, can middle-aged employees be allowed to further their studies in our Institutes of Higher Learning to upgrade their knowledge and skills and improve their re-employment opportunities. We need new thinking on this front and I hope that the Government can reconsider this when formulating policies.

Finally, I would like to ask the Minister, with the increase in retirement and re-employment age, will the CPF withdrawal policy remain unchanged? We must clarify this so that Singaporeans do not misunderstand the intention of this Bill.

(In English): Mr Speaker, Sir, I would like to seek a few clarifications from the Minister.

Firstly, to seek the Minister's view on his assessment on the readiness and willingness of employers to raise the retirement and re-employment age to 65 and 70 respectively. Does he see uneven readiness among the bigger and smaller companies, among the different industry segments, global versus local companies and employees of different wage profiles? Does he see different levels of readiness in employers adjusting to the rise in retirement and re-employment age?

Secondly, has MOM surveyed the attitudes of workers on higher retirement and re-employment age and what are their major concerns? I mentioned in my Chinese speech there are some concerns about contractual terms and whether the workers are prepared for those changes.

Thirdly, to what extent can we reduce the dependence on foreign manpower with the raising of the retirement and re-employment age, especially for the PMETs, as there will be a bigger pool of experienced workers for businesses to tap on?

Fourthly, following the progressive raising of the retirement age, will there be further measures to counter age discrimination and importantly, to step up monitoring of undesirable employment practices?

Fifth, with the employment runway of workers extended, will the Government institute new policy measures to help workers stay employable? Among others, would the Government see the need to introduce, for example, mid-career sabbatical leave so that workers can take a longer break during their mid-careers and to stay charged up for a longer working career? Or to allow mature students to become students again by allowing them to admit to the Institutes of Higher Learning to pursue new disciplines and to acquire new professional expertise? Or whether there will be further SkillsFuture support for senior workers?

Finally, a very important part to clarify again with the Minister is whether notwithstanding the raising of the retirement and re-employment age, to clarify that the Government would continue to delink retirement age and CPF payout eligibility age.

I think this is important, especially for today's Second Reading. We are debating both Bills together and members of the public may be confused and think that could be linked together: retirement age and your CPF withdrawal age. I hope that the Minister can clarify this so that there will be no misunderstanding on this part. Sir, notwithstanding that, I support both the amendment Bills.

Mr Speaker: Ms Sylvia Lim.

3.26 pm

Ms Sylvia Lim (Aljunied): Mr Speaker, I wish to speak on the Retirement and Re-employment (Amendment) Bill.

Sir, in view of longer life spans and more golden years, allowing an individual to work to an older age is a sensible and responsible thing to do. For the individual, it enhances financial security, independence and for some, provides a sense of purpose. This also benefits society as active seniors are more able to provide for themselves. This would enable the state Budget to be allocated to other areas of need.

The intent of this Bill as I understand it is to enable the Government to raise the minimum retirement age and re-employment ages by the year 2030. The minimum retirement age will go up progressively from 62 to 65 while the re-employment age will be raised progressively from 67 to 70.

This is a step in the right direction, which I support.

However, Sir, if we truly believe in active ageing, it is worth reviewing whether there should be a prescribed minimum retirement age at all.

At the outset, I would note that there are many employees in the private sector who are not subject to a mandatory retirement age. The prescribed retirement age applies more to the public sector and unionised employees.

However, continuing to have a minimum retirement age set out in law has a signalling effect on society as to the value workers above that age. This needs serious reconsideration. Singapore should review its stance.

I would like to highlight four points in support of removing the prescribed minimum retirement age and re-employment age.

First, life expectancy in Singapore has increased by approximately three years every 10 years. According to a 2019 Singapore Public Sector Outcomes Review, Singaporeans' life expectancy is among the highest in the world at 81.4 years for men and 85.7 years for women. These ages are merely averages and do not take into account many who live far longer.

To illustrate how longevity impacts retirement decisions, I would like to share a conversation I had some months ago with a cousin of mine, a retired engineer now in his mid-80s.

He shared that when he and his wife retired 30 years ago, they had no idea that they would live this long. He lamented that had they known that they still had so many more years to go, they would have worked longer. If an octogenarian can reflect on his life span in this manner today, what about us or younger cohorts who are likely to live longer?

Even when the retirement age goes up to 65, the prospect of having insufficient savings to fund another 30 years of living expenses and medical costs is real.

Second, we have a national manpower shortage. We often hear that foreign manpower is needed to supplement our local workforce. However, the COVID-19 pandemic has taught us a very painful lesson about how we have managed our low-wage foreign workers. Poor conditions in our crowded foreign worker dormitories have contributed to the spread of the virus.

The Government mantra has always been that Singapore needs to continue improving productivity instead of relying on increases in labour inputs. In our push towards leveraging on technology, it is likely that more jobs in different sectors will be redesigned to be less reliant on physical strength, making them suitable for senior workers to fill.

Third, we must ask whether having a prescribed minimum retirement or re-employment age is sensible for the parties concerned.

The fact is that the universe of employees is very diverse. Each person ages at a different rate. Those with health problems may not be able to work when they reach 60 years old while others can go on for much longer.

Finally, it has been said in certain quarters that removing the retirement and re-employment ages would disadvantage workers and give the upper hand to employers. To this, I am not clear how far having a prescribed minimum retirement age protects the worker from being dismissed on account of age.

Our labour market is one of the freest in the world with hiring and dismissal happening efficiently. Most employment contracts have a termination clause with either employer or employee being able to walk away from the contract by giving just one or two months' notice or payment in lieu of notice. No reasons need to be given for the termination of service in such situations.

Sir, I am fortified in arguing for a removal of the prescribed retirement and re-employment ages as there is now some certainty that workplace guidelines issued by the Tripartite partners will have the force of law. This change in policy has the potential to give employees protection against ageism in the workplace.

At this year's National Day Rally, the Prime Minister announced that workplace anti-discrimination guidelines would be enshrined into law. The Workers' Party has argued for anti-discrimination legislation previously and we welcome this announcement. We believe that the proposed law should proscribe discrimination based on age and we look forward to the opportunity to contribute to that debate.

Sir, in making these points, I wish to clarify that I am not advocating that everyone works till they drop dead. To most people, that would not be a life well-lived. Seniors may well decide to reprioritise their time and devote themselves to their grandchildren or charitable causes. Society could very well be better off if they did so. What I am advocating is that instead of having a decision forced on them at a certain age, we empower our seniors to make their own choice in this matter.

In closing, it will be appropriate to quote from a Singaporean who has advocated that there be no retirement age, none other than our founding Prime Minister Mr Lee Kuan Yew. In 2010, on the 30th Anniversary of the Singapore National Employers Federation, Mr Lee spoke at a dialogue with senior managers, Government officials and unionists. He told them that there should be no retirement age for workers. He called on older workers to change their mindsets and to continue working, even if for less pay or for a younger boss. He said, and I quote, "Many of our workers have a preferred retirement and then they die early. If you start saying, 'Oh, I am old', and you start reading novels and playing golf or playing chess, well, you are on the way down", unquote.

Sir, not many of us would dare to put it in such stark terms but there is a bigger point for society as a whole. If we are truly non-ageist, we should leave retirement and re-employment ages to choices made by individuals. As a safety net, we should enact an anti-discrimination law that prohibits employment decisions based on age.

Sir, even as I support this Bill, I ask the Government to reconsider this issue of legislating the retirement and re-employment ages.

Mr Speaker: Mr Patrick Tay.

3.33 pm

Mr Patrick Tay Teck Guan (Pioneer): Mr Speaker, I rise in support of both Bills. The Retirement and Re-employment (Amendment) Bill seeks to raise the retirement age and re-employment ages in Singapore to 65 years and 70 years respectively by 2030. The first move is to commence from 1 July 2022, increasing the retirement and re-employment ages to 63 and 68 respectively.

The Retirement and Re-employment Act came into force in 2012, because of three main factors, namely, a longer life expectancy of the current population, a tightening labour market with a shrinking citizen population and the need for talent management and retention.

Today, the abovementioned needs continue to exist and underscore the importance of the Act. Although COVID-19 has challenged the labour market, the Tripartite Partners agree that “the important work to enable older employees to continue working if they are able and willing to do so, must continue.”

While I am heartened that the Tripartite Partners remain committed to supporting the re-employment of older workers, I am concerned of more companies not re-employing existing older workers in view of the uneven and uncertain outlook.

I know of some companies who have resorted to making payouts under the Employment Assistance Payment, EAP for short, as an easy and cost-efficient way of circumventing their re-employment obligations. Indeed, this situation is in some way exacerbated by the COVID-19 pandemic.

As the life expectancy of individuals increase over the years, together with the mounting pressures on the sandwich generation, it is crucial that we ensure that all older workers who are keen and able to work, can continue to do so, with reasonable adjustments to their re-employment terms. Accordingly, the EAP should not be used as an easy way out to avoid re-employing older workers. Instead, it should only be offered after a thorough review, as a last resort – if the employer cannot find any internal vacancy.

To that end, I would like to raise six suggestions for consideration.

First, with the increase in median wages and the cost of living in Singapore, it is submitted that the existing one-off payment equivalent to 3.5 months' salary, subject to a minimum of S$5,500 and maximum of S$13,000, needs to be reviewed and increased.

If there is a sizeable increase in the minimum and maximum EAP payable, this might serve to deter companies from cursorily reviewing internal vacancies with a view to letting go of older workers. Companies may have a greater incentive to find suitable internal vacancies for older workers to work at and be paid for.

If push comes to shove and employers genuinely have no other options but to let go of older workers, at least the increased EAP amount would serve to tide them through a longer period of unemployment. We need to ensure that the EAP sum provided is sufficient. We do not want our older workers to be living from hand to mouth.

I, therefore, submit that the Tripartite Partners continue to work at and review the mutually agreed increment in both the minimum and maximum EAP sums, to cater to the increased median wages, changing employment landscape and increased cost of living in Singapore.

Second, additional tiers of unemployment income support for Professionals, Managers and Executives (PMEs) who are involuntarily unemployed.

The findings of the NTUC-SNEF PME Taskforce Report show that mature PMEs are particularly precarious when retrenched during the current downturn due to higher costs of living as they provide for both older and younger dependants; longer time periods taken to find a new job in view of their age and lack of relevant skillsets; and increased propensity to suffer from wage loss on re-entry to employment.

PMEs shared that an unemployment income support could provide some breathing space for them to retrain, upgrade their skills and look for suitable employment, while helping to alleviate their anxieties and ensure that those who are unaware of avenues of help do not fall through the cracks. I, therefore, suggest that the Government consider an unemployment income support coupled with active labour market policies for all workers, including mature PMEs, who are involuntarily unemployed, and for the Tripartite Partners to study this carefully in greater detail.

Third, the PME Taskforce Report also found that despite being active in their job search and undergoing training, mature PMEs who were retrenched had difficulties in securing a job.

To assist mature PMEs, the Government could consider providing a short-term salary support, for example, up to 50% salary funding, capped at S$3,800 per month for six months, for companies who hire mature PMEs who are unemployed, to lower the cost and risk for companies to hire this group of PMEs with relevant skills.

If a new company takes on another company’s re-employment obligations, the short-term salary support from the Government would be particularly useful in easing its re-employment obligations with respect to the mature worker transferred.

Fourth, while the current framework provides flexibility in job negotiations for re-employed employees, we need to safeguard against companies’ exploitations of such flexibilities.

Bearing in mind that older workers have performed satisfactorily and been employed in that role over the years, we could require employers to justify in writing, inter alia, any material changes in the re-employment terms of older workers and/or sudden lack of internal vacancies for the said role, when these employees have been employed in that role over the years. This is to avoid a situation whereby companies unilaterally offer significant pay cuts or reduction of employment benefits to the mature worker, under the guise of having re-negotiated the employment terms with the mature worker, while expecting the same standards and deliverables from the mature worker.

Further, with the requirement for written justifications on material changes to the employment terms or sudden lack of internal vacancies, the company bears the burden of justifying that such changes are reasonable. The company cannot simply state that the employee rejected its reasonable re-employment offer as a basis for not paying EAP.

Fifth, even as we embrace digital transformation, we urge employers to continue training and upgrading older staff to acquire the necessary skills to minimise the digital and tech inequality. Where there are incentives and support schemes, to tap on these support schemes and send older workers for training and skills upgrading.

Lastly, through the COVID-19 pandemic, we have seen many changes in the work environment. Just to name a few: businesses have pivoted to online platforms, employees have been working from home and international conferences are held online. These non-exhaustive lists of examples show us collectively that Singaporeans are agile enough to adapt to various changes and curve balls that the pandemic has thrown at us.

As Singapore marches towards the "next normal", I would like to encourage employers to consider how various jobs can be redesigned and re-examined to allow for older workers to continue working.

In so doing, companies may consider the relevant skill sets the employees have and their experiences gleaned over the years, to match any needs that the business may have. For instance, if a person was employed in a marketing role, a job redesign could involve not just marketing work to external parties, but possibly internal communications, usage of digital platforms and social media and/or pitching of ideas to senior management. Crucially, older workers may also take on the role of mentoring younger employees.

I would like to call on employers not to view older workers as "slow", "backward" or "expensive to hire". Instead, I urge employers to adopt a change in mindset. There is a Chinese saying, “家有一老，如有一宝”. This is loosely translated to mean that having an elder at home can be likened to having a treasure at home.

I believe this is also applicable in the work context as well. Older employees have amassed a wealth of experience over the years in their specialised areas of work and it would be our loss if we do not tap on this treasure while still available. There is something about decades of work experience, tenacity, soft skills and accumulated knowledge that cannot be quantified, much less deemed as irrelevant for the purposes of re-employment.

Mr Speaker, the Central Provident Fund Bill is put before us for amendment, with the key objectives of: making it easier for members to receive retirement payouts, making it easier for members to build up their retirement nest egg and streamlining the CPF system.

These are all laudable objectives, consistent with the overarching mission of the CPF, which is "to enable Singaporeans to have a secure retirement through lifelong income, healthcare financing and home financing."

While I am fully supportive of the amendments, I have the following questions from an employment perspective for the Minister.

The "Contribute-As-You-Earn" Scheme, the "CAYE Scheme" for short, helps self-employed persons, SEPs for short, contribute to their MediSave as they earn. Under the CAYE Scheme, Government agencies will deduct and transmit a portion of payment due to SEPs into their respective MediSave accounts, for convenience. At present, the CAYE Scheme is only applicable to public sector contracts.

First, I understand that take-up of the CAYE in the public sector is very encouraging. In view of that, would the CAYE Scheme be expanded to include the private sector? If so, does MOM foresee any resistance from the private sector? How else may the CAYE Scheme be expanded to help freelancers? If expanded, it would help more freelancers, particularly those who render services to companies in the private sector, keep up with their MediSave contributions and provide greater financial protection against health issues.

Second, under the CAYE Scheme for Government projects, the Government essentially deducts a portion of monies due to the SEPs and transmits it to the SEPs' MediSave Accounts.

As this House would know, the COVID-19 pandemic has had a decimating effect on the lives and livelihoods of SEPs. With the circuit breaker measures that were implemented last year, together with the existing restrictions on social gatherings, the events and performing arts sector has almost come to a standstill. Their current earnings are a far cry from their earnings prior to the pandemic.

In view of the above, would there be possible circumstances in which SEPs can opt out of the CAYE Scheme, as they may need the monies to tide through this rough patch? If so, what are some examples of such circumstances?

Third, in the context of employment relationships, both the employers and employees make CPF contributions. Even as the distinction between SEPs and employees is increasingly blurred, with some countries recognising SEPs as "workers", perhaps service buyers could be required to make CPF contributions for SEPs too?

To be clear, the existing CAYE scheme applicable in the public sector only requires the Government to take a portion of the fees belonging to the SEP, to be credited to the SEP's Medisave account. What I am proposing is one step further, that the service buyers from both the public sector and private sector, make additional contributions to the SEP's CPF account; which mirrors the employer's CPF contributions under normal employment relationships.

If accepted, this would mean that practically, service buyers would be making CPF contributions consisting of both the SEP's portion under the existing CAYE scheme, as well as additional sums being the service buyer’s contributions too.

Sir, notwithstanding my clarifications and suggestions, I stand in support of both Bills.

Mr Speaker: Mr Henry Kwek.

3.46 pm

Mr Kwek Hian Chuan Henry (Kebun Baru): Mr Speaker, Sir, I rise in support of both Bills put forth today. As a member of the People's Action Party (PAP) Seniors Group, I am delighted to participate in this debate.

Amidst the pandemic, I am heartened that our Government has chosen to stay the course and continue with the planned increase of retirement age from 62 to 63, and re-employment age from 67 to 68. I also hope we can increase the retirement age to 65 and re-employment age to 70, sooner than later, ahead of our target in 2030.

Beyond adjusting the re-employment and retirement age, I also like to make three suggestions for MOM to improve our senior’s livelihood and retirement adequacy, namely: increasing our seniors’ CPF contribution rate, fighting ageism through the upcoming anti-discrimination legislations and exploring new ways of helping seniors above 60 to find and hold on to jobs.

In January 2019, the PAP Senior Group put forth a position paper to empower our seniors to live with purpose and dignity. One of the key recommendations called for a gradual increase in our seniors CPF contribution rate, given that their rate is currently less than that of younger workers. That same year, the Government agreed to this proposal. However, when the pandemic struck, our Government froze this specific commitment for seniors, so as to help as many companies as possible stay afloat.

While I understand and support this necessary action, I hope the Government can resume the planned increase at the earliest possible time. We are seeing an uneven recovery. Some sectors are doing well, some are staying afloat and some are frankly struggling. One way that the Government can consider doing, to balance both the interest of both our senior workers and our struggling sectors, is to: push for the contribution rate for all seniors to increase, as long as the broad majority of our economy has made a recovery, and encourage the National Wage Council to adopt even more overall wage flexibility depending on the performance of the sector and the firm.

My second point is that I hope the Government can put in anti-ageism clauses in the upcoming anti-discrimination legislations. This is something that many of our colleagues from PAP Senior Group would like to see.

Over the next few months, my fellow colleague from the senior group, Deputy Speaker Jessica Tan, will spearhead an intense effort to engage our senior workers and to solicitate their feedback. We hope to identify win-win solutions for both senior workers and employers. We hope to help seniors to not just improve their employability, but also the equality of their employability.

Even before the start of our consultation, I have already heard a number of useful suggestions, including disallowing companies from asking the last drawn salaries or the age of applicants. We will share what we have heard from our senior workers in good time.

Last, I hope our Government continue to find new ways to help our seniors workers, especially those in their 60s. I note that NTUC and SNEF have recently submitted some excellent ideas to the Government to help matured Professionals, Managers and Executives (PMEs). These ideas will go far to support workers in their 40s and 50s.

However, even if we get our upcoming anti-discrimination legislation right, even if we continue to raise our retirement age and re-employment age, our senior workers above 60 will still be very vulnerable to being displaced. And if they are displaced, it will be very hard for them to find the next full-time job.

As such, we would need to explore and accelerate new employment models such as micro-jobs and job-sharing for seniors above 60. And we may need the Government to spearhead this effort, to demonstrate its full potential to the private sector. I have spoken about micro-jobs on several occasions in Parliament and I think it is time for us to seriously look into that.

And to extend our seniors employability as long as possible, it will be helpful if MOM can convene a panel of medical experts to advise our industries to determine how long our senior professionals and skilled workers can work for in specific industries. For example, the panel can advise companies on how to maximise work opportunities for surgeons, without compromising on patient safety. The panel can advise companies on how long pilots can continue flying a plane and whether that length depends on the number of passengers sitting on the same plane?

Why must the Government get involved? Because without an evidence-based decision-making process, the employment outcome in many industries will be driven by supply and demand for workers and a number of industries will adopt an unnecessary conservative approach. This means that a number of our senior workers, especially those above 60, could prematurely lose the chance to work, even with the Retirement and Re-employment Act in place.

Let me now conclude. For many of our seniors, work creates a sense of mission. It is critical to empower our seniors to age with purpose and dignity. The Bill discussed today is an important step to strengthen senior employability.

MOM has done a lot, but there is a lot more to do. And even as we manage to safeguard the health of our vast majority of seniors through this pandemic, a number of seniors today feel a sense of despair, more than in recent years. Because our seniors are more impacted by social distancing measures compared to the rest, because our seniors have reduced opportunities to interact with others and to stay relevant, and because our seniors feel a deep sense of isolation amidst the pandemic.

Once we get past this stabilisation phase, which we will, we must step up more to increase our seniors' employability. I hope the Government can consider the ideas raised and start preparing for that day.

With that, I stand in support of both Bills put forth in this debate.

Mr Speaker: Assoc Prof Jamus Lim.

3.52 pm

Assoc Prof Jamus Jerome Lim (Sengkang): Mr Speaker, this latest set of amendments to the Retirement and Re-employment Act build on the number of positive amendments to the Act that were passed in 2017, which increase the re-employment age by two years to 67 and also strengthened the position of senior workers vis-à-vis their re-employment options while also removing the option of employers to reduce their wages after the age of 60.

The amendments tabled this time propose to further raise the re-employment age to 70, while affording some additional modest protection for dismissals on the grounds of retirement age. This move follows the trend evident in many other advanced economies.

Next year, the United States will raise the age where one is able to draw a full public pension or Social Security benefits, what is typically referred to as the Full Retirement Age, to 67 for those born in 1960. France has sought, with limited success, to raise this retirement age of 62, by two years. Earlier this year, Japan raised its retirement age to 70, while Australia and Spain will gradually hike the retirement age to 67 in the years ahead.

Since Singapore does not have a pay-as-you-go system, the usual justification for countries raising their retirement ages to ensure that their state pension systems are able to remain financially viable in light of an ageing and longer living population, does not apply here. What is instead relevant is the legally mandated age where one's employer is able to request that one retires. Hence, the relevant motivation for us choosing to raise the retirement age is different as it should be. It is a recognition that the nature of jobs in the modern economy are often dramatically different from those of yesteryear.

Most of the menial back-breaking jobs of the past have now, been replaced with machinery and technology. Accordingly, many jobs are now far less physically demanding, thereby permitting the modern worker to continue performing these jobs at a very high level, regardless of their age. Indeed, a number of hard and soft skills, such as technical, oral or interpersonal skills may, like fine wine, even improve with age. Moreover, most of the more sophisticated jobs in the modern economy often require an extended period of education and training, especially if they pursue graduate degrees or endure mid-career retraining and reskilling. This is, of course, coming from an over-educated individual who only completed his formal educational journey the year he turned 30.

While such an extended period of human capital formation is both valuable and positions the worker well for their subsequent career, it also implies that they begin their formal employment journey later than usual. It seems unfair to cut the employment work life's short just by dint of their extended education and training.

