This is to give way to improvements in workers’ life expectancy.
The Tripartite Workgroup called to raise the retirement age to 65 and the re-employment age to 70 by the end of the next decade and demanded that the first increases to take place by 1 July 2022, a document has revealed. This is after prime minister Lee Hsien Loong has approved the reforms in his National Day Rally speech.
This is to take into account the workers’ improvements in life expectancy, the better-educated and higher-skilled workers, and enhanced organisational capacity to manage older workers well, TWG said.
Additionally, TWG said that those aged 55 to 60 should reach the total CPF contribution rate of 37%; those aged 60 to 70 should have smaller but meaningful increases in CPF contribution rates and that those aged above 70 should see no change to their current CPF contribution rates.
The current full CPF contribution rate is 37% for workers aged 55 and below.
“Raising their CPF contributions could affect their employability with not much boost to their retirement savings, as employers have no obligation to re-employ workers beyond 70,” the Workgroup said. ”As a start, employers and workers should each increase their CPF contribution rate by either 0.5%-point or 1%-point in 2021."
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