TL;DR – He said to focus on the ability of workers, not their age.
In the Budget debate 2018 held in Parliament this week, Labour MP Heng Chee How caught the media’s attention for calling for a review of the re-employment age to help older workers work longer.
Currently, the minimum age for retirement is 62 years. In Singapore, under the Retirement and Re-employment act, employers must offer re-employment to eligible employees who turn 62 up to the age of 67 to continue working in the organisation.
Mr Heng, who is also the Deputy Secretary-General of National Trades Union Congress (NTUC), suggested forming a tripartite committee to assess the Effective Retirement Age and consider if there’s still a need for a Statutory Retirement Age, amongst other recommendations.
I decided to find out more and Mr Heng was nice enough to oblige me by sharing his thinking behind Singapore’s retirement and re-employment policies and what he’s really advocating for this time.
Here’s how the conversation went
J: First things first, would you like to share which areas the Labour Movement is focussing on to help Singaporeans do better?
This year, we concentrate on three areas, or three groups of working Singaporeans.
Firstly, the “High Age”, which refers to the ageing local workforce and its implications.
Secondly, NTUC will focus on “Low Wage”. Over the years, dedicated tripartite efforts have brought about improvements in the terms of work for lower wage workers. The Progressive Wage Model (PWM) is one initiative that has helped thousands of low-wage workers. Did you know that from 2012 to 2017, wages of those in the 20th percentile have shown the largest increase? But the road ahead remains long and hard, and we need to do more to better the lives of the “Low Wage”.
Lastly, the “Double Middle”. This is an era where no jobs is secure, including PMET jobs. With changing technology alone, many jobs will be redesigned or rendered redundant, and be replaced by new roles and requirements. Add to that the continuing pressure to delayer and flatten organisations, and to outsource jobs and functions, etc, we can foresee that even if you have a job today, you might not have a job tomorrow.
So for this Budget debate, all the Labour MPs will be raising issues relating to these and also other challenges that are faced by working Singaporeans, including freelancers, youth workers and young working parents.
J: So now, let’s move into your speech proper. What was your main message?
My speech is mainly on “High Age”.
For the first time ever in our history, the proportion of our citizen population below 15 years old equals that of our citizen population above 65 years old. In years to come, there will be more citizens above 65 than there are those below 15.
At the core of my Budget debate speech is the call to value the wisdom and experience of the older workers. Or in other words, old is gold.
J: Singapore’s Statutory Retirement Age is at 62. Is the Government trying to make its people work till 62?
Our definition of Statutory Retirement Age is this – when we say that it’s at 62, it means it’s illegal in Singapore for a company to retire an employee for no other reason other than age when the age is below 62.
Under our Retirement and Re-employment Act (RRA), retirement age is 62 years old. No company can ask you to leave just because you’re getting old(er) until you reach 62 years old. Once you hit 62, employers are required to offer re-employment to eligible employees who turn 62, up to age 67, to continue their employment in the organisation.
J: You talked about Effective Retirement Age in Parliament. How’s it different from our current Statutory Retirement Age?
We know that companies may actually cease to employ people for a variety of reasons, sometimes due to restructuring, downsizing etc. But in any case, if companies don’t want to keep the employees for long, they can actually find different ways of ceasing their employment. For example, not renewing contracts and so on and so forth.
Your statutory retirement age may be at 62, but because of all these things that happen in between, people may actually leave the workforce at an earlier age, and some may find it very difficult to get back in.
J: So Effective Retirement Age refers to the real age which people exit the workforce?
Right. You may be 62, but I may be 45, got retrenched and I can’t get back into the workforce. You might find that actually the effective and real age is below 62. We can even set the statutory retirement age at 200 years old if we so wish, but with technological changes, change of business models etc., people might be knocked out earlier. This trend may become more prevalent in this era of disruption if we’re not careful.
J: Will it be more effective to replace Statutory Retirement Age with Effective Retirement Age?
No, you cannot replace it with an Effective Retirement Age. This is especially so if we suspect the Effective Retirement Age is lower than the mandatory statutory one. Besides, the Effective Retirement Age may vary from industry to industry, and from job to job.
My calling for the measurement of the Effective Retirement Age versus the Statutory Retirement Age is to see whether or not there is a gap, and how big that gap is.
J: If there’s a gap…?
If there’s a gap between the Statutory and Effective Retirement Ages, and especially if it’s a significant one, then we look at these components – employer attitudes, business model changes, technological model changes, competition sometimes wiped out companies and so on, ability or willingness or inability of workers to keep up and keep relevant – and say that in each of these components, what is it that we can do positively to reduce the barrier.
J: If Effective Retirement Age is real and meaningful, what’s this thing about considering whether or not to remove the Statutory Retirement Age?
Effectively what I’m saying is that you can do away with statutory retirement age but just state that nobody can retire people just on age alone. You can terminate people based on evidence for poor performance, for health that cannot hack the job anymore, for conduct issues, disciplinary issues etc. But on age alone…there’s always a very fit and able older person and there’s also a young and useless person right?
It’s not about the age, it’s about the ability.
J: Some people have this impression that with this Statutory Retirement Age, employers can hand you a letter, one day after you turn 62 and say happy retirement. But if you remove the statutory retirement age, employers can no longer do that.
It’s a little more nuanced than that because it sounds like you’re preventing people from ever terminating the employment of people. If you do that, who want to employ older workers? It’s very dangerous right?
I’m not saying that. All I’m saying is that it should be on the basis of ability and certainly on performance.
After chatting with Mr Heng for an hour, I see merits in removing the Statutory Retirement Age to shift the conversation on hiring older workers on their ability instead of age.
Of course, that’s an ideal stage to reach but unfortunately, ageism still exists in our society.
At least with the Statutory Retirement Age and re-employment laws, it protects older workers from discriminatory employers and gives them a chance to work till 67 if they’re able to and choose to do so.
Old is gold. So how can employers better value older workers for their wisdom and experience?
(This interview has been lightly edited and condensed for clarity. Featured image via Labourbeat.org)