Finally, such a move would also be consistent with the tsunami of demographic changes that will unfold over the course of the next decade. Singaporeans are living longer and the number of those entering their 60s and 70s will also swell. By 2030, the number of Singaporeans, aged 65 or older, will be close to a million. It is therefore imperative that we accommodate and extend the work horizon to allow these individuals to continue to participate in meaningful productive activity. If they so wish, such engagement can also positively impact the mental and physical health and delay the onset of memory loss, depressive symptoms and even physical disability.

Mr Speaker, if we may take the arguments I have made above to their logical conclusion, it will suggest the total abolition of any official retirement age. This is the official position of the Workers' Party and one reiterated in this House most recently, by Assoc Prof Daniel Goh, when he was a Non-Constituency Member of Parliament (NCMP) in the 13th Parliament.

To be clear, this is not a call for our workers to continue working themselves into the grave, nor is it a call to postpone the official age of access to CPF savings, a point I will return to later. Rather, this is a call to permit workers the freedom to continue to choose to work at any advanced age as long as they are able and willing to and are able to secure a job. This call should also be seen as an implicit call to remove discrimination in the workplace on the basis of age, a position that the Workers' Party has likewise championed.

With no clear retirement age, employers can no longer use the excuse that hiring a worker with a short runway before they are officially forced to retire, would be an inferior business decision, compared to hiring a younger worker with no such retirement constraint. Indeed, there is evidence that anti-discrimination laws have been effective at boosting the employment of older workers, to the extent that we subscribe to non-discrimination in the workplace; then, the abolition of the retirement age is an essential complement to a richer set of legislative provisions to that effect.

One natural concern with such a proposal is that doing so could inhibit the renewal of the workforce, as the elderly take up jobs that would otherwise be filled by younger workers. Notwithstanding the fact that there are no legal impediments to replacing senior workers with junior ones, regardless of the retirement age, we should not rely on legal crutches to do what managers ought to be doing, which is to make the difficult decision of firing workers if and when necessary. If anything, the solution requires a realignment of cultural practices that keep unproductive workers in their positions, rather than keeping an artificial legal retirement age in place. Indeed, the economy where this issue is most chronic, Japan, does have an economy-wide retirement age. Clearly, its presence has not alleviated the problem of displacement, which suggests that the solution to excessive youth unemployment lies clearly lies elsewhere.

The other counter-argument, which is almost the opposite of the first, is that a clear retirement age prevents frivolous firings since employers cannot use the excuse that an employee is, generically speaking, too senior, if they are 57 as opposed to 67.

But this argument fails to hold up to theoretical scrutiny. Why would an employer wait for an underperforming employee to reach any level of seniority before they replace them? It will be far more straightforward to simply grant such workers a severance package and release them, regardless of age.

Nor does this argument actually work in practice. I have many residents who approached me and shared with me how they were, indeed, let go a number of years before retirement and how they subsequently faced difficulty securing a job because employers deemed them too close to retirement.

Hence, if anything, a fixed retirement age operates to the detriment of workers and does not appear to have inhibited the retrenchment of workers themselves.

Mr Speaker, what abolishing the retirement age emphatically does not mean, however, is that we should, concomitantly, raise our CPF payout eligibility age. Indeed, the Workers' Party has also repeatedly called for the lowering of this age to 60. This amounts to decoupling the retirement decision from the retirement savings decision.

I am heartened that Minister Tan has made this point clear in his speech earlier. Singaporeans should be empowered to make their own informed choices about the manner by which they wish to draw on their hard-earned retirement savings. Doing so also permits those nearing retirement to be more creative in the manner by which they balance their employment and retirement choices.

For instance, a 60-year-old banker may wish to shift gears towards consultancy or adjunct teaching on a part-time basis but, nevertheless, wish to supplement his or her income with a modest CPF payout.

This does not mean, of course, that we do not design incentives to encourage our seniors, especially if they remain in the workforce, to postpone their CPF withdrawals to benefit from the compound interest and, thereby, allow for larger payouts when they eventually make their withdrawals.

Regardless, such delayed withdrawals should be a purely voluntary scheme. To my mind, nudges of this form are a far more palatable approach to encouraging individually beneficial retirement choices.

Taken together, Mr Speaker, these changes will permit our people to exercise far greater agency, individual self-responsibility and freedom to choose their desired course of employment in their senior years as well as weigh their various retirement options in an informed and unconstrained manner.

In other words, it will allow our people to retire after a long struggle with dignity. This is something that all in this House would wish for those who have blazed the trail before us and for this reason, I support the Bill.

Mr Speaker: Prof Hoon Hian Teck.

4.03 pm

Prof Hoon Hian Teck (Nominated Member): Mr Speaker, Sir, I would like to speak on the Retirement and Re-employment (Amendment) Bill.

This Bill empowers the Minister to specify the prescribed minimum retirement age applicable to any class of employees who must be at least 62 years but not more than 65. Employers cannot dismiss the employees on the ground of age before they reach the prescribed minimum retirement age. Similar provisions are made for the re-employment age.

The need to make such legislative provisions arises from the fact that life expectancy has vastly increased and, along with it, people can make choices on how to divide the gains in the number of years between work and retirement. The Tripartite Workgroup on Older Workers recommended that the retirement age and re-employment age be raised to 65 and 70 respectively by 2030, with the first increases to 62 and 68 in 2022.

Evidence from several developed economies shows that an increasing fraction of people in their 60s have chosen to remain active in the labour force since the mid-1990s.

Data from the Singapore Yearbook of Manpower Statistics 2021 show that for those in the age group 60 to 64 years, the male labour force participation rate increased by more than 10 percentage points from 2010 to 2020. For the age group 65 to 69 years, the male labour force participation rate increased by more than 15 percentage points.

Corresponding figures for the female labour force participation rate for these corresponding age groups showed even bigger percentage point increases, although they remained below the male labour force participation rate. For the age group 55 to 59 years, there was also a significant increase in the female labour force participation rate.

The question: what factors account for the rise in labour force participation rate of older workers in recent decades?

First, improved health, by itself, does not explain the rise in labour force participation. This is because data of today's developed economies shows that while the mortality rates at older ages have steadily declined during the past several decades, the labour force participation rate, especially for men, exhibited a U-shaped curve, declining before steadily rising since the mid-1990s.

Instead, changes in the eligibility ages for retirement benefits and rules on disability insurance in the social security system in these countries seem to better explain variations in the labour force participation rate. As health has improved, along with the increased life expectancy, people might choose either to work or to engage in meaningful activities that do not necessarily generate an income.

Second, across education groups, those with more years of education have higher labour force participation among older workers. Those with a more rewarding career in the earlier phase of their life cycle are more likely to choose to work when they are older. As the share of our older population with tertiary education increases, this is likely to lead to higher labour force participation.

Third, various factors, including labour-saving technological improvements in the household sector, such as household appliances, and more years of education have led to a steady rise in labour force participation among women. The rise in labour force participation rate for women in many of these developed countries occurred earlier, earlier almost by a decade, in many of these developed countries.

By the early 1980s, there was a relentless, steady increase in labour force participation rate among women. This rise in labour force participation among women may have the effect of causing higher labour force participation among men if the couples agree to retire at the same time – the so-called "working wife effect".

However, if women bear the additional responsibility of providing care to their much older parents, this may discourage them from working in their late 50s to their mid-60s.

So, on the whole, there are factors that clearly had been at work, not just in Singapore but in many developed countries, tending since the 1990s, to raise the labour force participation rate. The main point, though, is that people now have an ability to choose how to divide the additional years of their life between retirement and work.

Finally, apart from the supply-side factors, which I have described, demand-side factors will also contribute to the ability of the economy to create good jobs for older workers that will boost their job satisfaction and their participation rate. So, Singapore's continued growth as a mature economy will be important in order to generate the demand for the skills of our older workers.

Mr Speaker, Sir, as our life expectancy has increased, people have the ability to choose how to divide the added years of their lives between work and retirement. This is a very good thing, however, people finally make their choices. It is likely that the prescribed retirement age and re-employment age encapsulated in our legislation will need to change to reflect people's preferences. I support this Bill.

Mr Speaker: Senior Minister of State Heng Chee How.

4.10 pm

The Senior Minister of State for Defence (Mr Heng Chee How): Mr Speaker, Sir, thank you for allowing me to join this debate. I support both Bills and I will speak on the Retirement and Re-employment (Amendment) Bill.

Sir, I declare my interest as NTUC's representative in and a member of the Tripartite Workgroup on Older Workers whose report was adopted by the Government. That report was titled "Strengthening Support for Older Workers".

The Report itself contained 22 recommendations and, of the 22, the three most prominent recommendations pertained to the progressive raising of the statutory retirement age from 62 to 65 by the end of the decade, the corresponding raising of the re-employment age ceiling from 67 to 70 over that same timeframe, and also the progressive improvement of CPF contribution rates for both employers and employees for workers aged 55 to 70. That is the subject of the amendments today.

The two Bills before us today, the Retirement and Re-employment (Amendment) Bill as well as the Central Provident Fund (Amendment) Bill, they are to give legislative effect to these recommendations so that they can be implemented to the benefit of both workers and companies.

Sir, I think there is a good analogy between what we are trying to do to address the oncoming needs of our ageing local workforce as well as the needs of companies employing these workers when compared with our national efforts to address the equally serious challenges that are being brought about by climate change. I wish to draw that similarity to frame it in such a way that I think will make it easier for all of us, inside and outside of this House, to see what it is that we are trying to do.

The first similarity is that both these challenges – ageing population and ageing workforce, locally and climate change – is that they are both very damaging if they are not properly addressed.

In the case of climate change, one specific known threat to Singapore would be that of global warming leading to rising sea levels. In that scenario, if we do not build up sufficient defences early and well enough, the result will be a loss of coastal areas as the sea level rises.

This is why the Government, as announced by the Prime Minister and has begun to be put into budgets, will invest heavily to raise the foundation level of critical infrastructure to be well above current sea levels and to build sea walls in order to increase our coastal protection.

So, we must do likewise to help our ageing local workforce so that they are not only better protected but would also continue to be a valuable contributor to our economic dynamism.

Sir, ageism exists throughout the world. I think we all agree it is not right. It is not good. It is not fair. But it is there, to a greater or lesser degree. On this journey that we all want to be on to reduce it, if possible, to eliminate it someday, we continue to have to deal with the reality that while it exists, and it does now, what is it that we must do to accord the necessary protection for our workers?

And it was for this reason, that the Tripartite Workgroup on older workers debated long and hard as the first terms of reference that was set for it, on whether that statutory retirement age for older Singaporean workers is still relevant and needed, at least for the coming decade. It concluded that, that was needed. I hear several Members speaking about the need for that. I just want to give a little bit of background as to the thinking when we debated this within that workgroup.

The basic question we ask ourselves is supposing there is no ageism in the workplace and therefore, employers are more than happy and will always employ older workers who are willing and able to work. Then, it is okay with these companies and it does not matter if we have a statutory retirement age because the company will just continue to employ. They are not in any way, held back by a statutory retirement age.

But in the opposite scenario, where you have companies whose practices are ageist, then it is not so simple in the absence of some strong signal from the tripartite partners, from the Government, in law, I think we can understand that these tendencies will become more pronounced.

As it is, we hear examples already cited that residents come to us and say that some of them might have been let go of even as they get into middle age. And they find it more difficult to get a new job and when they do get a new job, the chance of not matching the old terms is quite high. So, we ask ourselves, if indeed there is no ageism anywhere around and age equals experience, equals value and is fully appreciated, then why are we having this scenario? And if you are having this scenario, why is it therefore, not good for us to continue to put in the necessary protections?

So, it was along those lines that we discussed. In summary, if there is no ageism, having a statutory retirement age does no harm. You just carry on employing. If there is, this gives you a strong signal to think again and do not resort to ageist practices so easily.

So, beyond the legality of it, it sends a clear signal to employers on what tripartite partners want businesses and organisations to focus on, namely, to find and put in place effective ways to keep our older workers sharp on the job and not cause them to become a liability prematurely.

Therefore, I certainly support further efforts to protect older workers against ageist workplace practices. And in this regard, I look forward to the outcomes of the Tripartite Workgroup on workplace discrimination that MOM has initiated a few months ago.

Sir, coming back to my analogy of coastal protection. If you look at it that way then, statutory retirement age and re-employment age are like a pair of sea walls, built for our older workers. They stand as visual reminders of our nation's commitment to protecting our older workers as an asset.

This is not merely done to achieve some philosophical ideal, but it is done for a very practical reason. It affects the lives of our people, it effects the livelihoods of our older workers and their retirement.

Sir, the first move to improve the CPF contribution rates was originally to take place in January 2021, as Minister Tan See Leng reminded us just now. That was to be followed by the increase in the retirement and re-employment ages by one year each in 2022.

But as we know, last year, COVID-19 hit us. As a result, the tripartite partners discussed how do we do this in a way that does not derail the entire intent, but take into account the serious circumstances that we have to face. And as a result, we agreed to delay the implementation of the increase of the CPF rates by a year, hence, January 2022, but to keep in place the planned increased in the re-employment and retirement ages in July 2022.

This safeguards the longer-term resilience while tending to the immediate challenges faced by both companies and their workers. I hope that companies and workers alike would draw comfort and confidence from observing this move, knowing that our Government and tripartite partners will always act in the overall best interest of both our workers and companies.

Sir, I would also like to seek a clarification from Minister. I might have missed it. It is with regard the transition offset package. This was mentioned in previous speeches that when you increase the CPF contribution rates, that Government will consider a transition offset for part of the cost that the employees would have to bear. So, in other words, the Government is co-paying with the employers for the improvement for our workers. This would certainly make it easier for the employer's to also implement this and to benefit the workers. So, I hope to seek this clarification from Minister whether that package would be put up.

Sir, I return now to the coastal protection analogy. Building sea walls are necessary but they are not sufficient to ensure key infrastructure can keep above the waves of change, which is why it is necessary to raise the foundation level well above sea level, so that these places can stay dry longer.

And in this light too, I say, it is similar to what we must continually do in order to shore up the employment and employability of our older workers for the journey ahead.

Over the years, the Government has introduced numerous hiring and training incentives that favour the older worker. I thank the Government for that. Examples would include the Senior Employment Credit, the Senior Worker Early Adopter Grant, the Part-time Re-employment Grant and various others as well.

These financial incentives have indeed been very helpful in lowering the cost of hiring of older workers and therefore increase the numbers hired. I am glad that the efforts of the tripartite partners and the responsible actions by the vast majority of firms have kept the employment rate of older workers stable despite COVID-19's onslaught. In fact, according to figures released by MOM, the employment rate for workers 65 years and older actually showed a small increase in the year 2020, compared to the year 2019. The Government has also provided preferential subsidies for the training of older workers for many years now.

While wage subsidies serve to lower the cost of hiring of older workers and they would certainly help, they are actually also not the longer-term safeguard that is needed. They are necessary, helpful but they are not the longer-term safeguard that is needed.

For analogy again, you can imagine that they are very, very good sandbags and flood barriers that you can mount right at local level and that helps. But what they do not do is that they do not reduce the inherent vulnerability of that premises to flooding, if the premises itself is too low.

Therefore, we must still continue to undertake the hard work of raising the foundation levels. This is the ultimate way to keep the premises above the rising tides, and in like manner, effective improvement in the employability of older workers is the ultimate way to help as many of our older workers as possible stay above the rising tides of skills obsolescence and workplace value depreciation.

There are very clear signs that we need to pay close attention to this area and to act on it. I said earlier that the employment rate of older workers has held steady and even improved slightly between 2019 and 2020, despite COVID-19. I would qualify it that this was so for workers aged 55 and above.

NTUC and SNEF co-led a task force – we call it the PME's Taskforce – to examine the needs, hopes and anxieties of PMEs. This was done over the past year. Their report was recently submitted to the Government. It is clear from the report that the anxiety over job insecurity among those aged 40 to 60 is palpable.

To be sure, this anxiety was already there before COVID-19 and it came about partly as a result of business model changes, partly as a result of delayering of middle management and also technological changes. COVID-19 accelerated and intensified the factors.

Sir, safeguarding the employability of the mature worker from early middle age must now be a central focus of policy research, planning and formulation. We must not wait until these folks are near retirement age. This must go hand in hand with ensuring a level playing field for Singaporeans in being considered for job openings. This is so that middle aged local workers would not be too easily or prematurely rendered unemployable and have to exit the workforce. Otherwise, legislative improvements, such as the ones that we are considering today, to increase the retirement and re-employment ages would be rendered moot, because they would not even be there. So, we must help them carry on and then with this extension, they will also benefit.

Equally importantly, we must know that policy and incentives themselves are necessary again, but not sufficient to ensure the required outcomes. Effective last mile implementation is critical to ensuring real and sustained outcomes. So, what needs to be done? Sir, I would suggest three areas for consideration.

First, let us invest even more to further boost the capacity and effectiveness of job retraining and employment facilitation mechanism. We must give due credit to the work of WSG, NTUC e2i, SSG and NTUC's Company Training Committees (CTCs) and the Job Security Council (JSC) for each year helping thousands of jobseekers retrain and find new jobs. And many amongst them would be older workers.

At the same time, we must recognise that the size of the mature local workforce will grow rapidly in the coming years because of demography and changes in the business environment will only accelerate. Therefore, we must consider whether our current mechanisms in facilitating retraining and career guidance and job matching on an individual, inter-company as well as inter-industry transfer level, do we actually have anticipated capacity and effectiveness, the swiftness of that switching to tackle the heavier loads that we can anticipate that are oncoming. So, we got to do a study on this and investment what is necessary to expand ahead of that curve.

For if we do not get this right, then we will have to face up to a growing pool of displaced, disillusioned and disgruntled older workers in society. Sir, as I emphasised earlier, effective implementation of the last mile is the key to actual results.

Second, let us factor in more episodes of displacement and to configure the help for that in-between. Every worker now must expect multiple episodes of employment through his working life. This means that it will not be lifelong employment for most. This in turn means that workers will need more help in between jobs to tide over as they job-search, and as they retrain. This is especially so in the cases where the job lost was not voluntary.

While it remains true that we must not encourage pickiness when it comes to jobseeking, but we must also recognise the real downsides of being forced by circumstances to repeatedly take jobs that pay worse or under-utilise ability, without reasonable alternatives. And the latter, if that happens, will come back to haunt society in weakened retirement adequacy and frayed social fabric.

Thus, we must review and strengthen the social support to target the breaks in income that will inevitably affect more people and reduce the cost of their active retraining, job search and job conversion.

Thirdly, let us review the structuring and conduct of CET or Continuous Education and Training. It is common to hear training being divided into two phases – PET or Pre-employment Training, generally the "schooling years", as most people understand it, as well as CET, which is the working years, as many people would understand it. So, PET and CET.

I think it would be quite obvious to all of us that investments in Pre-employment Training (PET), over the decades have been immense. This correctly reflects the Government's recognition of our people as our most important asset, who must be developed and who must be tapped to their fullest potential.

Government funding for CET, that is the employment part of it – during the working years – has also grown very substantially over the years, via course fee subsidies, absentee payroll, paid internships and conversion programmes for mid-career workers. There are also the SkillsFuture credits granted to all Singaporeans aged 25 and above for self-initiated skills development. So, a lot of money is also being invested in those areas, especially in more recent years.

The fast-changing environment creates a serious uncertainties that confound both workers and companies over what training would be purposeful and for whom. This generates inertia at the level of the company and the individual. In other words, I hold back training because I am not very sure what am I supposed to be trained at? And after I get the training, am I headed for something meaningful? As a result, time is lost.

Or sometimes, it might actually result in, instead of inaction, it goes into aimless training; train for the sake of chalking training hours, for example, which is not the point, because it does not help keep your skills sharp. And when that happens, you still face a progressive loss of employability. The risk is therefore that more and more of our nation's human potential can be wasted this way if the uncertainty continues.

To tackle that problem, we cannot tackle it just by introducing more schemes or more subsidies. The current operating landscape may be too fragmented and cannot offer pervasive and sound guidance that links training to ops, future planning in companies. Therefore, more structure, more anchoring, consideration of shared services and periodic check-ins at the company and individual levels – as Minister has also alluded to just now – in terms of what you should be doing with your mature workers, would be needed to produce the required last mile outcomes for the majority of mature workers, starting in their 40s. This must be carefully and seriously studied, so that the current ecosystem can be reshaped to help mid-career mature workers hone and update their skills and strengthen their value and their employability as well as their adaptability.

Mr Speaker, Sir, the Government and tripartite partners have worked hard over the years to strengthen support for our older workers. We must continue to do so, especially given our ageing local workforce. We must fight ageist workplace practices and give our older workers a chance and a choice to continue working.

To do so successfully, we must not only extend the working ages by law or help make hiring cost-effective through wage subsidies – though these are important – but we must also tie our policies, resourcing, partnerships and implementation more tightly together. This is so that mature workers and their companies will update their skills more rapidly and purposefully. This will then help mature workers grow with their companies and be more able to quickly move into new jobs and into new sectors if they are displaced. This will be crucial in helping mature workers keep their value and sense of security, and view the future with optimism.

Mr Speaker, before I end, I just wanted to make a point about something I heard just now as shared by the hon Member Assoc Prof Jamus Lim when he recounted what some of his residents shared with him that after they lost their jobs in their mid-50s and they approach employers and the employers told them that "Well, you know, if I employ you then I can't keep you for very long because then you are too near the retirement age."

Earlier, the Minister had clarified that having a statutory retirement is not to force any worker to work beyond what he or she wants to. It is to protect him or her from an ageist employer who cites no other reason than age, to say bye bye to him or her. So, it is that way and not the other way. Employers should not misinterpret this to workers.

So, in that particular example that was cited, for that employer to tell Assoc Prof Lim's resident that, "Actually, I would like to employ you but, you know, you are too near the retirement age", would suggest that the employer is actually saying that, "Well, I am prevented by law from employing you beyond the statutory retirement age" which is false.

So, I hope that we should also make this point very, very clear to employers and to workers. Mr Speaker, Sir, I support the Bills.

Mr Speaker: Miss Cheryl Chan.

4.34 pm

Miss Cheryl Chan Wei Ling (East Coast): Mr Speaker, I will be touching on the CPF (Amendment) Bill. As the CPF is one of the key financial resources for most Singaporeans, it is imperative that any changes to be introduced are properly communicated and due care be given to enable the public to understand what these changes mean to them.

Given there are a number of amendments to be made and a few areas where the specifics to the conditions laid out are not entirely clear, I wish to seek several clarifications.

Under clause 4 section 15AA, allowing CPF to make automatic disbursements to the member if he or she is suffering from a specified significant condition.

First, can more details be shared on the significant condition that entails this exception? Does it refer to a health condition, and if so what kind, or does it refer to a financial situation of the said member?

Second, if the member is currently covered under a social assistance programme, will the CPF disbursement impact his or her eligibility from continued assistance under the current social assistance scheme? I hope that these discretionary disbursements based on the member’s situation is meant to help supplement their situation and does not have the unintended consequence of putting them in a worse position, should they be relieved of any social assistance programmes or the support scheme being significantly reduced after the lump sum disbursement is made.

Under section 13, lifting the cap annual limit for certain types of voluntary contributions to the Medisave account. I believe this move is a welcome one, especially for those self-employed, better enabling and ensuring that their healthcare needs are taken care of.

Does the Ministry have any projections on the implications of these changes in the form of retirement adequacy and to what extent will it help the self-employed or those working in the gig economy? These voluntary contributions can be paid either by the member or from their family members’ contribution.

With an ageing population in Singapore, whilst the younger generation helps to contribute to their parents' or grandparents’ MediSave accounts and will bridge the immediate support for their healthcare needs, have we considered what are the correlated effect that would be on the family members assisting to top up the CPF of their loved ones? Will the same issue of healthcare MediSave sufficiency be an issue for the next generation if they do not have sufficient cash set aside for medical purposes or are without additional medical insurance? I think it will be more beneficial for the younger cohort of the working population to be offered financial literacy on how to better manage their retirement needs and in the process learn to balance their own needs versus providing for their parents or the elderly.

Another area is providing a new and simplified process for the distribution of unnominated CPF monies on a member’s death. This is certainly an applauded move. As in February this year, it was just shared that only more than two in five CPF members have made a nomination with those among 65 and above higher at three in four having done so.

Tying this point to the earlier note I made about the discretionary automatic disbursements to the member, if he or she is a beneficiary or nominee of the CPF account from another person, would there be a specified limit that prevents them from receiving any future social support?

And, Sir, going beyond the amendments of the Bill, I would like to raise two other points for further consideration.

First, on the special needs community. Caring for the special needs community and having them included in the scheme is something that I feel passionately about. I had previously raised in this House regarding the creation of micro jobs to ensure that these individuals when they become young adults, are able to gain some independence and be a part of the workforce.

Thus, against the backdrop of changes to the CPF in allowing more relaxation on the withdrawal of CPF monies, I would like to suggest that we also consider how best to safeguard this community and by extension to their families and caregivers in times of need. For example, the simplification of processes for them to access the funds when their caregivers are no longer around or to apportion more funds for their medical needs as they are more likely to require that on the long run.

Next, rethinking the CPF’s current allocation rates design. With the landscape of work changing and more choosing to embark on flexi work or self-employment, perhaps it is timely in the near future for us to review the CPF’s allocation rates to the three different buckets – the Ordinary Account (OA), the Special Account (SA) and the MediSave Account – to better provide for retirement adequacy whilst ensuring we meet our housing, education and healthcare needs.

With the current design categorised according to age groups, perhaps it might be worth rethinking if more nuances are required in the current allocation principle and rates. Maximising contribution to the OA during the active income years before increasing the allocation to the SA from 35 to 55 years of age and subsequently for the MediSave to be raised through the SA and OA after a specific age and in line with medical costs during that time period. This is especially so as the nature of work is fast evolving, more are seeking self-employment. The definition of job security and stability do not have the same representation as before. There are also individuals who could be taking on more than two jobs at different stages of their life. Hence, I suggest that a review be undertaken and more holistically ensure that we are able as a nation to better cater for retirement adequacy for all.

Sir, notwithstanding what I have raised, I rise in support of the Bill.

Mr Speaker: Mr Melvin Yong,

4.41 pm

Mr Melvin Yong Yik Chye (Radin Mas): Mr Speaker, I stand in support of the two Bills, in particular, the Retirement and Re-employment (Amendment) Bill, which seeks to increase the statutory retirement and re-employment age to 65 years and 70 years respectively by 2030.

Sir, the amendments to the statutory retirement and re-employment ages are a timely one, as Singaporeans are living much longer than ever before. We currently have the world’s third highest life expectancy, with the average Singaporean expected to live till about 83 years old. With better healthcare, this is projected to increase to over 85 in 2040.

As our lifespan increases, it becomes vital that we pay attention to the longevity of our careers. Long gone are the days when it was the norm to join a company and work in the same company for the entirety of one’s career. There is a new saying, “Career mobility is the new career stability”, and I know that many of our younger workers, particularly the PMETs, live by this axiom.

But how mobile are the careers of our mature workers? Statistics and ground feedback suggest that it is much harder for mid-career and mature workers to find a new job after being displaced. Among the 34,000 jobseekers who sought career coaching help from Workforce Singapore and the Employment and Employability Institute in 2020, 60% were above the age of 40 years old. Of these, four out of 10 were unable to find jobs within six months. On the ground, we hear of the deep anxieties that mature workers have if they are displaced, particularly if they are close to the retirement age.

It is therefore important that we place emphasis on our late-stage career mobility when we are young. As we prepare Singaporeans for a longer career, I hope that the Government’s public education campaigns about retirement adequacy can go beyond financial terms, but also on how to secure fruitful and meaningful work when they reach their silver years.

Mr Speaker, I am heartened that the Government has put in place many incentive schemes to boost the employability of our seniors. The Minister for Manpower himself touched on them during the Parliamentary Sitting last month, where he gave a breakdown of the schemes under the Senior Worker Support Package.

Schemes such as the Senior Employment Credit, the Senior Worker Early Adopter Grant, the Part-time Re-employment Grant and the CPF Transition Grant have helped to keep the employment rate of those aged 55 to 64 years old at over 67% and the employment rate of those above 65 at 28.5%.

While these schemes have helped Singapore to maintain relatively high levels of senior worker employment rates, the underlying assumption behind these schemes reflects the societal stereotype – that we need to subsidise employers to hire mature workers. As we extend our retirement and re-employment ages, combined with a rapidly ageing workforce, this will not be sustainable.

We should therefore strive to think of new solutions to encourage companies to view senior workers as assets and not liabilities. Perhaps we could provide corporate tax incentives to companies that significantly invest in senior workers, for example, those that actively hire and train over 30% of its workforce above the age of 55. Perhaps we could provide co-funding for companies that wish to revamp their workspaces to be more inclusive, especially to the needs of senior workers. Having schemes that go beyond wage subsidies would encourage companies to pay serious attention to investing in their silver workforce.

Mr Speaker, as we debate the issue of retirement, it is also important to place an emphasis on retirement adequacy. According to the Mercer CFA Institute Global Pension Index, Singapore has the best retirement system in Asia and ranks 10th in the world. This reflects the strength of our CPF system, particularly the CPF LIFE scheme which ensures that seniors beyond the age of 65 will receive a monthly payout no matter how long they live.

However, the latest Household Expenditure Survey conducted in 2019 found that retiree households living in public flats require more than just their CPF payouts and most receive money from their children and family members. While CPF LIFE can help to close the gap in retirement adequacy, the scheme is meant to cover a basic level of costs during retirement and may not be sufficient for those who do not properly plan for their retirement needs.

A study published by AIA Singapore in July 2021 reported that 60% of Singaporeans face an uncertain future by not prioritising their retirement planning. This is a worrying trend and we certainly need to focus on improving the financial literacy of Singaporeans, so that they understand the importance of building a nest egg for their silver years while they are still young.

To help families better plan for their retirement years, the NTUC launched a social enterprise, MoneyOwl, to provide reliable and competent financial advice. MoneyOwl’s financial advisers do not operate on commissions, which means that they do not have an incentive to sell consumers products that they do not need.

Sir, in conclusion, the amendments to the Retirement and Re-employment Act are timely as Singaporeans are living longer than ever before. We must strive to help Singaporeans work longer more meaningfully, if they wish to, by changing the narrative of hiring senior workers into a worthwhile investment instead of a hire that comes with hefty Government subsidies.

With that, I support the two Bills.

Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 5.10 pm.

Sitting accordingly suspended

at 4.48 pm until 5.10 pm.

Sitting resumed at 5.10 pm.

[Deputy Speaker (Mr Christopher de Souza) in the Chair]

RETIREMENT AND RE-EMPLOYMENT (AMENDMENT) BILL

Debate resumed.

5.10 pm

Ms Janet Ang (Nominated Member): Let me start with a quote by Pope Francis: "Work is a necessity, part of the meaning of life on this earth, a path to growth, human development and personal fulfilment."

Thank you, Mr Deputy Speaker, for the privilege to join in the debate on the subject of retirement and re-employment.

Singapore is faced with an increasingly tight labour market due to the rapidly ageing population. This, coupled with a shrinking working-age population caused by Singapore’s declining fertility trend which hit a low of 1.1 resident TFR in 2020, will further exacerbate our tight labour market situation. Hence, keeping seniors in the workforce for as long as they are willing and able, will help ease the manpower situation somewhat.

Life expectancies have risen to such levels that many people think that they do not have sufficient savings to meet post-retirement living and healthcare expenses, and therefore want the option to work for longer so as to improve their financial adequacy for retirement.

I support the raising of the statutory retirement age and re-employment age, and that our senior workers have the option to stay employed longer if they so choose.

Legislation will help to ensure consistent fair treatment of senior workers by all employers and deter possible senior worker abuse.

Equally, if not more important than legislation, are the structural changes needed at the workplace, the support needed to help mature workers to better prepare for retirement in addition to the all-important CPF adequacy and MediShield Life, and above all, the need for mindset change on everyone’s part.

Whilst there is general support by both retired and retiring seniors as well as by companies, some of the key questions linger in their minds include: seniors thinking, "Will there be a change in CPF withdrawal age resulting from this amendment?" Well, everyone should be quite glad to hear the Minister confirm that there will be no change to the CPF withdrawal date, which incidentally is a sacred cow, a sacred milestone, not to be touched.

Another question is that if they are re-employed to do the same job, will they get the same compensation? How can seniors, even the so-called retired ones, continue to contribute their experience and skills in building and strengthening Singapore?

As for employers, some of the questions they have on their minds may include: how will this impact the cost of doing business? Will senior workers be able to pick up the skills and competencies needed for today’s competitive market? Will they be able to cope with digital disruptions? How do I implement succession planning without being misconstrued as having an ageism attitude? And with millennials in search for meaningful roles, should seniors not be making way for them?

All these are very good questions, and many Members in this House have already touched on quite a few of them.

For me, I am part of the retiring/retired cohort. I consider myself very blessed to be reasonably prepared for my second half. When I was in my 40s, I was recommended the book "Half Time" by Bob Buford and that got me thinking. Before I turned 50, I attended Cenacle Sister Linda Lizada's retreat on mid-life transition and that started me planning and praying. Finally, at 60, I said "yes" to retirement.

I have been preparing myself for a meaning and purposeful life beyond the IBM employee pass, which I carried for 33 years. Admittedly, however, it was still a moment of truth to be reckoned with when the day actually came. So, for the many who were less prepared than I, and for some who were even caught by surprise, I empathise with them.

I would dare say that most in my generation are generally ill-prepared and cannot quite cope with the drastic physical and physiological change at the point of retirement. We are the Baby Boomer generation, with strong work ethics and most have given their all to their jobs and growing Singapore's economy. So, transitioning from active employment to retirement, for many, is like dropping off a cliff. This experience often leaves the individuals frustrated.

There is a need, therefore, for companies and the communities supported by the Government and civil society to better prepare our senior workers for what I will call the "shoulder season". Apparently, this is a travel industry term indicating the time between the high and low travel seasons of a specific destination between the peak and off-peak months. So, I advocate that companies begin a gentle off-ramp programme spread over five years for their employees between 55 and 65 – maybe even 70.

With a longer expected lifespan, even the seniors who do not choose re-employment after having worked for almost 40 years, I advocate that, collectively, we start a new focus on the shoulder season. Let us coin a new life stage. Ringfence this age demographic, define the benefits, including, perhaps, CPF, especially for this life stage, and build a whole new economy with ancillary services and so on around this social tribe. Make it a stage of life that people look forward to.

And, seniors, we need to help ourselves. In a brainstorming session with Singapore Human Resources Institute (SHRI), we came up with some ideas for the Public Service and private sector employers to consider.

Firstly, not everyone wants to continue on full-time basis till the end of their re-employment age. So, organisations will need to be flexible and redesign jobs for part-time work, for shared roles and even cater for permanent work-from-home jobs.

Secondly, organisations could consider offering internal gig jobs, which are skills-based and projects-based. Such gig jobs may already be contracted out today but, if they are offered to employees, will help the employees in this age group to apply the skills that they may have decided to pick up and prepare for their shoulder season. This will also benefit the company as they will be building up their contractual fringe, as termed by Charles Handy in "The Age of Unreason", with trusted employees who may, over time, transition to become external associates paid not by wages but by fees for results produced.

Thirdly, more companies could join the career trial for mature workers, which gives both parties a trial period before contracting.

Organisations could also facilitate seniors to transition from their functional roles to be advisors, coaches, trainers so as to pass on their wisdom and experience to the next generation.

Government and the industry could also consider investing in a platform to identify and help match the available supply of senior resources to demand, both paid and voluntary.

Another idea includes, besides restructuring jobs, there is also a need to rethink job positioning, separate seniority, job skill levels and the management span so that it will allow senior civil servants and senior functional heads to continue to contribute in areas where their skill level and experience can be utilised without them feeling that they have been demoted.

Along with these structural changes, the need to step up retraining cannot be over-emphasised.

One other idea is that of reverse-mentoring. SBF Foundation's Employability Fund supports such initiatives and I thought to share this story of one of the companies in this programme.

The mentee, a trans-shipment manager in his late 60s and who has been with the company for three years, is learning how to use technology – the system and the platform of the company – to do his job. Despite his age, he is willing to try and learn. The mentor, a much younger but senior executive who has been with the company for two and a half years, has been helping the mentee to do this virtually due to COVID-19. She scheduled time from her very busy schedule to help the mentee and he has definitely benefited from it. This intergenerational type of engagement is also good for the soul.

For the senior workers, we do need to help ourselves by recognising that performance and attitude are still the best ticket to a mutually satisfying re-employment contract. The senior worker does have to acknowledge their own energy level, their strengths, their ability to contribute, their attitude and mindset, and recognise that compensation should be tied to the job role and not to their seniority.

The executive director of the Singapore National Employment Federation (SNEF) shared with me that Singaporean companies, generally, support the proposed legislation and are open to hiring senior workers.

Many companies, however, do not have the systems and capabilities to execute and are, therefore, very appreciative of the Government's Senior Worker Support Package and the Senior Worker Early Adopter Grant, which are targeted to help companies accelerate enhancement of their company HR policies to support re-employment of mature workers for both full-time and part-time work.

There is also the idea of shared HR services which can serve to enable and support our SMEs to better support the implementation of the legislation and the structural changes needed to achieve the desired outcomes.

Preparing our workers for their shoulder season begins with preparing them through their careers. I would like to advocate a key structural change that needs to be considered in the system.

One, promotion should not be by seniority but, rather, by the individuals' performance and capabilities as demonstrated by their work portfolio, including perhaps a willingness to have short working stints in ASEAN markets and elsewhere.

A second change could be on succession planning. Succession planning is critical for the sustainability of every organisation. So, there should be fair practice policies to embrace diversity and inclusion and not be the excuse for discriminating against older employees to make way for younger staff. So, we should look out for ageism mindset not to set in.

I am also advocating that our tripartite partners and companies provide a different kind of career counselling and coaching for their staff aged between 45 and 55 years of age during the pre-retirement phase.

At this stage of their life, they ought to be enrolled into a mid-career transition programme. This programme should provide the workers with mid-career strategies to help them think about their physical health and financial health, adequacy for retirement, think about their strengths and what keeps them motivated, think about their skills gaps for future jobs with the company or the industry.

It is heartwarming for me to know, when I spoke to quite a few HR officers, that there are a good number of Singapore companies which already, on their own, have HR policies that support keeping their mature workers for as long as they are healthy, able, positive-minded and willing to work. These companies find that mature workers who have been with the company for more than 10 to 15 years are more loyal, job hop less, are more appreciative of having the opportunity to work and more productive because of their experience and skills built up over the years.

I would like to close with a shout-out to all our senior workers who are serving tirelessly in our community in one way or another. To quote Martin Luther King, "No work is insignificant. All labour that uplifts humanity has dignity." I support both Bills.

Mr Deputy Speaker: Ms He Ting Ru.

5.25 pm

Ms He Ting Ru (Sengkang): Mr Deputy Speaker, retirement is a word that means so many different things to each of us. For the lucky ones amongst us, it brings with it notions of freedom and leisure, golden years where one is no longer a wage slave. On the other end of the spectrum, it brings with it negative connotations of decline, withdrawal and fears about whether the money in the bank account would be enough to stretch to the end of the month.

It is to address this financing of our retirement that prompted the formation of the CPF system in the first place.

Our CPF system was introduced in 1955, before the time when some of our present retirees today were born. Its official mission is to be the bedrock of our social security system, with a strong emphasis on self-reliance.

This is something that we cannot disagree with and, indeed, most of the residents we do meet tell us that they would love to be in a position to help themselves and their families.

Yet, over the years, the changing structure of our economy, demographics and, indeed, the world we live in has meant that many Singaporeans find themselves in a difficult position today, where no matter how hard or fast they run on the treadmill of life, they find themselves unable to keep up and end up falling off and find it next to impossible to get back on again – and not for want of trying.

Our CPF system, as the expressed bedrock of our social security system, has to be sensitive and cognisant of these difficulties experienced by our fellow residents.

Our CPF policies have, as a response to our changing economy and society, evolved and expanded in an attempt to cover functions beyond merely a savings for retirement, to be used to pay for many of lives' expenses – from the funding of the purchase of our homes to paying for medical expenses for ourselves and our family members.

Yet, at the core of it is the notion that our CPF funds must be kept locked up with a special key and that they would only be unlocked at a certain time and in a certain manner. This may be laudable but it is little wonder that many of our residents do approach us for assistance with CPF matters.

I am sure that most of us here in this House have come across cases where a loved one, often the sole breadwinner of the family, either passes away unexpectedly or suffers from a condition that results in them being unable to carry on earning an income.

When such unexpected events happen, family members, more often than not, struggle to process the shock and have to make changes to their daily lives. At the same time, they often find themselves having to deal with the additional stress and paperwork to unlock CPF funds to tide them through difficult times, which not all are well-equipped to tackle even when not dealing with the grief or shock that colours everything in the overwhelming aftermath of such an unfortunate event.

From this perspective, the amendments proposed by clause 50 of the Bill, which allow for greater flexibility and efficiency for disbursement of unnominated monies in the event of a member's death are welcome. These changes allow the Public Trustee to reimburse reasonable funeral expenses incurred by a beneficiary out of the unnominated monies. It also allows the Public Trustee to pay a sum of money up to a specified limit to be released directly to a beneficiary representative for disbursement in accordance with intestacy laws.

However, I would like to request the Minister to clarify what the specified limit would be and how the amount is, ultimately, to be determined. Would it be an amount that changes like the Retirement Sum Scheme?

We also welcome the removal of the ceiling for voluntary contributions to MediSave. This does help to prepare us in an ageing society and gives more flexibility to those who are able to do so to better plan for retirement and care needs while still active in the workforce. However, could we please have further clarity on whether CPF Board has an estimation of how many people would be affected by this?

Moving on to some of the other proposed amendments, I have further comments and would like to seek some more clarifications.

First, we welcome the flexibility introduced in clause 5, allowing a member to withdraw funds from his Retirement Account, subject to the condition that they must be receiving an approved annuity stream that is outside of the CPF. However, I would like to ask for greater clarity on how such other annuity streams are assessed and, ultimately, approved.

Likewise, the same clause introduces automatic withdrawals if the Board is satisfied that the member is suffering from a significant condition, without the need for the member to apply for such withdrawals. The explanatory note further clarifies that this only relates withdrawals from the Ordinary and Special Accounts and not the Retirement Account. If this is on the understanding that the member is extremely ill or incapacitated, it would mean that it would ease the financial and administrative burden on family members who might need to, otherwise, apply through the Courts or otherwise find additional funds to pay for medical bills or living expenses. Could the Minister confirm this is correct?

Would the Minister also please clarify if automatic disbursements would take place in all cases when a member has a significant condition? This may not be necessarily desirable in cases where the financial circumstances of a member could mean that immediate disbursement of funds is unnecessary. Such an automatic disbursement then may deprive the member of interest on these released funds which would be challenging to obtain in other savings accounts.

The final point relates to CPF nominations. The current position is that any nominations for recipients of CPF funds upon a member's death is automatically cancelled upon a member's marriage. Does this remain unchanged with the amendments being proposed?

Mr Deputy Speaker, my clarifications, notwithstanding, I support the Bill.

Mr Deputy Speaker: Mr Ang Wei Neng.

5.32 pm

Mr Ang Wei Neng (West Coast): Mr Deputy Speaker, Sir, I stand in support of the Retirement and Re-employment (Amendment) Bill.

In 2010, 9% of the Singapore’s population was aged 65 years and above. Singapore was then considered as an ageing society. In 2020, 15.2% of our population is above 65 years old. Singapore has transited from an ageing society in 2010 to become an aged society in 2020, just within a span of 10 years. By 2030, it is projected that more than 20% of our population will be 65 years old and above. That is, we will become a super-aged society like Japan. Many economists consider this as a silver tsunami. But how do we turn the silver tsunami into a silver lining?

Well, we need more of a whole-of-Government approach to tackle the issue of a super-aged society. Meanwhile, I would like to make some suggestions over three broad areas.

First, to allow more senior Singaporeans to work as long as possible, where health permits and Singaporeans willing.

Second, have flexible housing arrangements to allow as many elderly people as possible to age at home.

Three, to create a National Volunteer Registry to encourage as many seniors as possible to volunteer when they can. I would suggest to name this programme as the Orange Compass and I would elaborate on the programme later.

Many of us would agree that with better nutrition, better medical advancements and better living conditions in Singapore, Singaporeans live longer. Today’s 65 years old is like 55 years old decades ago. Hence, I totally agree with the amendment in the Retirement and Re-Employment Act to increase the retirement and re-employment age progressively from next year.

Currently, almost 60% of the Singapore’s workforce is in PMET jobs. When they turn 55 years old, their productivity is less likely to decline as compared to the blue-collar workers. Even for the blue-collar workers, many are still fit and healthy at 55 years old, their productivity is unlikely to deteriorate significantly when they turn 55 years old. Hence, it is arbitrary to start reducing the employer’s CPF contribution rate at 55 years old.

I propose that MOM and the Tripartite Workgroup on Older Workers consider, at the right time and, hopefully, earlier, to reduce the employer’s CPF contribution rate only at 60 years old and not 55 years old. If that is a reality, the employer’s CPF contribution rate for those below 60 years old would remain at 17% before reducing to 14% for those between 60 and 64 years old, and 10% for those between 65 and 69 years old, and 8% for those who above 70 years old.

To mitigate the financial impact on the employers, we certainly hope that MOM will strengthen the senior worker support package to ease the transition.

Next, I support the NTUC’s efforts to urge the employers to redesign work scope, use automation to reduce manual works so that more seniors can continue to work till 70 years old or beyond. Before I continue, I would like to declare my interest as the CEO of ComfortDelGro Taxi.

As part of the efforts to create more jobs for those above 70 years old, I would like the Government to consider increasing the retirement age of taxi drivers to 78 years old progressively, up from the current 75. The retirement age of taxi drivers was last changed and revised in 2012. With more intelligent safety features like autonomous emergency brake and lane departure alert becoming a norm for taxi, it will be safer for older taxi drivers to drive, provided they pass the stringent annual medical screening. Thus, the time is ripe to review the retirement age of taxi drivers.

During my weekly house visits in the past decade, I find that more and more elderly people are staying alone. This is not the most desirable situation. With the successful launch of Community Care Apartments in Bukit Batok, I hope HDB can accelerate the launch of Community Care Apartments in more HDB estates, especially the older towns. To encourage more seniors to take up Senior Housing Bonus scheme, I would like to urge HDB to waive the resale levy. This will also encourage the seniors to monetise their flat for better retirement adequacy.

While waiting for HDB to build more Community Care Apartments, I would like to suggest that MOH and MSF further fund the Senior Activity Centres or SACs at the HDB studio apartments to provide similar services that are planned for the Community Care Apartments. For example, the SACs can provide care and support services as well as simple home fix services to the existing HDB studio apartments.

As we become a super-aged society, it is not tenable to employ more and more foreign workers to take care of the less mobile seniors. The average life expectancy of Singaporean is 84 years old but many are expected to be in poor health in the last 10 years of their life .

Henceforth, it is important to encourage seniors, near retirement age or for those who just retired to remain active and volunteer to help other seniors who are less mobile or in a poorer health situation. In view of the above, I would like to recommend the Government to start a National Volunteer Registry which I would name "Orange Compass". The Orange Compass could have the following benefits.

It could encourage more abled seniors to volunteer to earn points and the points earned would be able to be kept in the central registry, preferably using block chain technology.

If we can find sufficient sponsors, the points accumulated can be converted to food vouchers, taxi vouchers and so on to mitigate the cost of living for the seniors that volunteer.

The points earned can also be kept for the future to exchange for services when the seniors become less abled. For example, seniors can volunteer when they are in their 60s and 70s, that is, when they are more abled. When the seniors are in their 80s, they can use the points accumulated in the registry to exchange for services provided by future volunteers to bring them to the hospital for medical check-ups, for example.

The Orange Compass can provide the direction for more abled seniors to volunteer. When the seniors are assured that their volunteer efforts will be recognised, more will volunteer. When the seniors know that their volunteer efforts can be stored securely in the registry and redeem for services in the future, they are more likely to volunteer as well. Let me continue in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Deputy Speaker, according to the UN definition, a senior is someone who is above 65 years old. In 2010, 9% of our population was aged 65 and above. In 2020, the figure was 15.2%. By 2030, it is projected that more than 20% of our population will be 65 years old and above. In other words, our population is ageing rapidly. Economists often describe an ageing society as a silver tsunami or a silver crisis. Is that really the case?

I believe that with good planning and Singaporeans working together, we will have the opportunity to turn a silver tsunami into a silver lining and we can truly "see an elder at home as a treasure". Raising the retirement and re-employment age is the first step, so I support this Bill.

However, legislation is one thing. The more important thing is how Singaporeans treat older workers. Prof Tommy Koh has called on Singaporeans not to discriminate against older workers. Hence, NTUC and SNEF have been working together to accelerate mechanisation and automation, so that blue-collar workers will still be able to do their jobs beyond the age of 65.

In recent years, autonomous driving technology progressed by leaps and bounds. Many taxis are equipped with automatic emergency brake and lane departure alert. Hence, I urge the Government to raise the retirement age of taxi drivers to 78 years old. Of course, older taxi drivers have to go through health checks every year because safety comes first. This way, more older Singaporeans can continue to work beyond the retirement age.

(In English): Mr Deputy Speaker, Sir, Singaporeans are better educated over the years and more are using their brain power rather than their physical strength, to contribute to the economy. At the same time, Singaporeans are living longer with medical advancement and accessibility to medical care.

Thus, we need to create an environment for Singaporeans to work as long as possible and as long as they are willing, to meet the requirements of the growing economy, rather than tapping more on the foreign manpower.

Increasing the retirement and re-employment age progressively is definitely the right step in the right direction. Concurrently, we also need to tap on the silver generation for volunteerism as they prepare for retirement. If coordinated well, the Orange Compass can also help to mobilise the untapped resources to turn the silver tsunami into a silver lining.

Mr Deputy Speaker: Mr Shawn Huang.

5.42 pm

Mr Shawn Huang Wei Zhong (Jurong): Mr Deputy Speaker, Singaporeans are living longer, continue to be mentally active, can and want to remain relevant. Relevant to their families, community and society.

Although we have an ageing population, our talent resource in Singapore remains strong. With a more senior and active workforce, we have a strong foundation of capabilities, experience and knowledge for the next generation of workforce to build upon.

A strong baseline of core capabilities coupled with decades of experience can enable our senior workforce to become more agile and acquire new skills quickly. But to do this, we need to better map and acknowledge skillsets so that relevant skills can be transferred and applied in a different and dynamic context.

We must continue to have an open mind to understand the relevance of past experiences and the transference of related skills in different operating context. To view individuals for their strengths and how their strengths can be relevant and accretive. At the same time, the workforce must continue to adopt a lifelong learning attitude, more so with the objective of being relevant for life.

The move to increase the retirement and re-employment age, further removes the barriers and antiquated mindsets of being senior. However, we must also be pragmatic in our implementation, there are realities with getting on with age. But given the speed and depth of digitalisation, the working environment can be highly inclusive.

This is a step in the right direction, but there is much work left to be done. We must make sure that we work hard to unlock this potential.

With changes to the retirement and re-employment age coupled with the tweaks to streamline the CPF system, I look forward to continued employment with more secure retirement outcomes. Mr Deputy Speaker, I support both the Retirement and Re-employment and the CPF Bills.

Mr Deputy Speaker: Ms Mariam Jaafar.

5.45 pm

Ms Mariam Jaafar (Sembawang): Mr Deputy Speaker, I rise in support of the Bills moved by the Minister for Manpower

First, the Bill on Retirement and Re-employment. The proposed amendments give older workers the flexibility and choice, not obligation, to continue working for a longer time if they are willing and able, in line with increases in life expectancy and our ageing population. It gives older workers the opportunity to increase their retirement savings.

Older workers bring invaluable experience to any organisation. We all know colleagues, friends and family members who can, want and do contribute, long past the current retirement age. But it is also true that as a person gets older, sometimes, you lose a little in terms of physical ability but also, mentally, you start to lose a bit of sharpness, speed, drive and other priorities become more important.

So, let us face it, for a number of our older Singaporeans, they just do not want to have to keep working at the same pace or keep having to reinvent themselves, because work can be a grind, especially if you are in an industry that is being disrupted, especially when there are younger co-workers who are eager to move ahead, who are all too happy to, as we say, "chiong". And on their part, companies need to be able to create space for these workers to move up the ranks faster.

The re-employment framework has always been given flexibility to employers to adjust re-employment terms and roles. As the pace of change and disruption in industry only continues to grow faster, more effort will be needed, as called out by the Tripartite Workgroup, to promote more inclusive and progressive workplaces, including redesigning jobs and reskilling, providing more part-time re-employment opportunities. Some companies are also looking into how to fractionalise jobs.

When doing these, I urge organisations to engage retiring workers on how best to do this; they are often in the best position to propose the most optimal ways. Indeed, retiring workers can and should also plan and propose it themselves, rather than wait for their employers to do it.

But whether it is redesigned jobs, part-time or fractionalised jobs, more and more older workers may not stay in the same roles when they enter into re-employment contracts. I believe, by and large, older workers will accept that there may be commensurate adjustments to their employment terms – wages or benefits.

In a previous response to Parliamentary Questions, then-Minister for Manpower Mrs Josephine Teo shared that the vast majority of re-employed workers in the same job did not experience any cuts to wages and benefits.

This is comforting, suggesting that the majority of employers are playing ball, in line with the spirit of re-employment. However, many of us would have also received appeals from residents, that this is not always the case, such as for my resident Mdm L. Mdm L had worked for 20 years for her company and had recently retired and been re-employed on a re-employment contract. When COVID-19 forced the company to undertake a retrenchment exercise, like her colleagues, she felt anxious. But that anxiety turned into dismay when she learnt that her retrenchment payouts considered her not as an employee who had served for 22 years as she had, but as an employee who had served for two years, because the re-employment contract reset the clock on retrenchment benefits. Mdm L felt incredibly let down, given her loyalty to the organisation.

Having deemed that a given employee continues to be able to contribute to the organisation by offering re-employment, is it not unfair for retrenchment benefits not to recognise his/her full length of service, especially if nothing else has changed in their roles, but even if the roles have been adjusted a bit?

Mr Deputy Speaker, allowing businesses flexibility to make adjustments when offering re-employment contracts continues to be very important. But it cannot be at the expense of long-serving employees.

As the number of older workers on re-employment contracts increases, as a number of re-employment workers who do not stay in the same jobs but are reassigned to different jobs, redesigned jobs, or other adjustments to their roles, or move to part-time status, more attention and protection should be focused on the fair and dignified treatment of re-employed employees, during moments of truth such as retrenchment exercises, which will remain a feature of the landscape, as technology and other disruptions continue. So, I hope this will be given attention in the implementation of any legislation.

At the same time, we should continue to review the social safety nets afforded to older workers, lower-income ones especially, so that today’s retirees and future generations get the dignified retirement that they have earned.

Notwithstanding the above, I support this Bill.

Now, the CPF Bill. Mr Deputy Speaker, the proposed amendments to the CPF Act provide welcome simplification and streamlining of various CPF processes.

I would like to focus only on the proposed amendments related to the disbursements of unnominated monies to a beneficiary representative. The disbursement process today can take a long time and feel quite complex to family members. This is especially the case when there are large families with a claim to the CPF monies.

Recently, I had a Meet-the-People Session (MPS) appeal where the case had been in limbo for more than a year, with several back and forth queries with the Public Trustee Office. The proposed amendments would allow more families to receive payouts sooner, during a difficult time.

The increased efficiency, however, should not come at the expense of the next-of-kin deserving of a share of the funds, particularly in situations where there are family disputes. I would like to clarify with the Minister for Law the following.

What recourse does a next-of-kin have in the event that they do not agree with the appointment of the beneficiary representative, or with how the beneficiary representative disburses the CPF monies? Does it automatically become a private matter to be settled among the beneficiaries, which may or may not result in a Court process or do they continue to have recourse to a public agency which may be more trusted to administer the disbursement process in accordance with the relevant Acts.

Regardless of whether they are named as nominees or the account is un-nominated, what efforts are made to contact and facilitate disbursements to Singaporean family members who are overseas, which is now not an insignificant number, especially in light of continued travel restrictions that may make it difficult for them to come back to settle the affairs?

Notwithstanding the above questions, I support the Bill.

Mr Deputy Speaker: Ms Yeo Wan Ling.

5.53 pm

Ms Yeo Wan Ling (Pasir Ris-Punggol): Mr Deputy Speaker, Sir, I shall speak on the topic of the CPF first. The CPF Fund is central to Singaporeans of all ages. From prospective home buyers to retirees, the CPF is the joint result of the blood and sweat of Singaporeans and their firm trust in our Civil Service. More importantly, it is a crucial safety net that Singaporeans rely upon to support themselves and their loved ones when the unfortunate strikes – the loss of livelihoods, be it due to economic circumstances, age, infirmity or permanent disabilities.

The proposed amendment follows closely to this matter and I welcome two main changes to this Act: first, minimising disruption of the Retirement Account with the use of auto top-up; second, the simplification of the language of the Act to inch it closer towards the common everyday person.

First, the Retirement Account. It takes conscientious effort to maintain and keep track of one's own bank account and this is especially the case for our senior citizens. In our pursuit of the bigger, better and faster, Singapore has rapidly morphed itself into a Smart Nation. The flipside of which is that we risk detaching some of our citizenry as we shed the cocoon of a developing nation. It is an uphill battle for many working adults to help their parents navigate finances, and the myriad of accounts at their disposal only complicates the matter. The auto top-up mechanism streamlines the decision-making process of many retirees, some of which could really benefit from this help. I believe this to be an important first step towards a more user-friendly and accessible CPF.

Second, the simplifying of the language of the Act. Streamlining the headers and process to align the practices with MediSave, for instance, makes the CPF Act more approachable and thereby more effective. Previously, I have raised the issues of the disconnected – both in terms of digital skills and language for the residents in my constituency – and this step signposts an important direction to make the word of the Law the word of our people.

In this simplification, however, it is important that we do not lose nuances that protect the same people we have set out to look out for with these changes. As more complicated terms are stripped down, merged or simplified, we need to be clear the intention behind certain changes, as they are not simply a matter of semantics, but whole matters of inclusion and exclusion.

More specifically, I am concerned with the new definition of "significant conditions" in inclusion for the purposes of section 15 and the new section 15AA. It is explained in the Bill that this criterion would be "similar" to that of the previous language of "mental and physical incapacity". I welcome the new lexicon, foremost because it differentiates a disability from one’s identity better than the previous set of language, but I can imagine this new definition, to which the Minister interprets, might prove to be rather ambiguous until tested by real life cases.

Mr Deputy Speaker, this is not a matter of mere semantics. Rather, there are two issues from this change I am concerned about.

First, if any existing beneficiaries would be left out because of the change in wording. On this matter, it would be ideal if the Minister can confirm that the new criteria of "significant condition" is broader and includes those previously counted under incapacity.

Second, this shift in language can send the wrong message to those who are excluded from withdrawing from their CPF because they cannot meet the criteria. Previously, not being able to withdraw funds, as outlined in section 15AA, would simply mean that they cannot prove that their disabilities incapacitated them. This does not discredit or make light of the condition that they do have; we simply mean that this condition, as bad as it is, does not disempower our residents completely. It is a positive message for those who are rejected, one that affirms that they still have some means to fend for themselves.

By changing the language to turn this into a matter of "significance", someone rejected in their application for withdrawal may be misled to believe that the Board and, by extension, the Government, think their condition "insignificant". In such matters, sensitivity, reason and flexibility must be applied in the first few cases under this amendment and the process may be messy. It is my responsibility to raise a word of caution on this matter and it is with time that I trust this interpretation will bring about clarity and trust.

Mr Deputy Speaker, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] I wonder if you have discussed with your parents on the issue of savings. For many senior residents, the best bank for them is called "under the bed" and the most reliable retirement fund is called "secret stash". I believe that we all have conflicted feelings towards modern finance.

However, for uncles and aunties who are not familiar with ATMs, many are not resentful or fearful towards CPF. This is not because it is easier to navigate the CPF system or because it is more reliable than the banks. On the contrary, for many people, the complexity of CPF can be daunting and this is something that we should improve on.

However, for them, the difference is that CPF is trustworthy. They trust in the character, integrity and commitment of the Government. What is contained in CPF is not just money, but also the blood and sweat and trust of the people. This amendment Bill provides provisions for automatic top-ups so that it is more user-friendly for the uncles and aunties. However, we cannot stay stagnant. We must quicken our steps and allow CPF to become the pillar of a dignified and less stressful retirement life.

(In English): Mr Deputy Speaker, in English. In all, this amendment is in line with what I stand for. It brings law to the ground where it matters, it makes the law easier to understand, it makes the content of the law more useful to the people it is to serve. With time, I trust that the initial ground messiness will be resolved with sensitivity, caution and flexibility of ground issues. These concerns notwithstanding, I support this Bill.

Now, onto the Retirement and Re-employment Act (RRA).

In a country like ours with no natural resources and hinterland, our source of pride and success has always been our people. In a world where seniors begin to comprise a growing proportion of society as people live longer and healthier lives, the continued success of our country hinges on the ability to leverage on the experience and expertise of our older countrymen and women.

This is why the Labour Movement welcomes the impending changes to the statutory limits for the prescribed minimum retirement and re-employment ages, as the Government looks to adapt to our changing demographics in accordance with the recommendations by the Tripartite Workgroup on Older Workers.

The emerging generation of seniors is perhaps the most well-educated, healthy and capable of their age group in history. They are a diverse, dynamic group with varying interests and passions. Furthermore, medical and technological advancements of today provide the prospects of a full and enriched life even as our seniors continue to age. As people live longer, lives must be viewed through a different set of lenses. Indeed, we are now looking at a 100-year life. Instead of the conventional way of thinking about life in three phases: education up to the early 20s, working life until the 60s and then a long retirement. We must now be prepared for a multi-stage life, perhaps a more flexible life structure where the end goal is no longer retirement and stopping of work, but one where time as a resource is redistributed differently.

Therefore, approaching our silver years in life need not be merely confined to the idea of retirement and fading off into career obscurity, but rather be seen as an opportunity to live meaningful and happier mature years as we continue to contribute to society while staying active and healthy.

At this juncture, I would like to share an inspiring story of my constituent, Mdm Lucy Ho, who is 71 years young. Lucy worked in SIA Engineering for 39 years. After her first retirement, she took a security course from the WDA and is now working in the Singapore Cruise Centre as a security officer. Lucy believes that her continued journey in the workforce not only allows her to be independent, but also empowers her with a sense of self-worth has she is still able to contribute actively to society.

It is for this reason that the RRA remains relevant, as these age requirements serve not to determine the retirement age of Singaporeans, but to protect eager workers from being retired earlier without taking away their choice as to when they wish to stop working. If the RRA no longer exists, there is nothing to stop a company from choosing to reimpose or reintroduce an earlier company retirement and re-employment age. Furthermore, the ongoing pandemic undoubtedly has depleted the life savings for some and the guarantee of employment for our senior employees provides a longer runway to build up their nest egg once again. Therefore, the changes to the statutory limits to increase the RRA thus is a welcomed move as we look to protect our older Singaporeans who desire to work as it gives them a greater sense of job security and clarity while also providing I would say, businesses the opportunity to continue to tap on a pool of experienced workers.

Mr Deputy Speaker, although these changes to the RRA provide greater employment protection for our older workers, I am concerned that such measures might not necessarily hit the nail on the head. There is no doubt that raising the statutory limits further advocates for senior employment. Yet, raising the statutory retirement and re-employment ages may not be meaningful if senior workers are unfairly displaced even before they reach retirement age. Similarly, raising the statutory ages may not translate to more offers of re-employment.

The point I am driving at is that these changes ultimately do not address the fundamental problem of a negative perception towards ageing. Misperceptions about older workers and persistent ageist attitudes regrettably still exist within our social fabric, as many employers worry about being stuck with workers who are unable to adapt to remain competitive and become an increasing liability for their business.

Yet, ageing does not have to always be associated with deteriorating health, disempowerment and dependency. Instead, we can be a society where seniors are empowered, skilled, healthy and active contributors to society. I recall in the early 2000s as Singapore was establishing her strength in the biotechnology field, we tapped on the expertise of cancer researcher Yoshiaki Ito, who at age 63 was then facing forced retirement from a university in Japan. Prof Ito made the move to Singapore in 2002, and along with him, he brought his laboratory members and became a mentor to many other fine researchers who are now part of Singapore's valuable scientific research community. The experience and know-how of seasoned experts like Prof Ito in the early years were crucial building blocks in helping Singapore achieve her status as the regional biotech hub.

The successful integration of senior employees would require a shift in mentality in the workplace that requires a partnership between both employers and senior employees. Employers have to be willing to take the leap of faith and utilise the current Government schemes to hire and retrain mature workers for the benefit of their companies. Likewise, older employees have to be willing and committed to learning and adapting in an ever-changing workplace. Learning does not cease in our teens or early 20s, and as we have longer lifespans, our society must reconcile with the notion that midlife reskilling and upskilling is not merely a passing phenomenon, but a consistent feature in our 100-year lives.

As such, if reskilling and upskilling is to be a mainstay in our workplaces, then I call on the Government to provide greater support and leadership in providing greater and better career guidance to our older workers in order to extend their work life lifespan. Although the Government has provided various avenues through SkillsFuture Singapore and others, more can be done to engage mature workers in their career plans and provide counsel for those navigating these uncharted waters. If we are to extend the productive years of our seniors, we must look to increase the employability of our seniors and provide them with the proper job fits.

Just as we drew on the experience of Mdm Lucy Ho and Prof Ito, we must now look for opportunities to allow Singapore to use the skills of our senior employees despite potential physical or technological limitations.

In conclusion, while this amendment Bill advances our desire to provide greater protection for our older workers, we must also take measures to ensure that our older workers are well supported in this endeavour for lifelong learning as we seek to ensure that our seniors remain employable. These concerns notwithstanding, I support the Bill.

Mr Deputy Speaker: Mr Abdul Samad.

6.10 pm

Mr Abdul Samad (Nominated Member): Mr Deputy Speaker, Sir, unions have advocated for a raise in retirement age and also re-employment age to provide older workers the opportunity to continue working, only if they wish to do so. On behalf of my fellow union leaders, I would like to put on record that such appeal is not about requiring our workers to work longer, but more so providing the platform for our workers who still want to continue working, not forcing them as it may be perceived.

We believe our older workers can continue earning an income to help meet ongoing living expenses and also strengthen their retirement adequacy. NTUC believes that "having a job is the best welfare". Workers still have the choice to retire early if they decide to do so.

I would like to share with this House on some of the works that our union leaders and NTUC had started much earlier. If I recall correctly, back in the 2018 Budget debate, NTUC had called for tripartite discussion to review the long-term retirement and re-employment ages. Thereafter, a Tripartite Workgroup on Older Workers was convened in May 2018 to review the retirement and re-employment ages and also to consider adjustments to the CPF contribution rates for Older Workers. NTUC then engaged close to 500 union leaders across the services, industrial and public sectors over multiple focus group discussions to hear not just the aspirations that workers have but also their concerns. After several engagement sessions with leaders, our NTUC representatives, Deputy Secretary Gennerals Heng Chee How and Ms Chiam Hui Fong, and my fellow Central Commitee leaders Brother Phillip and Sister Eileen relayed our collective views to the tripartite workgroup.

The workgroup also studied overseas models of retirement and re-employment to analyse best practices that may aid in their tripartite discussion. From their studies, the workgroup then proposed several recommendations prior to raising the retirement and re-employment ages progressively starting in 2022 and not later than 2030. In addition, they also recommended that CPF contribution rates for our older workers from age 55 to 70 have to be raised accordingly.

Notwithstanding the two factors above, the key to successfully raising the retirement and re-employment ages is creating an inclusive and progressive workplace. This means that employers proactively discuss and apply a structured career development plan with their older workers. This will then allow for training and job redesign to raise productivity and longevity at the workplace. Employers must also be encouraged to provide more re-employment opportunities to retain these experienced workers.

Sir, I would like to highlight some recommendations from the workgroup and share some ground feedback.

Our workers cannot be terminated on grounds of age, assurance for continued employment up to the statutory re-employment age and not forgetting allowing our employers to redesign jobs. The role of our fellow workers will have to be reviewed not just with age but also emergence of new technology. This conversation has to start early for our fellow workers, not limiting to just at age of mid-50s. The job redesign is critical so that our fellow workers go for training early and as they age, they can be less physical but more productive with use of technology in their course of work. NTUC can offer our Company Training Committee, or in short CTC, as the platform to train and prepare our workers for re-employment, company by company.

Sir, currently there are already several support measures provided by Government to employers to offset the cost to re-employ our fellow old workers. Measures such as Senior Worker Support Package and the Early Adopter Grant. Employers should be using such schemes to provide re-employment opportunities to workers. Employers should no longer cite cost of hiring or business needs as an expense of having an experience worker at the workplace. Hopefully, such grants terms can be further enhanced to encourage more employers be early adopters and not wait till 2030.

I would like to urge employers to continue to do their part in helping our fellow mature Singaporean workers to continue working if they want to and tap on their experience to guide and mentor the younger workforce.

Sir, I would like to reiterate that unions calling for this raising of RA and REA is not about us wanting our fellow Singaporeans to work longer but, doing our part as unions to ensure our fellow workers that are able and wish to work longer can continue to do so. There will also be workers who may not want to continue working, and hence that is another beauty of this Bill as it does not enforce workers to work longer, but instead, make employers exercise their responsibility to allow older workers to work longer if they want to. Sir, in Malay, please.

(In Malay): [Please refer to Vernacular Speech.] Raising age limits under this Act is a measure taken by the Government following several recommendations by the Tripartite Workgroup in 2019. As a worker there are some points that I would like to raise.

First, employers need to conduct early planning for employees by reviewing their jobs. Employers should accept that early planning is important to give their workers confidence that they can still contribute and continue to work longer. I urge employers to make early preparations for their employees and avoid waiting until the employee approaches the retirement age. Employers should also realise that there are many assistance grants to help them continue employing their workers. Avoid focusing too much on the financial cost of retaining your employees, who have been with them from the beginning.

Secondly, this Act does not compel a worker to work until old age. Instead, it is available only for those who wish to continue working for their own reasons.

The unions and the Labour Movement will continue to serve by giving recommendations to employers and the Government only for those workers who wish to continue working. For those who do not wish to continue working, you can carry on with your retirement plans.

This brings me to my last suggestion for those who opt to retire early. We know that the amendments to this Act are also related to the Central Provident Fund Act. I would like to appeal to the Government to study whether the workers' CPF monies can be withdrawn much earlier for those who choose to retire before the statutory age. This can help ease their financial burden so that they can have a life using the money they had earned when they were working.

Mr Speaker, as this Act does not compel a person to work longer, I would like to ask that the Government consider my appeal for an earlier withdrawal of the CPF, instead of having to wait until they are 65 years old.

(In English): The journey post retirement for a worker always requires some thought. From my engagement with retired workers, it is a real stigma to wake up the next day with no employment and wondering what is next. I remind myself and fellow workers to have a plan early on what to do upon retiring. We should avoid working actively, if possible, at that age, and spend time catching up with our hobbies and what we may have missed or not able to do so earlier.

On this ground, I hope the Government can be flexible to allow CPF LIFE payout to be earlier at the time when the worker decides to retire. I am also aware that more Singaporeans are even topping up their CPF to earn better interests and payout. However, not many are fortunate to be in this condition. Hopefully, the Government can consider this appeal for our workers to enjoy their retirement years with a steady income.

Mr Deputy Speaker, Sir, notwithstanding the above, I support this Bill and appeal to all employers to exercise this Bill with improved benefits to reflect your appreciation to our older workers.

6.19 pm

Ms Hany Soh (Marsiling-Yew Tee): Mr Deputy Speaker, thank you for allowing me to speak on the Central Provident Fund (Amendment) Bill. I would first like to declare that I am a practising lawyer.

Since last year, CPF members have been able to log in to the CPF portal and nominate their beneficiaries using Singpass. Earlier in February this year, the Minister had, in response to my written Parliamentary Question, shared that more than two in five CPF members have made a nomination as of 1 February 2021. I believe and I am confident, that we can do better to improve this figure.

Many Singaporeans may still be unaware that making their CPF nominations before their passing will benefit and bring much convenience to their loved ones.

If a person does not nominate a CPF beneficiary before their own demise, the CPF Board will instead take up to three weeks upon the member's passing to transfer the monies to the Public Trustee Office (PTO) after accounting for transactions such as MediSave deductions for hospital bills. The PTO will then begin searching for eligible beneficiaries under the law after that. Furthermore, I understand that the PTO will then typically disburse the un-nominated CPF monies within four weeks after the eligible beneficiaries submit the required documents and pay an administrative fee.

I am therefore glad to learn that one of the amendments brought about from this amendment Bill aims to achieve more expeditious payouts by allowing the PTO to disburse un-nominated CPF monies to a beneficiary representative.

In this regard, can the Ministry share how the amendment will assist in shortening the timeframe for issuing the un-nominated CPF monies to the eligible beneficiaries?

Apart from streamlining and expediting the release of funds for the un-nominated cases, I believe that we can do more to encourage Singaporeans to make their CPF nominations, as that will allow their CPF monies to be distributed to preferred beneficiaries faster and without incurring fees.

In the past year, it has been heartening to see the efforts made by the Government in raising awareness in this aspect through short skits featuring the famous Liang Xi Mei character and estate planning workshops organised by various Community Clubs (CCs) with partners such as The Law Society of Singapore.

Apart from these efforts to raise awareness amongst Singaporeans regarding the importance of making CPF nominations, I believe that we should also introduce more tangible benefits to encourage more people to do so.

Currently, the Registry of Births and Deaths would notify the CPF Board upon registering a member's death, who would then distribute nominated CPF monies, typically within a month of the member's passing.

During the Budget debate earlier this year, I stressed on the importance of releasing the funds expeditiously to the deceased's family and subsequently shared with the CPF Board several anecdotes about my Woodgrove residents who became financially strapped and approached me for assistance when their pillar of support passed away unexpectedly.

Making life easier for a deceased's loved ones should be approached as a practical pushing factor for one to make their CPF nominations during their lifetime.

I hope the Ministry can look into revising the existing SOPs such that upon the passing of those who have made their CPF nomination, the CPF Board will automatically trigger a notification and an immediate upfront payout of $10,000 will be transferred to the nominee via PayNow to the nominee's bank account. The nominee can then use this sum to defray the funeral expenses of the deceased.

Next, the CPF Board should target to release the remaining sum to the nominee within seven days after that, which will come just in time to alleviate the family's financial burden. Typically, the family will, after completing the deceased's funeral and cremation, begin to discuss how to resolve the other estate-related issues pertaining to the deceased, such as the need to expend more costs in engaging a lawyer to apply to the Court for either a Grant of Probate or Letters of Administration.

In the Homes-Rahe Stress Scale, the death of a loved one, particularly a spouse or parent, is ranked as the most stressful life event, while a divorce is ranked second.

Mavis Hetherington, a renowned professor of Psychology, and a leading researcher on the impact of divorce on children's development, once stated that "divorce is not a single event, but a process of transitions affecting the entire family". Such stressful periods may cause a grieving family member to overlook certain vital matters, such as the remaking of one's CPF nomination.

During the series of law awareness talks on estate planning that I have conducted over the years in the community, I have held numerous polls to determine if residents are aware that marriage automatically revokes CPF nominations while divorce does not. What I learned was that majority of the participants actually knew that marriage automatically revokes CPF nominations. I believe the credit of such high awareness should go to the dedicated CPF team for diligently sending out written notifications to remind members to make fresh nominations upon their marriage. However, most of the residents were surprised to learn that divorce does not automatically revoke the nomination made previously upon their marriage.

I am assuming that the CPF Board's rationale could be that the nominations made during the marriage may have been meant to benefit the children from the marriage and thus, need not be automatically revoked.

But to avoid such unnecessary controversial family disputes from arising between the estate of the deceased with the nominated beneficiary, perhaps the Ministry can consider adopting the same approach by sending a notification to a member upon their divorce to remind them about a possible need to consider making a new nomination. In Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Many Singaporeans may not know that CPF nominations made before marriage will lapse immediately after marriage, but nominations made after marriage will not lapse after divorce.

In the event of a divorce or loss of family members, people often feel helpless and forget the need to amend their CPF nominations.

Therefore, I hope that the relevant authorities can consider giving a gentle reminder to CPF members upon knowing that their nominated beneficiaries are divorced or have passed away, to consider nullifying their previous nominations and make a new nomination.

(In English): In conclusion, Mr Deputy Speaker, notwithstanding my requests for clarification and suggestions, I stand in support of this amendment Bill.

6.28 pm

Mr Gan Thiam Poh (Ang Mo Kio): Mr Deputy Speaker, Sir, I support the amendments to the Retirement and Re-employment Act which will pave the way for our retirement and re-employment ages to reach 65 and 70, respectively, by 2030. This will offer more protection to older workers who are able to and want to continue working, whether it is for financial reasons or to remain meaningfully engaged in the economy and community.

However, some residents had shared their concerns with me about the potential impact on the CPF withdrawal age. I hope that the Ministry will continue to reassure CPF members through public education and outreach programmes that this amendment Bill will not change the CPF withdrawal age.

Most of us will experience some changes to our health and stamina as we age, and this will affect the intensity and type of work which we can take up for re-employment jobs. I would like to ask the Ministry to share an update, with data and information on the numbers, percentages and gender of seniors who have been re-employed. What sectors are they in? Are they working in large corporations or SMEs, local or foreign companies? What about the nature of their work? How many of these are flexible arrangements, part-time and full-time positions? Does the Ministry have a breakdown of the salaries across sectors, occupations and genders?

I appreciate the various incentive schemes to encourage companies to hire senior workers such as the Part-time Re-employment Grant and the Senior Worker Early Adopter Grant.

Would the Ministry share with the House how has the response been to these programmes so far? What are the take-up rates and how many senior workers have benefited from the scheme? What is the breakdown of the various sectors and type of companies which had applied for the grants?

Would the Ministry also share updates on the Senior Worker Support Package, which includes the Senior Employment Credit and CPF Transition Offset?

As our SMEs employ so many Singaporeans, will there be additional measures to incentivise and support them in our collective effort to keep our senior employees in the workforce?

Although we are improving in our drive to be more embracing of older workers, age discrimination continues to persist in some pockets of our economy. What more can be done to minimise this?

Finally, I would like to conclude with my support for the Central Provident Fund (Amendment) Bill as well.

Among the Tripartite Workgroup on Older Workers' recommendations is the raising of CPF contribution rates for senior workers aged above 55 to 70. This will certainly help with providing greater assurance of retirement adequacy, as will the changes to the CPF Act, which will make it easier for members to build up their CPF savings and receive retirement payouts. Deputy Speaker, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, the CPF must provide Singaporeans with a home, old age support, social safety net and protection. Under the home ownership policy, Singaporeans can purchase a HDB flat using their CPF. In addition to providing retirement payouts, CPF also allows residents to have a health insurance.

Singaporeans born after Independence would have a certain amount of CPF fund to help them live through their old age. It is only the older generation that needs the Government's and their families' support to thank them for their efforts in nation building.

What is worrying now is the new jobs and industries that have emerged in the new digital age. Workers in these industries may not have sufficient CPF protection and this will have a far-reaching impact on their retirement security in the future.

Here, I would like to ask the Minister the following questions.

First, how many workers in related industries are currently not covered by CPF?

Second, how many people have insufficient minimum retirement deposits in their CPF but have homes that can be monetised with the assistance of Lease Buyback Scheme or other schemes to provide old age security?

Third, how many people can continue to mortgage HDB flat or private properties to CPF to reach the minimum retirement sum?

Fourth, how many people would like to make more CPF deposit or contributions personally but had been rejected? Can the Government consider allowing them to increase their deposits?

Fifth, can the Government consider allowing and encouraging donations to third-party CPF accounts to promote a caring society?

Sixth, can the Government provide more incentives to mothers' CPF to encourage fertility?

Seventh, can the Government allow children to not ask their parents to refund payments made from their children's CPF when purchasing the HDB flat?

Eighth, can parents allow their children to return education fees paid from their CPF account without any deadline?

Mr Deputy Speaker: Mr Louis Ng.

6.34 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, CPF is an important institution to help Singaporeans prepare for their retirement. It affects Singaporeans in a direct and tangible way.

I support the Central Provident Fund (Amendment) Bill, which grants greater flexibility in CPF rules and simplifies various CPF processes. This will allow CPF to better support Singaporeans at various milestones in their lives.

That said, I have three points of clarification to make.

First, I seek clarification on what will be considered a "significant condition", particularly in relation to auto-immune diseases.

The new section 15AA allows withdrawals to be made by members who have not reached 55 years of age but are suffering from a significant condition. Additionally, the amended section 77 will provide that the Minister may make regulations, including to provide that a condition is a significant condition only if approved by the Minister and causes disability of a description or to an extent specified by the Minister.

Can the Minister confirm that this is not intended to limit all significant conditions to only conditions that cause disability and that the Minister retains broad discretion in determining what conditions are deemed significant conditions?

Can the Minister also clarify if serious auto-immune diseases, such as those included under the Chronic Diseases Management Programme (CDMP), will be considered and included as significant conditions?

Early withdrawals will ease the burdens on these patients by giving greater liquidity to manage their finances. The increased financial support and flexibility by allowing CPF withdrawals before reaching 55 years of age would be immensely helpful to patients of auto-immune diseases.

My second clarification relates to the reimbursement of funeral expenses on the death of a member with no CPF nomination. The new section 25A provides for the reimbursement of reasonable funeral expenses but only to a beneficiary, which would be persons entitled to the CPF monies under various rules.

In reality, funerals are often arranged expediently upon a person's death. Loved ones may not know how much CPF funds are available, how much they can use and, indeed, whether they are even beneficiaries at all. This may lead to confusion and stress over funeral arrangements.

I have three suggestions that would help.

One, can the Ministry publish guidelines or a framework to help beneficiaries understand how much funeral expenses will the CPF Public Trustee typically agree to defray?

Two, can the Ministry expedite the process of informing beneficiaries of their nomination and of the CPF funds available upon a member's death?

Three, can the Ministry allow the Public Trustee to reimburse reasonable funeral expenses to a wider class of beneficiaries who have incurred these expenses in good faith?

The death of a loved one is always painful. I am glad this Bill helps soften the blow and I hope the CPF Board will consider my suggestions to take further steps in that direction.

My third clarification relates to the option to apply for a refund of money transferred to top up Retirement Accounts before 1 November 2008.

Currently, I understand that Retirement Account top-ups before November 2008 are returned to the giver when the recipient passes away. The repeal of section 19A changes this and such top ups are no longer returned to the giver. What are the reasons for this change?

Members who made top ups before 1 November 2008 would have done so based on their understanding of the rules at that time. Certainty of the rules is important for members to have confidence in our CPF system. By changing the rules and allowing a period for refunds, could this lead to a risk of an exodus of funds from Retirement Accounts as members choose to exercise this option?

Will exceptions be made to allow for the prior rules to apply to members with valid reasons?

Next, the Retirement and Re-employment (Amendment) Bill proposes to give our older workers the option to work longer if they choose to do so. Our older workers are treasure troves of experience and our younger workforce has much to learn from them. I support this legislative move to allow them the flexibility to work longer should they wish to do so.

In line with this short Bill, I have three short points of clarification to make.

My first point is about the minimum retirement age. Section 4 of the Act is being amended to constrain the minimum retirement age the Minister can prescribe. Currently, the Minister can prescribe a minimum retirement age of anywhere between 62 and 67 years. With the new amendment, that range shrinks to between 62 and 65 years.

Can the Minister clarify why this range has been reduced? I understand the Government's current plans are only to raise the minimum retirement age to 65 by 2030. Is the amendment merely to align the new law with the Government's stated plans or is there some other reason for legislatively tying the Minister's hands on this matter?

My second point is about differentiated retirement and re-employment ages. The Bill appears to tweak the Minister's power to specify retirement and re-employment ages.

The Bill empowers the Minister to prescribe each age to "any class of employees". This is new language not present in the current Act. The term "class of employee" is not defined in the Act or in the Bill.

Can the Minister share whether this change is meant to give the Minister the power to apply a differentiated retirement age and re-employment age to different types of employee?

Can the Minister share if the Ministry has plans to apply differentiated retirement and re-employment ages to employees in different sectors?

My last point is close to my heart. Today's Bill is about senior workers but I would also like to emphasise the importance of senior volunteers, which I know is outside the scope of the Bill. Specifically, I would like to emphasise the importance of not discriminating against seniors who serve in volunteer roles.

We have made a strong stand on discrimination at workplaces based on age. We are now proposing to increase the retirement and re-employment ages to give people the opportunity to work longer.

Can we also ensure that there is no discrimination based on age when it comes to volunteerism? It seems contradictory to say that someone is not too old to work but is too old to volunteer.

Volunteers may start their community involvement only late in their lives. They should be given the opportunities to serve for an appropriate amount of time. I do agree in leadership renewal but restrictions on leadership tenure should be based on time served and not age.

It is clear that volunteers help to shape our society and country into a better place. They make time, despite their busy schedules and out of the goodness of their heart, to help others. If a senior volunteer's age does not hinder his or her performance in any way, there is no reason why they should be discouraged from continuing their good work.

We should be rewarding them instead for their kindness and desire to give back to our society. In the same spirit of this Bill, senior volunteers should not be discriminated against and we should similarly take a strong stand on this.

Notwithstanding these clarifications, Sir, I stand in support of both Bills.

Mr Deputy Speaker: Mr Yip Hon Weng.

6.41 pm

Mr Yip Hon Weng (Yio Chu Kang): Mr Deputy Speaker, Sir, our workforce is ageing rapidly. There is an urgency to review our retirement and re-employment, or R&R, framework to prolong our workforce's longevity. This is important to drive economic activity.

As our seniors live longer and healthier lives, their expectations for living standards will increase. Raising the R&R ages makes it possible for seniors to stay productive and enjoy greater financial independence.

However, it is not uncommon to hear stories of seniors facing difficulties seeking employment in their silver years. I have five issues to raise.

First, Mr Deputy Speaker, Sir, we must ensure that senior workers are employed in meaningful roles. These would be jobs that match their skill sets, experiences or interests.

It is heartening to note that the employment rate of those aged 65 and above has increased from 27.6% in 2019 to 28.5% in 2020 despite a pandemic-ravaged economy. However, we need to go beyond numbers to get more insights into the employment landscape for seniors.

Can the Minister share data on the types of professions and roles that seniors are employed in? How many were successfully re-employed in different sectors from their previous roles? How many were re-employed in the same sector but in different roles?

From my conversations on the ground, I understand that many employees who have reach the retirement age are actually not re-employed. Others were constructively dismissed by employers who deliberately reduce their working hours, responsibilities and consequently, their salary and benefits without prior consultation. This indirectly pressurised the senior to leave on his own accord.

One Yio Chu Kang resident who was in a managerial position shared that he was asked to relinquish his position so that the company could groom a younger employee to take over. He thought this was a fair intention but he expected to take on a mentorship role. Instead, they offered him an entry-level position that was completely unrelated to his previous job scope, skill set and interest. Feeling insulted, he decided to resign and accept the Employment Assistance Payment (EAP). It was worth noting that his HR manager did not even ask why he rejected the re-employment offer.

When re-employment does not work out, getting a new job after 62 can be a tall order due to the misconceived notion that older employees are less productive, amongst other things.

In a February 2020 survey on ageism in the workplace, older workers were stereotypically ranked lower in alertness, ambition, productivity and so on. They were ranked higher in susceptibility to accidents and resistance to innovation and change.

These findings are not true across the board. They can severely dampen seniors' employability. Such beliefs may likewise ingrain ageism. They may lead seniors to sense that age, by default, limits opportunities. This stiffens their morale and desire to retrain or upskill for career advancement.

It is interesting to note that a highlight of the MOM Labour Force Report 2020 was the increased number of discouraged workers concentrated in older residents. If employers do not change their mindsets, we will lose precious human capital.

Second, Mr Deputy Speaker, Sir, both employers and employees need to adjust their mindsets and expectations about re-employment. Many companies still use a seniority-based wage system, translating to the belief that wages should rise annually. Correspondingly, older employees are perceived by employers to be more expensive. Last year, middle-aged and senior residents who have lost their jobs would tell me that they were more than willing to accept a pay cut for their new job. However, prospective employers have assumed otherwise, simply because of their age.

The mindset that a wage system is necessarily based on age needs to be phased out. This is especially so in this era, where we expect to change careers multiple times in a lifetime. When we start a new job in a different industry with fewer responsibilities and relevant skills, we, generally, do not expect to command a similar salary to our previous job. Likewise, if a re-employment contract stipulates fewer job responsibilities, it is fair for the salary and benefits to be reduced correspondingly. Basically, we should pay an employee based on his worth.

On the other hand, changing someone’s responsibilities without consulting them in advance may result in unnecessary misunderstandings and misconceptions. Companies should be upfront and discuss such issues with employees who are due for re-employment and ask about their plans and aspirations moving forward. The employee should also be consulted on his or her ability to cope with the demands of the position. If the company would like to offer the employee a different role, clarifying their intentions would go a long way to reduce misgivings and increase retention rates. There must be a way to implement and promote these conversations for all our employers.

Mr Deputy Speaker, Sir, my third point pertains to the timeline for raising the retirement age. The timeline from now until 2030 appears to be unnecessarily prolonged. Many things can happen in 10 years. The decision to raise the retirement age to 63 was deferred once because of COVID-19. How can we ensure that the plans to raise the R&R ages will not be affected yet again? As many companies will look to the Government to take reference, what is the timeline for the Civil Service to implement the raise?

Furthermore, what is next beyond 70 years old? Will we raise the ages again? Or will we abolish the retirement age altogether? A number of countries, including Australia, Canada, the UK and the US, have no mandatory retirement age, with exceptions made for certain professions.

Mr Deputy Speaker, Sir, my next point is on the impact of COVID-19 on workforce transformation. This has an impact on the R&R framework. One such change is the acceptance of flexible working hours and arrangements. Some seniors may choose to work less or work from home more, because they want to spend their retirement years with their family or to pursue their own interests. Others may no longer be fit to work long hours at a stretch, but are still willing to contribute. We should capitalise on workforce transformation to encourage and support employees who have job-sharing and flexible working hours as part of their re-employment options. Have such workforce changes been taken into account for the R&R framework revision?

The pandemic has posed a threat to senior workers in some ways. Some elderly frontline workers have resigned from their jobs as they were afraid to contract COVID-19. We have to press on to leverage more on technology to redesign jobs, so that they are less labour-intensive and can be done remotely. This will increase job inclusiveness, so they can be done with reduced risks and lower demands physically or mentally. I am pleased to note that redesigning jobs at the workplace is among the Tripartite Workgroup on Older Workers recommendations. Can the Minister share more details about this? Specifically, whether there is a specific timeline for the expected progress and what can employees expect from the redesigned jobs?

Mr Deputy Speaker, Sir, my last point is on CPF payouts and contributions. Many of my senior residents are concerned about the impact of raising the retirement age on CPF payouts and Silver Support. They worry that if the retirement age was to go up further, so, too, will the CPF withdrawal age and Silver Support Scheme eligibility age. This worries the lower-income residents, who have less confidence in achieving the Basic Retirement Sum (BRS) by 65. Will the Government increase the BRS? The current recommendations only mentioned the BRS until 2022. What will it be in 2023 and beyond? Furthermore, what are the Government’s plans to assist lower-income Singaporeans to achieve the BRS?

In conclusion, Mr Deputy Speaker, Sir, raising the R&R ages must be accompanied by policies and mindset changes. This is to support Singaporeans to stay in the workforce for as long as they desire. In Yio Chu Kang, I spoke to two residents, both 62 years old and currently employed. Mdm A would consider putting off retirement plans, if her working hours can be reduced. She wants to spend more time with her family and her grandchildren and pursue her interest in calligraphy. The additional income from her part-time work would supplement her retirement savings. On the other hand, another resident, Mr B, wants to continue working full-time to accumulate more retirement funds. He is concerned that his employer would not re-employ him on the same terms as before. He works in an office and does not believe his workload should be reduced or changed because of his age.

The difference in attitudes between both seniors is a reminder that there is no one-size-fits-all policy. As a progressive society that strives for a senior-friendly workforce, we must avail more employment options so that seniors like Mdm A would not have to choose between working full-time and leaving the workforce completely. Meanwhile, seniors like Mr B, should be able to contribute their fullest potential to the workforce for as long as they wish. This would be facilitated by raising the R&R ages. Their fears and anxieties about age discrimination are valid. We must continue to engage employers, with the goal of eradicating ageism. Employers, too, must communicate with their employees to understand their wishes and to bring out the best in their senior workers.

Finally, as our workforce becomes older and more age-diverse, we need to encourage Singaporeans to continue working and to contribute meaningfully to society for as long as possible. We need to keep the support structures and the assurance that they will receive their CPF payouts. Retirement should not become a problem but, rather, a milestone to look forward to. I support the Bills.

Debate resumed.

6.51 pm

Ms Ng Ling Ling (Ang Mo Kio): Mr Deputy Speaker, Sir, I rise in support of both amendment Bills.

I would first like to start by affirming the efforts of MOM in introducing the Retirement and Re-employment (Amendment) Bill to prohibit dismissal of employees on the grounds of age by legislating the minimum retirement age at 65 and increasing the statutory limits for re-employment age from 67 to 70 years old.

Given Singapore’s demographic shifts towards an ageing population and the longer life expectancy of Singaporeans, it is inevitable that many of us will have to continue working for a longer period. According to MOM’s Comprehensive Labour Force Survey, as of 2020, 25.7% of our labour force is 55 and older. This is a 9.2% increase from a decade ago. As Singapore moves towards a more inclusive workforce that recognises the increased contributions of our older workers, I would like to make three clarifications to ensure that our older employees are safeguarded from unfair employment practices when offered re-employment.

Firstly, MOM released the Tripartite Guidelines on the Re-Employment of Older Employees, which took effect on 12 October 2020. On wage adjustment, the tripartite guidelines stated that "Upon re-employment, any wage adjustment should be based on reasonable factors, such as productivity, duties, responsibilities and wage system”. Although the tripartite guidelines allow for “the wages to be adjusted down to the level of a younger employee with the requisite experience and competency for the same job", I would like to clarify what are the safeguards in place to prevent employers from disincentivising older employees by overtly reducing their salary, knowing that they need to be re-employed. Continued employment may remain an important channel for older workers to meet their expenditure needs, especially the lower-income earners. Having contributed their years before retirement in an organisation and hoping to be valued for their contributions, older workers should not be expected to be short-changed in re-employment terms and benefits to continue their service with the employer.

Secondly, I understand the Bill has set forth in section 8A a conciliation process for employers who have re-employment disputes. I would like to clarify, to date, how many employees with re-employment disputes have been directed to an approved mediator for conciliation and how many of these conciliations are successful. I would also like to clarify what is the average timeline expected for such conciliation between employers and employees. It is important that the timeline for these conciliations be short, with amicable solutions reached by both parties, so as not to overtly bring hardship to employees seeking re-employment, especially those who require the job for their livelihood.

Third, one of the main eligibility criteria for re-employment set out in section 7, subsection(1)(b)(ii) of the Bill is that the employer will assess the employee as "being medically fit to continue working". With increased retirement age, there would be a proportional increase of those with multiple chronic diseases. The "Transitions in Health, Employment, Social Engagement and Intergenerational Transfers in Singapore" study showed that, in 2017, around 37% of respondents reported three or more chronic health conditions, up from 19.8% in a 2009 study.

Given the higher prevalence of chronic illnesses in an older workforce, I am concerned that irresponsible employers can use it to disadvantage older workers and justify not to offer re-employment on the grounds of medical fitness when they are having common chronic illnesses. Although subsection (2) of the Bill states that the employers have to prove on a balance of probabilities that the employee is not medically fit, I would like to clarify what are the safeguards to assure that chronic illnesses would not be used to unfairly disadvantage older workers from being regarded as medically fit.

Mr Deputy Speaker, I strongly believe the importance for our seniors to age gracefully and with dignity. Our seniors remain important contributors of our economy and society, sharing their wealth of experiences and valuable skillsets while mentoring younger employees. Thus, legislation is critical to prohibit dismissal on grounds of age and safeguarding their re-employment rights if they wish to continue with their employment. This amendment is an important step in sending out the right signals to the employers that diversity of age at work remains an important driver to increase productivity and allow their business to grow, especially when older employees possess subject-matter expertise and are observed to have lower turnover rates.

Now, on the Central Provident Fund (Amendment) Bill, since its inception in 1955 as a compulsory retirement savings programme, our CPF system has been the bedrock of our social security system, which ensures that the seniors can retire comfortably and be financially independent during their golden years.

I would like to raise three clarifications about the Bill relating to the disbursement of CPF monies, voluntary contributions to the MediSave account, and payment by the Public Trustee to beneficiary representatives.

Firstly, I understand that the amendment Bill will allow CPF Board to make automatic disbursements to members after being satisfied that the member is suffering from a "specified significant condition" by regulations made under the new section 77(1) of the amendment Bill. Currently, CPF Board already allows members to apply for withdrawals if they are certified to have a reduced life expectancy or severe medical conditions that cause members to be permanently unfit for work or lack mental capacity. I would like to clarify if there can be more specificity on how the "significant conditions" will be decided in the proposed amendment Bill to be adopted.

I have an encounter with one of my residents, Mdm A, who suffers from a rare and incurable disease characterised by progressive problems with movements and may shorten life expectancy. Mdm A approached me for assistance because she has been using her CPF monies to support her only son's studies, and as she is suffering from this medical condition, she hopes to appeal for the waiver of her son’s repayment. As a mother myself, I can fully understand the intention of Mdm A to support her son through his studies while she is able to, without expectation of repayment.

I would like to know whether the examples like the encounter I have mentioned will constitute as a "specified significant condition" and whether flexibility can be given to waiver of repayments under some of the CPF schemes, such as the CPF Education Loan Scheme, if the CPF member suffers from such "significant condition". In addition, can the Ministry also clarify if CPF Board will be conducting periodic reviews of the type of specified significant conditions, in order to keep up with newer medical conditions that would be eligible for such withdrawals?

Secondly, the amendment Bill proposed the removal of CPF annual limit for certain types of voluntary contributions to the MediSave account. This means that CPF members can make greater voluntary contributions to their MediSave account to prepare them for the "rainy days", where they may face the possibilities of medical emergencies and can use their MediSave to cover a significant portion of medical costs and hospitalisation bills.

However, I have also come across elderly residents in my constituency who are healthy and raised concerns over the underutilisation of their MediSave balance, requesting if their MediSave funds can be reallocated into their Retirement Account. It is understandable that individuals who have made excess voluntary contributions to their MediSave account during their productive work life, but do not have much health issues or incur much medical costs, would want to use that money for their retirement living expenses instead. Thus, I would like to clarify if after lifting the CPF annual limits for voluntary contributions made to the MediSave account, will CPF Board also allow CPF members to reallocate their additional voluntary contributions into other accounts, such as their Retirement Account (RA), if they so choose to in the future?

Lastly, the amendment Bill also provides for a new and simplified process for the distribution of un-nominated CPF monies by the Public Trustee on a member's death to a "beneficiary representative" for distribution to the beneficiaries, in accordance with the Intestate Succession Act or section 112 of the Administration of Muslim Law Act. It allows a beneficiary of the deceased member to apply to the Public Trustee to become a beneficiary representative.

Although the application will be subject to the approval of the Public Trustee, I am concerned that there is a lack of recourse if the beneficiary representative fails to exercise fairness in distribution of the CPF monies according to the Acts. I am also concerned that the beneficiary representative may unreasonably withhold the monies from some beneficiaries. Thus, I would like to seek clarification on: one, how the application process will be done to identify the beneficiary representative and two, how the Public Trustee intends to ensure that the welfare of the remaining beneficiaries will be taken care of.

Mr Speaker, with the expected increase in retirement age to 65 and re-employment age to 70 by the end of the decade, periodic review of the CPF system is crucial to ensure that the key pillar of our social security system is kept up-to-date. Notwithstanding my clarifications, I support the amendment Bills.

Mr Deputy Speaker: Ms Nadia Samdin.

7.02 pm

Ms Nadia Ahmad Samdin (Ang Mo Kio): Mr Deputy Speaker, Sir, the life expectancy of Singaporeans has increased to almost 85 years, compared to 76 years back in 1990. According to MOH's action plan for successful ageing, about 25% of our population will be over 65 by 2030 and the United Nations projects this percentage to be almost one in two by 2050. The ageing population narrative is not an unfamiliar one.

Our leaders saw it as an eventuality that happens to most developed countries. Due to a multitude of factors, people are living longer and having fewer children. One of the differences between Singapore and the rest of the developed world is the speed at which it has happened, along with the other limitations we have, such as, our reliance on our people as a main resource. The challenges of an ageing population are multi-faceted, spanning from retirement adequacy, healthcare readiness and, with relevance to this Bill, their place in the workforce.

Mr Deputy Speaker, Sir, while I stand in support of this Bill, I would like to also make the point that seniors work for a variety of reasons, some to keep active and meaningfully occupied, but not every senior who works wants to work. Some do it out of necessity due to financial, familial and a variety of other circumstances too numerous and too personalised for us to paint broad strokes over.

Having said that, I lend my support to this Bill in the spirit of protecting the seniors who make up an important part of our workforce and who want to continue to work. In cultures like Japan, seniority is looked upon with a reverence both in and out of the workplace. Honorifics are given to the elderly as recognition of the experience that time has given them. While it may not be practical to fully adopt the same cultural dynamics, we would do well to remember that both in and out of the workplace, our seniors bring much value, mentorship and expertise.

This Bill keeps our seniors' options open if they want to work and protects against wrongful dismissal, giving our older workers some security and clarity. There is no magic switch which flicks when you turn 63 or 65. Your experience continues to be valuable and the skills accumulated over the years remain yours. I have three broad points of clarification.

My first point is on ensuring that seniors not just have employment, but gainful employment, which is appropriate for them with commensurate salary. We know that some seniors may choose to work to keep busy, but there are also seniors who need to continue working due to economic needs. The outcome of this shift has to be meaningfully accompanied by job redesign and early career structuring. For example, a mature PMET should find opportunities in the same or related roles or roles they are keen on exploring and can be trained for, rather than be shifted to menial or labour-intensive roles, which may be counter-intuitive as he or she hits retirement age.

As we continue to raise this age to 65 by 2030, we also need to ensure that our employers actively re-scope job roles and backend processes to unlock the true value of our seniors. Sometimes, this could mean scoping down roles with appropriate salaries, if older workers do not wish or are unable to continue with the same job at the same pace.

Other than the efforts by the union, which I recognise and applaud, does the Government have any further plans to assist employers and employees on reaching an agreement for fair terms should their role be scoped down? Would the Government consider providing incentives for companies that actively re-scope roles for seniors and have age-friendly workspaces? How else can the public sector take the lead in embracing an age-diverse workforce and enhance the culture of workplaces? Can opportunities for older workers be better consolidated and made accessible for this demographic, together with more tailored support, for them to move on into new roles?

Companies that are unable to retain their senior employees or find alternatives, may offer a one-off employment assistance payment, with the recommended sum being 3.5 months worth of salary. While useful for our seniors, I would like to ask if there are any plans for the Government to increase this level of support who do not get re-employed. It is already difficult for anyone to look for a new job in this climate, let alone for older workers.

While our overall re-employment statistics are improving, the rate for our seniors do not seem to be as buoyant. The proportion of retrenched residents aged 60 and above who re-entered re-employment six months post-retrenchment, is 43.8% for the second quarter of 2021. This is lower than the fourth quarter of 2020's 46.7% and the first quarter of 2021's 55.7%.

On an annual basis, the statistics in our second quarter is also lower than nine out of 10 of the previous second quarters. What are the implications of this trend? And considering that the recommended EAP is only for 3.5 months of salary, are there plans for additional support to improve this figure as we navigate our way out of the pandemic?

My second point, the main dispute resolution platform to resolve workplace-related disputes is the Tripartite Alliance for Dispute Management, or TADM. TAFEP's annual report for the annual year 2020 to 2021, showed that the proportion of complaints related to ageism rose to about 12.5% higher than the 10% reported in the year before. TAFEP and TADM have been very valuable at resolving some of the complaints employees have. The announcement of future anti-discrimination legislation as well is encouraging. However, while employers cannot forcibly retire elderly workers based on age, it remains that unfair dismissals may happen under the guise of other benchmarks.

Is the Government considering additional measures to improve the implementation of this policy and how successful has TAFEP been in working with firms to ensure that they no longer practise such ageist company policies?

The final point I wish to make is that, while we all have a role as employees in a society in embracing this shift, the majority of the efforts and costs to ensure all seniors continue to have an important role in the workplace will fall on our employers. They are the ones who face not just the monetary responsibility of wages and CPF, but also the responsibility of creating an inclusive workplace designed for our seniors. The CPF Transition Offset, Senior Employment Credit scheme, as well as the Senior Worker Early Adoption Grant have all been helpful in supporting progressive employers in maintaining older workers.

However, during this transition period, employers may still find difficulties sustaining long-term employment for seniors. The Senior Employment Credit scheme is also set to expire at the end of next year. Would the Government consider extending some form of wage offset scheme to support firms to increase their re-employment age policies along with the increase in the statutory cap?

Furthermore, there are also members of our Pioneer Generation who still face further difficulties in saving for their retirement, even beyond 70. Will the Government consider extending further assistance to employers who are specifically supporting workers over 70 who choose to work, instead of only supporting based on internal retirement and re-employment ages?

Mr Deputy Speaker, Sir, the demographic shift we are facing is one that is significant. The unique socio-cultural context of Singapore makes the task of ensuring our workforce is ready for this move is a difficult one. I am heartened by the Government's move to support the seniors who make up an important part of our workforce and I do have residents to tell me they still feel young at heart and want to continue working. I am glad we are looking to support those who make this choice. I also hope that our employers, employees and workspaces are also ready to be open to transform in tandem with our policies and appreciate the value of an inclusive and age-diverse workplace.

Mr Deputy Speaker, Sir, I support this Bill.

Mr Deputy Speaker: Deputy Leader, would you like to move that the debate be now adjourned?

Resumption of Debate on Question [1 November 2021], "That the Bill be now read a Second time." – [Minister for Manpower].

Question again proposed.

Mr Speaker: Mr Edward Chia.

12.30 pm

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Speaker, Sir, I support both Bills. Raising the retirement age is essential for Singapore because it benefits our workers for this new economy. Singaporeans can retire when they so choose but raising the retirement age will provide a vast majority of our workforce with a longer runway to contribute to the economy, learn new skills to stay engaged and be able to continue to earn a fair and decent wage to sustain their lives and further build their savings for retirement eventually.

During one of my community engagements with residents, I came across Mr Tony Ho, aged 74, who continues to work as he is willing to put his acquired skills and experience to help companies create value to our economy. Most recently, he helped to design and execute a new production facility in Tuas for a trading company which wanted to do its own manufacturing. He further guided them on how to manufacture these products to be of high quality so as to achieve local market sales. Mr Tony Ho is a positive example of how our seniors can remain employable, leveraging on their experience and continue to contribute to the larger economy.

Raising the retirement age will allow our current workforce who are in their early 60s and have optimal capacity and positive attitude, to continue to be a core contributing force for our economy. They are a part of the experienced workforce we have in the economy, that is, those with more than 15 years of working experience, that forms the core of any company’s competitive talent base – from senior management to professional functions and operations.

This is an essential reframing of how we need to look at the future workforce composition within a company and across all industries. This is an essential reframing. Those in their 40s up to the age of perhaps 65, should be the new bedrock of our competitive economy as we compete higher up the value chain where experience and know-how will be the new value proposition.

Raising the retirement age progressively would allow Singaporeans to work for a longer period instead of being forced to retire due to a perception of what is considered old age. As we proceed to make this happen, there is also a need to ensure that our current social systems and training models support this extension. I propose two suggestions to allow the benefits of raising the retirement age to be distributed more equitably.

First, is to accelerate the changes of the age from which the step-down model of CPF contribution rates takes place from 55 to 60; second, is to accelerate the development of vocational transformation maps along with Industry Transformation Maps (ITMs).

As we raise the retirement age progressively, I believe we need to make an adjustment to the age from which CPF contribution rates change. The core principle of the CPF contribution rate remains sound and that lowering it at a specific age encourages our employers to continue finding hiring older workers attractive.

I am heartened that the Government had accepted the recommendation by the Tripartite Workgroup on Older Workers to start the CPF step-down rate at age 60. I would like to propose an acceleration of the implementation of these increases in CPF contribution rates in tandem with the changes in statutory retirement age.

The continuation of an employee's CPF contribution at the same rate, both from employers and themselves, even after 55 years, sends a clear signal that work should be recognised and valued for its intrinsic worth during the most productive periods of an employee. Such a shift in mindset throughout the workforce will also prove helpful as we commit to include more middle-aged workers into the bedrock of our workforce.

Cost will always be a concern for employers but the reality today with our demographics is that real value is also being created by those above 55 inside many companies. Studies have shown that what matters more in a modern economy is the productivity of teams of workers, rather than individual workers. Hence, the solution might be to employ a mixture of vigorous young workers and more experienced older workers. We need to take careful steps to bring our society in tandem with our economy and, in doing so, allow employers to reap the benefits of such investments in human capital and employees to feel valued enough to continue innovating and increasing their productivity.

For Singapore’s human capital advantage to be sustained, we need to enable our workers to always remain relevant in this fast-changing economy. For our older workers, we need to help them translate their experiences into updated contributions to their job functions and the overall economy. As ITMs are scoped based on sectors/verticals, we need to introduce more horizontals in the form of vocational transformation maps.

Taking a look at ASEAN’s built environment industry, human capacity with the skills and experience remains vital to optimise the integration of advanced digital technologies, such as the Internet of Things (IoT), AI, robotics and cloud computing. For example, energy specialists go through upskilling courses before they could advise MNCs that are aiming for net zero emissions, or factories looking to measure their Environmental Health and Safety (EHS) leading indicators. Digital tools should not be seen as the new takeover in making our economy an efficient one, but these tools are to assist our workers who are equipped with upgraded skills to effectively harness these tools. In this way, we can empower as many senior workers as possible who have credible experience in a vocation to translate their skills and experience to new areas of applications in the digital and green economy.

Mr Speaker, Sir, in conclusion, I support raising the retirement age to give our senior workers the option of continuing to work and contribute to our ever-growing economy, given their vast and valuable experience. I hope that the Government will also consider my two suggestions: (a) to accelerate the changes of the age from which CPF contribution rates step down from 55 to 60; and (b) to accelerate the development of vocational transformation maps along with ITMs.

We have the opportunity now to reframe our workforce composition for the future and move Singapore into being a competitive and inclusive talent capital.

Mr Speaker: Mr Sharael Taha.

12.39 pm

Mr Sharael Taha (Pasir Ris-Punggol): Thank you, Mr Speaker, Sir. Today, Singapore is ranked as one of the countries with the highest life expectancy and we stay healthier for longer even as we grow older. However, like many other developed countries, our population and workforce are ageing rapidly. The Retirement and Re-employment Bill enables seniors who wish to continue working to do so, allowing them to stay active and contribute to our economy. The Bill will also enable businesses to tap on this experienced pool of workers.

I am in support of this Bill. However, to meet the intent of the Bill, raising the retirement and the re-employment age must be accompanied by efforts to reduce, and eventually eliminate, the barriers to a truly age-friendly labour market.

I would like to propose three key areas for improvement. Firstly, expediting the legislation of Fair Employment Practices; secondly, promoting a fundamental shift in our HR policies; and, thirdly, the community effort to redesign jobs that leverage on the strengths of our seniors. Let me touch on each of these key areas.

Firstly, we have to expedite legislating the TAFEP guidelines on Fair Treatment at the Workplace to protect and provide opportunities to our senior workers.

In the Tripartite Guidelines on Fair Employment Practices, it states, and I quote, “Employers should not stipulate age as a requirement for employment unless there are legal or regulatory requirements which must be stated clearly. Words or phrases that suggest preference for job candidates of a particular age group should also not be used in job advertisements. Examples include “young” or “youthful work environment".

However, a cursory check on recruitment websites shows a clear age-bias. On Jobstreet, a job posting for a Quantity Surveyor describes the job highlights as “good career advancement, young and positive work environment.” Just last week, posted on 25 October, a recruitment ad for a part-time horticulturalist states “Looking for part-timers to work in a young and fun environment”.

These are just two of many examples that can be found.

Beyond recruitment ads, we would have heard anecdotal stories of how seniors were asked pointed questions about their age at job interviews, leading to the common perception that their age hindered them from proceeding further and securing the job.

During our Meet-the-People Sessions (MPS), we would have come across older workers who felt that they were forced to retire as they felt their employers assessed their suitability for the job was based solely on age rather than the objective assessment of their job performances or relevant health conditions. Some also highlight that they were subjected, or they felt that they had unfair re-employment contracts as they were offered re-employment with the same job scope while receiving a lower remuneration or benefits package.

Hence, to meet the intent of the extension of the re-employment and retirement age, this amendment must be accompanied by legislation to ensure fair treatment for our senior workers.

In a recent discussion about retirement and re-employment with the residents in Pasir Ris, Ms Judith highlighted the common question of whether it was a case of “have to work” or “want to work” for our seniors.

Residents Raymond Puah and Charlie Cheong shared that, in addition to protecting and providing opportunities for our senior workers through legislation, the best way to secure re-employment is to upskill and remain relevant in this job market. Mr Raymond Puah even shared that he took the opportunity cost of forgoing overtime pay to upskill and better prepare himself for retirement.

Educating employers and legislating Fair Employment Practices will provide opportunities for our seniors who have to work. However, to create a suitable environment for seniors who want to work, we must drive fundamental changes in our HR policies.

To better prepare our senior workers, employers must deliberately engage them in a structured career planning conversation well before retirement age. Job requirements must be clearly defined, along with the relevant skills required such that workers are aware of the prerequisites for future re-employment. This would allow workers to add value to the organisation even as they mature. There should not be a case where age is used to assess the workers’ suitability for any job.

Hence, it is crucial that the extension of re-employment and retirement age must be accompanied by employers spending time developing a retirement and training plan for our maturing workers. For example, given that digital competencies are enablers for re-employment, can the Ministry consider basic digital skills training as a prerequisite for our senior workers in preparation for retirement?

Another area to look into is the feasibility and adoption of flexible work arrangements that are already commonly practised around the world. Most of us start work in our 20s and, as we reach retirement age, we would have spent 40 years or more working. By then, there would be less financial pressure as our children would be independent and would likely want to spend more time outside of the work environment and enjoy a better quality of life as we head towards full retirement. Hence, it is understandable that our senior workers want to continue working but with a more flexible work arrangement more suited for their life stage. How do we encourage companies to consider flexible work arrangements, such as shorter work weeks, part-time employment or even job sharing between two or more persons?

That brings me to my third point on redesigning jobs to leverage on the strengths of our seniors instead of their weaknesses.

I am sure many of us have heard our seniors share their struggles to find employment opportunities outside of roles, such as cleaners, security guards and other labour-intensive roles requiring long work hours.

Let me clarify that there is nothing wrong with these jobs per se. However, they can be physically demanding and require long work hours which do not play to the strengths of our senior workers. How can we come together as a community and provide jobs that leverage on the strengths of our senior workers’ knowledge, experience and wisdom instead? What have we learnt from the past 20 months where many of us have been able to work productively from anywhere and at any time? Can we look into these remote and flexible work arrangements to ensure that our senior workers have more re-employment options?

Can we employ our senior workers to conduct virtual training classes to share their intrinsic industry knowledge, or provide virtual customer service assistance, virtual consultation or even virtual career coaching?

We can even harness technology to redesign jobs for non-PME roles as well, such as helpline operators for carpark gantries, or monitoring lift performance and dispatching teams for lift maintenance, which they can easily do from the comfort and safety of their own homes.

We must redesign jobs to leverage on the strengths of our seniors. This will provide better opportunities for re-employment and, at the same time, unlock this potential human capital to support our workforce. Failure to do so would mean that a significant portion, a third of our workforce, not being properly and purposefully allocated to add value to our economy.

For this to be successful, we must work together. Employers must be willing to spend time to restructure jobs. Mature workers must be willing to train while our unions continue to encourage and assist, and Government agencies must provide structural support for this transformation. Though there are many job redesign initiatives in various industries, such as in cleaning and retail, how do we get more companies on board? Of the half million business entities in Singapore, how many are actively looking at job redesign to hire more workers? Given that job redesign takes a lot of effort and guidance, does the Ministry have sufficient resources devoted to this end? As a community, how do we encourage and adopt the right mindset to feel responsible in creating these employment opportunities for our senior workers?

I would also like to highlight that although there are many support schemes available, it is difficult to make sense of all the information available on the MOM website. Can the Ministry consider making it more user-friendly by streamlining the available information to assist the companies?

I have spelt out ways to create an age-friendly labour market. Arguably, this takes considerable commitment of time and resources which many of our SMEs can ill afford. This means that SMEs may simply not have sufficient bandwidth to understand the full range of fair employment practices, nor the time and experience to implement career planning and redesign programmes. Given that SMEs account for an estimated two-thirds of all employment, we need to make the education process easier for our SMEs.

Can the Ministry consider requiring all HR practitioners of organisations having more than one employee to attend a course on understanding fair employment practices before they are allowed to recruit employees and designate at least one employee of the organisation as a fair employment practices champion, similar to what we have for safety at the workplace? Mr Speaker, in Malay, please.

(In Malay): [Please refer to Vernacular Speech.] This amendment Bill will enable senior citizens who wish to continue working to do so. In view of Singapore's ageing population, the amendments will also enable businesses to benefit from such highly-experienced workers.

However, in order to achieve the Bill's objectives, the raising of the retirement and re-employment age must be complemented with anti-age discrimination laws, such as those provided by the TAFEP Guidelines, so that we can protect our senior workers.

We should also change mindset and HR policies, such as having in place flexible work arrangements or career planning, for re-employment.

We should also strive to redesign jobs that can harness the strengths of our seniors so that we can provide more opportunities for senior workers.

(In English): In conclusion, Mr Speaker, Sir, the proposed amendments enable seniors who wish to continue working to do so. Given our ageing population, it also enables businesses to tap on this experienced pool of workers. However, to meet the intent of the Bill, raising the retirement and re-employment age must be accompanied by efforts to reduce and, eventually, eliminate the barriers to a truly age-friendly labour market. We must expedite the necessary legislation to protect our senior workers and implement fundamental changes in our HR policies. We have to look into redesigning jobs to leverage on the strengths of our seniors. Together, we must look at this challenge holistically and realise that we all have a part to play in this solution. With that, Mr Speaker, Sir, I support the amendments in the Bill.

12.51 pm

Ms Joan Pereira (Tanjong Pagar): Mr Speaker, Sir, with longer lifespans, our employment model has to change to enable our seniors to continue working if they wish to do so. Older workers have a wealth of experience which they can tap upon to continue contributing to our economy, as well as wisdom and insight, to share with younger cohorts in the workforce.

Therefore, I support the proposal to increase the retirement age and re-employment age gradually, from 62 to 63 years and from 67 to 68 years respectively from next July, to eventually reach 65 and 70 years by 2030. This will give employers time to make the necessary adjustments and preparations.

At this stage in our seniors' lives, depending on individual health conditions and personal preferences, it is very likely that most will have some changes to the scope of their work. Re-employment negotiations provide the opportunity for employers and employees to work out new arrangements, including options, such as flexible and part-time work.

However, for some senior workers who need the incomes, they may not have much room in re-employment negotiations. Older workers with lower education levels are particularly vulnerable to poorer workplace treatment. The fear of losing jobs keep some in unfair arrangements or toxic work environments. Some of these problems may be localised within departments; other issues may be prevalent or systemic within an organisation or a sector. On the other hand, due to such difficult conditions, there are workers who resign before reaching their retirement age or forgoing re-employment offers. We need to find ways to protect and help them.

Some examples of problematic work conditions include additional duties not within job scopes, volume of work which is difficult to complete during work hours, not providing appropriate or functioning equipment, and refusal to compensate for additional time and expenses incurred in the course of work. Workers may hesitate to seek help from the human resource department or MOM for fear of losing their jobs.

I think it is very important for senior workers, especially those who are in lower-paying jobs, to be informed of their rights and to be educated on how to assert their right to fair treatment at work. Even more importantly, they need to be assured of support from the Ministry and have confidence in the enforcement of workplace protection legislation.

By right, the individual HR departments should handle complaints and feedback, but they may be perceived to be pro-management.

I would thus like to suggest that the Ministry consider making it mandatory for companies to hold regular town hall meetings with employees to share feedback and report on follow-up measures. They must have clear protocols in place to allow whistle-blowers to complain safely and provide multiple avenues for feedback.

Next, I would like to comment on an amendment in the CPF (Amendment) Bill to simplify the process of distributing unnominated monies. I welcome more expedient payouts from the Public Trustee to a beneficiary representative. It may go some way to help dispel a persistent myth that unnominated monies are taken by the Government. This issue had been addressed more than once in this House and it was made clear repeatedly that CPF Board and the Public Trustee's Office (PTO) will attempt to locate and contact the next-of-kin so that they can claim the monies. Furthermore, there is no deadline for them to lay their claims. CPF should review its strategy to reach out to the public to address this misunderstanding.

Last, I have a concern regarding the amendment to treat top-ups to members' Retirement Accounts or Special Accounts as non-refundable gifts. Presently, the monies will be returned to the givers when the recipients die and, in certain circumstances, refunds to the givers are allowed. There are some merits to the current arrangement. For example, top-ups to parents' accounts from children may not be equal and the children who contribute may have some assurance that, in the event of their parents' death, their unused top-ups would be returned to them.

This will change with the amendment. Not all children are keen to have their top-ups shared among the beneficiaries of their parents' estate. Some children may be deterred from topping up their parents' accounts and the impact may be felt more among elderly women who have less CPF savings in the first place and tend to outlive their husbands. Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Senior workers who need the incomes do not have much leverage during re-employment negotiations. Older workers with lower-education levels may be more likely to encounter poorer workplace treatment. As they are afraid of losing their jobs, some employees endure unfair arrangements or poor working conditions. On the other hand, some senior workers are unwilling to continue accepting such difficult conditions and choose to resign before reaching the retirement age or forgo re-employment opportunities. We need to find ways to protect and assist them.

Presently, CPF top-ups, upon the death of the recipients or, in certain circumstances, can be returned to the givers. The arrangement has its merits. For example, top-ups to parents’ accounts from children may not be equal. With the amendment, future top-ups will not be refundable. Not all people are willing to let their top-ups become part of their parents' estate to be shared among all beneficiaries. I worry that with this amendment, there will be fewer people who are willing to top up their parents' CPF accounts, and elderly women will be more affected. Most of them have less savings and longer lifespans.

(In English): With this, I support both Bills.

12.59 pm

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Speaker, Sir, I rise to speak on the CPF (Amendment) Bill.

Projected inflation in a post-COVID-19 world has caused much anxiety. Many people are getting increasingly worried that they will not have enough savings to support retirement.

We can take heart that our CPF is an acclaimed retirement income system that is a constant work-in-progress. The Government is always reviewing and refining it to ensure it stays relevant with the times. The latest Mercer CFA Institute Global Pension Index report graded our CPF system as being on par with countries like Finland, Sweden and Switzerland. The grading meant that it has a sound structure with many good features but some areas for improvement. I believe our Government is always working towards closing the gaps.

I would like to seek some clarifications, Mr Speaker.

First, I note that there are plans to allow the Public Trustee to disburse un-nominated CPF monies to a beneficiary representative on a member’s death. The beneficiary representative would then distribute the monies to the beneficiaries. This would apply if the total amount of the member’s CPF monies does not exceed the specified limit. Does this policy serve to benefit the family of members who did not name any nominees? This would be welcomed as I have residents who are still waiting for years to resolve the distribution of CPF monies. Can the Ministry also clarify how this process will be simplified and sped up? Who is eligible to be a beneficiary representative and what is the specified limit?

With that, I understand that there is still some amount of hesitancy towards nominating beneficiaries. The topic of death remains a heavy one to broach and some CPF members tend to take it for granted that there will always be a seamless transfer of CPF monies to their families. I would take this opportunity to remind all that life is unpredictable. We all know that. Arranging how our assets will be distributed would bring great peace of mind. I also urge the Government to remind members in simple terms, if possible, and make it easier for them to nominate their beneficiaries.

Next, can the Government clarify the amendment to abolish refunds of Retirement Sum top-ups to the giver in any event? As far as I am aware, refunds were never supposed to be given for accepted top-ups under the Retirement Sum Topping-Up scheme. And this is especially so because members who make CPF top-ups get personal income tax relief based on their contributions. This policy is clearly stated on the CPF website. So, can the Ministry clarify what were some circumstances under which refunds were approved, if any?

Third, I note with interest that the amendments also seek to provide greater flexibility and efficiency in the administration of the Act by providing for certain matters to be prescribed by subsidiary legislation, or to be determined by the Board or the Minister, instead of being stated in the Act. May I clarify if this is being introduced with the various appeals for greater flexibility of CPF usage in mind?

Fourth, how long would it normally take for the CPF monies to be returned to the beneficiary when the CPF member has passed away? I think many members have raised this. I note that the payment of interest would cease upon notification of a member’s demise in respect of the amount outstanding to the credit of the member that has not been transferred to the general monies of the CPF. If it takes a significant length of time, like a year or so, that is quite a significant amount of interest that is lost. So, how can transfer be expedited with minimal loss of interest?

Mr Speaker, fifth, when shares or classes of shares in any approved corporation are purchased with money withdrawn from the Ordinary Account, the designated shares will vest in the Board when the Board is notified that the shareholder is deceased. So, who makes the decision if there are rights issues, or opts to sell the shares because of mandatory purchase by a majority owner?

Mr Speaker, Sir, most Singaporeans agree that CPF savings are essential. They also appreciate that it is a safe and effective way to grow one’s retirement savings. I was a member of the CPF Advisory Panel from 2014 to 2016 and one of the recommendations was that every CPF member should be encouraged to have his or her own CPF LIFE plan with incentives to top-up the CPF Accounts for families with lower balances. This is especially important for housewives who are relying on their husband's CPF LIFE payouts, as women tend to outlive their husbands. The Panel had proposed then that members be allowed to transfer their CPF savings above what they require for Basic Retirement Sum to their spouses' Special or Retirement Accounts. In this way, each spouse would benefit from the extra interest for lower CPF balances and have their own lifelong income from CPF LIFE.

So, I am glad to see that amidst the uncertainties of the pandemic, there was a 40% increase in the number of members who made voluntary top-ups of their own or for their loved ones’ CPF savings. This is a testament to the trust that Singaporeans have in the CPF system.

At the other end of the spectrum, I have residents who hesitate to top up their CPF because they are afraid if they need the money, they will not be able to get it out. These tend to be the people who have lower incomes, who would benefit most from the additional top-ups. The difficulty to tap on large sums of CPF savings in times of need, such as a major illness, remains a significant pain point. I hope the Government will take this into consideration and introduce greater flexibility into the system.

Circling back to our performance on the Mercer Global Performance Index, our weakest link is the sustainability of the system, which was given a rating of 59.9 out of 100. What are the Government’s plans, moving forth, to improve in this area? Besides CPF, are we looking at other options, like tax-approved group corporate retirement plans? Are there plans to increase the CPF withdrawal age? The Netherlands, which is among the top ranking on the index, is raising its pensions withdrawal age from 65 to 67 years old in 2024.

Naturally, any change to the withdrawal age should be done with great deliberation, without discounting the concerns of those who worry that they will not be able to leverage their CPF savings in times of crisis. Perhaps, improving flexibility of withdrawals in tandem would help to alleviate such concerns.

Minister Tan See Leng, in his opening speech, had highlighted that amendments to the CPF Act aims to allow more flexibility and to simplify the CPF processes. I am supportive of the move to keep it simple and focused on the retirement objectives. Mr Speaker, Sir, I support the Bill.

Mr Speaker: Minister Edwin Tong.

1.06 pm

The Second Minister for Law (Mr Edwin Tong Chun Fai): Mr Speaker, with your leave, I will address Members' queries on the disbursement of un-nominated CPF monies and leave my colleague Minister Tan See Leng to deal with everything else.

Sir, I thank Members for their comments and suggestions. I believe the broad thrust of the speeches made by Members has been supportive of a more expedited process to disburse un-nominated CPF funds but some questions have arisen as to the process and how we safeguard the integrity of the disbursements, which I understand. And I will deal with the questions raised by Ms Ng Ling Ling, Ms Hany Soh, Mr Saktiandi Supaat, Ms Mariam Jaafar, Ms He Ting Ru, Mr Louis Ng and Ms Joan Pereira on this point.

Ms Ng Ling Ling and some Members have raised concerns that there could be a lack of recourse in cases where the beneficiary representative, whom I shall call "BR", does not exercise fairness in distributing the deceased’s un-nominated funds or unreasonably withhold the funds from beneficiaries. Ms Ng Ling Ling has raised some questions concerning the application process: how to identify the BR; how the Public Trustee intends to ensure the welfare of the remaining beneficiaries.

Mr Saktiandi Supaat sought clarifications on whether the policy will serve to benefit the family of members who did not name any nominees. He also asked who is eligible to be a BR and what is the specified limit. Mr Saktiandi Supaat also asked about the BR process: whether it could simplify and speed up the distribution of un-nominated CPF funds.

Ms Mariam Jaafar asked about the recourse that next-of-kin may have in the BR approach. Ms He Ting Ru sought clarifications on the specified limit and how it will be determined; and whether it may be changed over time.

Sir, let me first broadly outline the purpose of introducing the BR approach in this case. It is, as I have mentioned earlier, to simplify and make easier to facilitate the beneficiaries’ claim through the distribution of un-nominated CPF monies via the BR; and also to facilitate the beneficiaries, the speed at which it can be done, while at the same time managing and mitigating the risk of disagreement or conflict which might arise between the beneficiaries.

And to be clear, by beneficiaries, I refer here to those who are eligible for and entitled to the deceased CPF members’ un-nominated monies under the Intestate Succession Act for non-Muslims and the Administration of the Muslim Law Act for Muslims. The BR approach will, therefore, benefit these eligible beneficiaries of the deceased CPF member.

As a comparator, the BR approach, in this case, that we have introduced is not an entirely new concept.

Members might recall the “proper claimant” approach adopted by CPF Board which applies to cases where the nominee passes away after the deceased member has passed away and before the CPF funds could be distributed to the nominee.

CPF Board pays out the CPF monies due to the nominee to a “proper claimant” who is a party that claims to be entitled to the monies or assets. So, the concept and process are similar and, in some ways, modelled on the "proper claimant" approach.

We have considered the operation of that scheme and also thought about the issues of potential abuse that could be mitigated and addressed in this current BR scheme. So, we have introduced various safeguards to ensure that the beneficiaries’ rights and interests remain protected.

Let me now address them in the context of Members' questions.

To answer Ms Ng Ling Ling’s question on how a BR is identified and also Mr Saktiandi Supaat’s question on who is eligible to be a BR, let me first explain that a BR is not “pre-identified” by the Public Trustee's Office (PTO). It is not pre-identified from the list of eligible beneficiaries.

Rather, letters are sent out to the deceased CPF member’s next-of-kin and the individuals who reported the death, to invite them to submit a claim.

Upon receipt of the letter, the eligible beneficiaries of the deceased can come together. They can then, amongst themselves, identify and choose a representative. If they can all agree on that, that is the one representative that will come forward, on behalf of this pool, to make the claim and receive the payment from PTO.

If the eligible beneficiaries, however, cannot agree on a BR, or do not wish to appoint one, or is unable to come to an agreement as to how to distribute the un-nominated CPF funds amongst the eligible beneficiaries, then the current claim process will apply. So, we will default back to the current position. It will be a little bit more complicated, more forms need to be filled up, more information is to be provided to PTO but it will safeguard the process where there might be some disagreement between the beneficiaries.

The PTO will also carry out the following steps to safeguard the rights and interests of the eligible beneficiaries. This addresses Ms Ng Ling Ling’s question on how the Public Trustee intends to ensure that the welfare of eligible beneficiaries will be taken care of.

It will be a requirement of the application process for the BR that the eligible beneficiary applying to be the BR must declare that he or she is either the sole beneficiary, or that he or she has obtained the consent of all the other eligible beneficiaries which the BR is seeking to represent in making the claim.

The PTO will then confirm with the other eligible beneficiaries directly that they have given their consent, before the PTO pays out any un-nominated funds, CPF monies, to the BR for the BR’s onward distribution to the other beneficiaries.

Additionally, upon receiving the information, PTO will also undertake independent checks to verify the eligible beneficiaries’ details provided by the BR against available existing records. So, do a bit of due diligence to cross-check the information, to cross-verify the information provided by the BR. If there are discrepancies, the PTO might require further clarifications or further information before disbursing the funds.

To Ms Mariam Jaafar’s question, in cases of dispute over the nomination of the BR, the eligible beneficiaries may seek recourse by informing the PTO of the dispute. If that happens, the PTO will not proceed with the application for the BR to distribute the un-nominated sums. It will instead discuss with the eligible beneficiaries and see whether some consensus or an agreement can be reached. Failing which, again, we default back to the current standard process, as I mentioned earlier.

If despite these steps taken by the PTO to weed out these cases, there might be situations where the BR receives the un-nominated CPF funds before the disputes are surfaced and, subsequently, there are disputes over how it is disbursed or the manner in which it is done, the eligible beneficiaries can seek recourse against the BR directly under the law.

So, the new proposed section 25A(7) of the Bill makes it clear that any recourse that any person might have against the BR for any amounts paid out by the PTO to the BR are not affected even after payment of the un-nominated sums by the PTO to the BR.

On Mr Saktiandi Supaat and Ms He Ting Ru’s questions on the specified limit, I think Minister Tan See Leng earlier mentioned that the specified limit will be set at $10,000. Besides the PTO’s actions taken to safeguard the rights and interests of the beneficiaries, the framework is in-built with a safeguard to only apply to cases where the deceased member’s un-nominated sums do not exceed this sum. This specified limit, in our view, strikes a balance between expediency in the disbursement of the funds and safeguarding of the beneficiaries’ rights and interests, particularly in the context of larger estates. A specified limit of $10,000 would allow around half of the current number of cases coming forward to make a claim for un-nominated sums and we believe that, of this half, a substantial number will be uncontentious and will benefit from an expedited scheme like this.

To Ms He Ting Ru's question, the specified limit can be reviewed and adjusted in the future, if necessary, to allow more people to benefit from the BR approach. But we suggest we let this run for some time and iron out any rough spots before we look at adjustments subsequently.

With the various safeguards put in place for this new BR approach, eligible beneficiaries, in appropriate cases, who have consented to the BR receiving and distributing un-nominated sums, can benefit from this simplified and expedient new process.

Both Mr Saktiandi Supaat and Ms Hany Soh asked how the BR approach will assist in simplifying and speeding up the process. Apart from what I have mentioned earlier, let me highlight that the BR approach only requires the BR to provide proof that he or she is the eligible beneficiary with all the beneficiaries’ details, including his or her own. The BR need not submit proof of eligibility of all the other eligible beneficiaries, so this cuts down part of the administrative time and effort. The BR approach relieves the other beneficiaries from administrative inconvenience. By and large, in the majority of these cases, there is no disagreement, as I have mentioned, and, in such a situation, particularly amongst family members, the facilitation of the disbursements can be much faster.

Once the PTO receives confirmations, as I have outlined earlier, from all the eligible beneficiaries and the verifications are done, the application can be approved. In our estimation, the un-nominated CPF monies under this scheme could be disbursed to the BR within about two weeks from the approval of the application, as compared to a much longer period of time under the current standard claim process.

Ms Mariam Jaafar asked about the efforts made to contact and facilitate the disbursements of CPF monies of a deceased member to Singaporean family members who might be overseas, especially in light of the current continued travel restrictions in the ongoing pandemic.

As the PTO oversees the distribution of un-nominated CPF sums, I will address this point only on un-nominated sums, as far as the PTO is concerned, where the member did not make a nomination.

In such cases, the PTO will take steps to reach out to the deceased member’s next-of-kin, regardless of whether they are residing in Singapore or overseas. Using the next-of-kin’s last available address registered with the National Registration Office, the PTO will write to the next-of-kin using that address. Obviously, efficiency is subject to whether the address is accurate, whether it has been updated. If the overseas address is not registered, then PTO will rely on the member's next-of-kin to provide the office with any available alternative information.

Deceased CPF members’ next-of-kin who are residing overseas can also choose to contact PTO to enquire about the deceased CPF member’s un-nominated CPF monies. The process is entirely digital, the deceased CPF members’ next-of-kin who are residing overseas can submit their application to the PTO via the PTO’s online application form, together with any necessary supporting documents to evince or substantiate their position, including and proving their familial relationship.

Payments will also be disbursed electronically via telegraphic transfers or demand drafts if they prefer, or whichever other method, to their overseas account. So, generally, the answer to Ms Jaafar's question is that we will take proactive steps within reasonable information to identify these beneficiaries overseas and we will also try and facilitate in as easy as possible the distribution and disbursement of sums to them.

Mr Louis Ng suggested publishing guidelines or frameworks to help beneficiaries understand how much funeral expenses the Public Trustee typically agrees to defray. To Mr Louis Ng's question, relevant information on PTO’s reimbursement of funeral expenses is already currently available on PTO’s website. The reimbursement of funeral expenses out of a deceased member’s un-nominated CPF monies is capped at $6,000.

Eligible beneficiaries who intend to claim for the reimbursement of funeral expenses from the deceased CPF members’ un-nominated CPF monies may do so by submitting the relevant Funeral Reimbursement Form, with the appropriate supporting receipts and so on, after obtaining consent from the rest of the beneficiaries.

Mr Louis Ng also suggested allowing the Public Trustee to reimburse reasonable funeral expenses to a wider class of beneficiaries who might have incurred these expenses in good faith.

Under the CPF Act, the Public Trustee has the duty to distribute un-nominated CPF monies only to eligible beneficiaries. By extension, reimbursements for funeral expenses can only, therefore, be made to eligible beneficiaries and not to a wider pool, beyond what the statute provides. Such a requirement serves to protect the interests of the deceased CPF member’s eligible beneficiaries when the cost of the funeral expenses is being claimed. This also alleviates the risk of the PTO making payment to a claimant whom the eligible beneficiaries might well dispute the entitlement of the payment to.

Sir, with that, I believe I have addressed the questions raised in relation to the BR scheme and the un-nominated CPF funds. May I seek Members' clarifications on this point, if any, before Minister Tan See Leng proceeds to address the other issues raised by Members on the two Bills?

Mr Speaker: Clarifications, please? Ms Hany Soh.

1.20 pm

Ms Hany Soh (Marsiling-Yew Tee): I thank the Minister for the clarifications. I have two questions. Firstly, the Minister shared that upon receipt of letter, the parties will identify and choose a representative. If they are unable to reach agreement, then the current standard claims process will apply. In this regard, I wish to check whether the PTO can consider offering an alternate dispute resolution process, for example, through a mediation, when parties are unable to identify and agree on a representative so that the matter can still be processed expeditiously. That is the first question.

The second one is locating the beneficiaries, whether the PTO would consider perhaps, to find out whether the beneficiaries have any PayNow accounts and actually explore for the funds to be transferred through that manner.

Mr Edwin Tong Chun Fai: I thank Ms Hany Soh. On her first point, to the extent possible, PTO will obviously try to facilitate. I think it is in everyone's interest, including PTO, to try and find a solution and find consensus on a BR, so that the process can be simplified and expeditious. Failing that, the Member knows that there are a number of options for mediation for the parties to come to a consensus. It is not always standard and not always easy for every such situation because the reasons for the conflict may differ from case to case. But to the extent possible, PTO will try to facilitate.

On the Member's suggestion on PayNow, obviously, given the range of different electronic options I have outlined earlier, we will certainly consider PayNow or any other electronic payment platform options as viable alternatives.

Mr Speaker: Any other clarifications? Leader of the House.

Debate resumed.

1.24 pm

The Minister for Manpower (Dr Tan See Leng): Mr Speaker, Sir, let me begin by thanking Members for their suggestions and support for the Retirement and Re-employment (Amendment) Bill and the CPF (Amendment) Bill.

There were many points raised, reflecting the wide spectrum of views and the common interest we share in supporting our senior workers and fellow Singaporeans. Allow me to make a few general points before I address specific comments from Members on the Bills.

I thank Members for their various suggestions on CPF, as well as our retirement and re-employment policies. We constantly and continually review our policies and we will take Members’ suggestions into consideration.

Members recognise that legislation is not everything. The speeches have touched on the need to adjust our culture and our mindsets, both as a society and as businesses. Members also touched on important questions, which the Tripartite Workgroup on Older Workers had deliberated on extensively. In doing so, they considered the many perspectives which emerged from their public engagements, before arriving at their very balanced recommendations.

On the issue of whether a statutory retirement age is still needed, as highlighted by Mr Yip Hon Weng, Ms Sylvia Lim and Assoc Prof Jamus Lim, the Workgroup had considered this very carefully.

It looked at the experiences of other countries and found that countries without the equivalent of a statutory retirement age do not necessarily have better employment rates for senior workers, despite some of them having anti-discrimination legislation already in place. Some progressive employers may take the initiative to abolish their internal retirement age and allow workers to work for as long as they wish, and we wholeheartedly applaud them.

But as Mr Heng Chee How emphasised, the statutory retirement and re-employment age is still important as a floor and safeguard against employers who might not be as progressive. The continued relevance of this approach is borne out by facts. Singapore’s average effective retirement age has risen faster than the OECD average. These considerations, and the data that support them, are captured in the Workgroup’s comprehensive report. I encourage all Members to study the report.

On pace of implementation, the tripartite partners negotiated this very carefully before arriving at a consensus. The plan to raise the retirement age and re-employment age to 65 and 70 respectively by the end of this decade is ambitious, but it is achievable.

The first increase will take place on 1 July 2022 and it is on schedule. The timing of future adjustments will depend on prevailing economic conditions, but the resolve to stay the course is clear.

Mr Louis Ng asked why the range of retirement age that the Manpower Minister can prescribe in the law is being reduced from 62 to 67 years to 62 to 65 years.

Members of the House, before 2012, the concept of re-employment had not been introduced yet, so the only lever we had was the retirement age. But since then, we have seen how the concept of retirement age and re-employment age works well in combination. After consultation with stakeholders, the tripartite partners have agreed to continue with this strategy and, beyond raising the retirement age to 65 by 2030, they have also agreed to raise the re-employment age to 70.

The proposed legislative amendments thus fully reflect the tripartite consensus on this roadmap. This is our model: tripartite consultation with stakeholders, tripartite consensus and then tripartite implementation, with legal changes to reflect the plan.

We do not rule out future changes to our approach. This model of constructive tripartism will ensure that we are able to adapt and respond to such needs in the decades to come.

Mr Sharael Taha, Mr Yip Hon Weng, Ms Ng Ling Ling, Ms Joan Pereira and Ms Mariam Jaafar have spoken on the need to ensure that employers fulfil their re-employment obligations and that re-employment offers are fair. I agree. The system has worked well thus far. Tripartite partners have agreed upon a reasonable set of guidelines, laying out employers’ and employees’ responsibilities.

I will just highlight a few guidelines that are more relevant to the situations that Members have raised.

First, early communication and discussion are critical to ensure that re-employment offers are reasonable to both parties. The Tripartite Guidelines on the Re-employment of Older Employees make clear that employers should engage employees at least six months before they reach retirement age.

Second, on the issue of medical fitness, they should offer re-employment to eligible workers who are medically fit to perform any job within the company, not just the existing job role. Employers are also advised to presume that their senior employees are medically fit, unless there are clear reasons to believe otherwise. To Ms Ng Ling Ling’s concern, having chronic conditions alone cannot be used to justify denial of re-employment, if it does not affect their ability to perform the job.

The re-employment framework is designed to balance the need to enable senior workers to continue working, while giving employers sufficient flexibility so that businesses can remain nimble and sustainable. Different businesses may also face different challenges. So, we must strike a very careful balance.

I thank Ms Janet Ang for sharing her journey and her views towards retirement as a senior executive. Indeed, different individuals have different needs and expectations as they approach retirement. While some may want to stay on in their current roles, others may desire a job role with reduced work intensity or see themselves trying out new roles. This is why the tripartite partners have agreed that employers and employees should be given the flexibility to negotiate adjustments to the job roles, wages and benefits, as long as they are reasonable and based on factors like productivity, responsibilities, skills and the employer’s wage system.

Notwithstanding this, the vast majority of re-employed workers continue on their existing contract or a new contract in the same job. More than 95% of workers re-employed in the same job did not experience any cuts to their wages and benefits.

If an employer has considered all available re-employment options within the organisation and is unable to identify a suitable job for the senior worker, the firm may offer him or her an Employment Assistance Payment, or EAP, as a last resort. Let me reiterate – this is as a last resort, to help the worker tide over while he or she seeks alternative employment.

To Ms Nadia Samdin and Mr Patrick Tay’s queries about the sufficiency of the EAP amount, a fine balance was struck by the Tripartite Workgroup. If the EAP is too high, it may deter employers from hiring jobseekers who are approaching retirement age. If the EAP is too low, employers may too readily offer to pay the EAP. Nevertheless, the tripartite partners agreed to increase the minimum and maximum EAP amounts from 1 July 2022 onwards. This is in tandem with the growth in general wage levels.

Ms Ng Ling Ling also asked about the success rate for conciliation of re-employment disputes. After more than 10 years of implementation, we find that the majority of cases are often resolved expeditiously at mediation. This leaves a few cases that need to be surfaced to the Employment Claims Tribunal (ECT) for adjudication.

Mr Sharael Taha, Ms Janet Ang, Mr Liang Eng Hwa, Mr Henry Kwek, Ms Yeo Wan Ling, Mr Gan Thiam Poh, Ms Joan Pereira, Mr Yip Hon Weng and Ms Nadia Samdin also highlighted ageism and discriminatory employment practices as a concern. We agree that ageism and workplace discrimination of any form have no place in Singapore. As Members have noted in their speeches, the Tripartite Committee on Workplace Fairness, which I co-chair, is deliberating on the scope of legislation to address workplace discrimination. We are making progress in the discussions and we hope to finalise our recommendations by the first half of 2022.

I am glad that Members’ speeches in this House over the past two days also recognise that legislation is not a silver bullet nor a panacea. In this regard, I agree with Mr Heng Chee How, who has very wisely pointed out that strengthening the employability of our senior workers cannot start only when they are near retirement age. There is a need to invest in retraining and employment facilitation not only for our senior workers, but also for the future cohorts of senior workers. As Mr Patrick Tay has highlighted, employers play an instrumental role in this. And we are committed to providing the necessary assistance, including funding support. To Ms Nadia Samdin’s query on the extension of the Senior Employment Credit beyond 2022, we will also study it and update in due course.

Members of the House, I have already spoken extensively on the various ways that the Government is supporting upskilling and employment opportunities for senior workers in my response to several Parliamentary Questions last month. So, today, I will just highlight the critical roles that our tripartite partners NTUC and SNEF play in this endeavour. The Company Training Committees, or CTCs, established by NTUC early this year, are making their impact felt. The CTCs bring together the employers, HR and employee representatives to identify gaps and opportunities and develop the necessary training plans to align a company’s workforce to its business transformation roadmap. This ensures that our senior workers’ training needs are correctly identified, to enable them to contribute productively for many more years to come.

As highlighted by Mr Sharael Taha, Mr Abdul Samad and Ms Janet Ang, it is also important for companies to have structured career planning conversations with their employees, especially for those in their 40s or 50s. This allows training needs and suitable job roles to be identified early. Employees will also be more motivated to pick up new skills if they have a clearer picture of how they fit into their companies’ future plans. We are working with both SNEF and NTUC to encourage more employers to do so.

There are many other areas where the tripartite partners have been working closely on, including encouraging job redesign and flexible working arrangements, which Mr Yip Hon Weng, Mr Sharael Taha, Mr Henry Kwek, Mr Liang Eng Hwa, Mr Patrick Tay, Mr Ang Wei Neng and Ms Nadia Samdin have raised. We encourage the tripartite partners to do more and we will continue to give our fullest support.

Even as we make these legislative changes today, we will also continue to work with the tripartite partners to study best practices and review our framework where necessary to ensure its continued relevance. As mentioned by Mr Shawn Huang and Ms Yeo Wan Ling, it is also important for our workers to adopt a lifelong learning mindset. Continuing Education and Training, or CET, is just as important as pre-employment training (PET), as a means for our workers to upgrade their skills, remain relevant and keep pace with global trends and developments.

Let me now address Members’ points on the CPF (Amendment) Bill.

First, in response to points made by Mr Yip Hon Weng, Mr Liang Eng Hwa, Miss Cheryl Chan and Mr Gan Thiam Poh, let me reiterate that the proposed amendments to the CPF Act will not change the rules for CPF lump sum withdrawals or other social support schemes like Silver Support.

On CPF withdrawals, Mr Abdul Samad and Assoc Prof Jamus Lim suggested to allow members to start their CPF monthly payouts earlier, while on the other hand, Mr Saktiandi Supaat suggested to start later.

First, let me reassure everyone that the Government has not suggested changing the Payout Eligibility Age. The Payout Eligibility Age, or PEA, is not linked to the retirement or re-employment age. The current PEA of 65 strikes a balance between timely access to retirement income and providing a sufficient runway for members to build up savings for retirement, especially as Singaporeans are expected to live longer. Members continue to have the option to defer the payouts for higher monthly payouts. In fact, yesterday, I shared that for every year that they defer after 65, the increase could be up to 7% more per annum.

Members will also continue to have the flexibility to make lump sum withdrawals from age 55, years before they start their monthly CPF payouts. The banker friend that Assoc Prof Jamus Lim has, and I believe is likely to be as successful as Assoc Prof Lim himself, will be able to withdraw amounts well above the retirement sum at 55. This includes the $5,000 that he can withdraw unconditionally and the amounts in excess of his Basic Retirement Sum, given that he will likely own a property.

Similarly, the amendments to section 15 of the CPF Act are only intended to simplify it, and not alter the underlying policies and operational flexibilities.

Mr Louis Ng, Ms Ng Ling Ling, Mr Saktiandi Supaat, Miss Cheryl Chan and Ms Yeo Wan Ling asked what constitutes a “significant condition” in the Bill. Today, Members with conditions of any kind, including auto-immune or neurological diseases, can qualify for early withdrawal of CPF savings if they are certified by a doctor as having a reduced life expectancy or being permanently unfit to work, or lacking mental capacity. These are now collectively referred to as “significant conditions”. The Bill provides for these same grounds to be prescribed in the Regulations. Therefore, there are no changes to the qualifying rules for early CPF withdrawal.

I thank Ms Yeo Wan Ling for her observations on how decisions could be communicated to CPF members and would like to assure that CPF Board will certainly be mindful of her concerns. To Ms He Ting Ru's point, I would like to clarify that members with reduced life expectancy will, indeed, be able to benefit from the automatic disbursement of Ordinary and Special Account monies that I mentioned in my speech yesterday.

On Ms Ng Ling Ling’s suggestion to allow waiver of loan repayments under the CPF Education Loan Scheme for such members, I am happy to confirm that CPF Board already does so today on a case-by-case basis.

In simplifying the CPF system, CPF Board will also ensure that implementation is smooth for its members. On the top-up rules and the position of givers, CPF Board will take into account Mr Louis Ng and Ms Joan Pereira’s suggestions. I do believe that Singaporeans top up their loved ones’ CPF accounts out of the generosity of their hearts and to help boost their loved ones' retirement adequacy. This simplification should, therefore, not discourage top-ups. The objective is to simplify things for members, in response to feedback that the existing rules can be confusing.

Some top-ups are refunded to givers when their recipients exit the CPF system, while, as Mr Saktiandi Supaat observed, other top-ups are treated as gifts to recipients and not refunded, including cash top-ups made after 2008.

Mr Louis Ng, Mr Saktiandi Supaat, Ms Mariam Jaafar and Ms Hany Soh spoke about facilitating the disbursement of nominated monies. CPF Board already reaches out to nominees, including those overseas, once it is notified of a member's death and it disburses the monies within a month, having allowed time for medical institutions to deduct any medical bills from the deceased member's MediSave Account.

Nonetheless, CPF Board has plans to continuously streamline the disbursement process for nominated CPF monies and I thank Ms Hany Soh for her suggestion on this.

Beyond simplifying policies and streamlining processes, CPF Board will also continue to strengthen its public education and outreach efforts, as Mr Melvin Yong and Miss Cheryl Chan highlighted.

This will include educating members on the benefits of CPF top-ups to self and loved ones; nudging members to make nominations; making clear that nominations, like wills, are, indeed, revoked upon marriage; and clarifying the treatment of CPF monies upon members' passing, as alluded to by Mr Gan Thiam Poh, Mr Saktiandi Supaat, Ms Hany Soh and Ms He Ting Ru, as well as Ms Joan Pereira respectively.

We will also explore Ms Hany Soh's suggestion to send notifications to divorcees to prompt them to review their nominations.

Several Members of the House have provided feedback on policies which are not quite within the scope of today's Bill.

For example, Ms Ng Ling Ling and Miss Cheryl Chan on the allocation of monies across CPF accounts, Mr Yip Hon Weng on the Basic Retirement Sum, Mr Ang Wei Neng and Mr Gan Thiam Poh on housing issues, Mr Patrick Tay and Miss Cheryl Chan on self-employed persons, as well as Mr Saktiandi Supaat on tax-approved group corporate retirement plans.

The Government will take all these into consideration as we review our policies from time to time.

Finally, on the raising of CPF contribution rates for senior workers, I thank Mr Henry Kwek, Mr Ang Wei Neng and Mr Edward Chia for their support for our longer-term plans, including the eventual full contribution rates for workers aged between 55 and 60.

The Government will support employers through the CPF Transition Offset, which Mr Heng Chee How, Mr Melvin Yong, Mr Gan Thiam Poh and Ms Nadia Ahmad Samdin have all touched on. This will be implemented on 1 January 2022 as part of the Senior Worker Support Package. This is in tandem with the first increase in CPF contribution rates for senior workers.

In closing, I would like to thank Members of the House for their support of the Bills.

The two Bills will help our members in three main ways: first, by providing members the flexibility to work longer if they wish to; second, by making it easier for members to build up their retirement nest egg; and third, just as important, by making it easier for members to receive their retirement payouts.

Together, the Bills will help our members better prepare for and enjoy their retirement. But the work does not stop here. We are confident that further progress on senior worker employment will be made. We will continue to simplify rules; we will continue to improve communications to our CPF members.

With the support of Members of the House, businesses, unions and, most importantly, fellow Singaporeans, we will be a more inclusive economy and society. Mr Speaker, Sir, I beg to move.

Mr Speaker: Clarifications, Ms Sylvia Lim.

1.51 pm

Ms Sylvia Lim (Aljunied): Thank you, Mr Speaker. I have a clarification for the Minister regarding the statutory retirement age.

Earlier, he mentioned that the consensus among the tripartite partners was that this was still necessary on the statute books as it serves as a floor to protect workers. My question is that most, if not all, employment contracts, as I have mentioned in my speech, do have a termination clause where either the employer or the employee can give notice of a short period, one to two months, to stop the employment relationship and no reasons need to be given. And if notice is not sufficient, payment in lieu can be made in accordance with that clause.

So, would we not agree that, actually, that clause can be exercised at any age of the employee? To that extent, my question is how far does having a statutory retirement age in that sense undermine the operation of that clause which is in the contract?

Dr Tan See Leng: I thank Ms Sylvia Lim for the question. Indeed, I am aware of the fact that many companies, especially those hiring, those with senior management employees, for instance, have this clause which puts many, many workers on fixed employment contract terms.

We should look at it from different angles. At the point of the recruitment, particularly when his tenure, based on the fixed contract, has expired and if he is looking for a job, and if, say, it is within three to five years of the statutory retirement age, no company should deprive him of the opportunity of being employed because of the fact that he is near the statutory retirement age. That is the first point.

On top of that, if an employee has been dismissed on grounds of age, and if they believe so, this retirement age allows the employee to appeal to MOM to look into it and to investigate whether there were grounds.

To Ms Sylvia Lim's point about many of these contracts being fixed-term contracts, the tripartite committee on workplace fairness will also look into the legislation covering age discrimination in the workplace.

Mr Abdul Samad (Nominated Member): Mr Speaker, I thank the Minister for the clarification.

I have a clarification with regard to the eligibility payout at 65. Firstly, as I have said in my speech, I am not here to encourage people to work to their last breath. Has MOM done a study on how many of those actually choose to retire early, maybe because of age or they just want to retire early? Hence, can they actually ask for their CPF payouts to be at an earlier age compared to 65? That was the main gist of me requesting for the Ministry to explore the possibility if someone decides to retire before the legislative age because they want to do something personal. To them, it is their money and they are also requesting whether they can get part of the share.

Dr Tan See Leng: I thank the Member, Mr Abdul Samad, for his question.

If I can use an illustration. At 55, the member can withdraw a guaranteed sum of $ 5,000, provided he has the money in his CPF account. In the Retirement Account, he is expected to have the Basic Retirement Sum (BRS), which I believe is pegged at $93,000 today. If his property is pledged – and I believe the majority of Singaporeans today would have a property and it is pledged to the CPF – he can withdraw not just the $5,000 at the age of 55, he can also withdraw a sum higher than the $5,000 from his Special Account and his Ordinary Account. That is what is current today.

If he has the Full Retirement Sum (FRS) set aside, which is double that of the BRS – I think it is now $186,000; because it is $93,000 multiplied by two – if he does not have his property pledged to CPF, he can withdraw, again the minimum $5,000, and amounts in his Special Account and also the Ordinary Account.

So, the Payout Eligibility Age (PEA) set at 65 is really reserved for the amount, the BRS or the FRS, in his Retirement Account to stream out the monthly payout starting from 65. For those who were born on or after 1958, this will go into CPF LIFE and it will be streamed out as an insurance annuity that will be paid out for life every month.

I hope that explains the stance. Nowhere in any of the changes that we are proposing today, which I hope that Members will support, would change any of the dynamics whatsoever. The members can still withdraw their money from age 55 onwards, but subject to those conditions that are already in existence today.

Mr Speaker: Any other clarifications?

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Dr Tan See Leng].

Bill considered in Committee; reported without amendment; read a Third time and passed.