Singapore to Raise Retirement Age Amid Workforce Challenges
Singapore to Begin Raising Retirement Age From July 1 Next Year
(Bloomberg) -- Singapore is planning to begin raising its retirement age next year as the city-state seeks to address the manpower challenges of an aging population.
The retirement age will be raised to 63 from 62 from July 1, Minister of Manpower Tan See Leng said in parliament Monday at the start of a debate on a bill implementing the changes. Employers will also be required to offer to re-employ workers as old as 68 in the same organization, up from 67.
The shift is an attempt to slow the shrinking of the domestic labor pool as the sizable percentage of working-age population available to support the economy is “unlikely to last,” said Alvin Liew, a senior economist for UOB Ltd, with Singapore having the longest-living and oldest population among Southeast Asian nations today.
With increasing life expectancy and low fertility rates, the proportion of elderly citizens in Singapore is rising rapidly, the government has warned, with one in five residents forecast to be above 65 by the end of the decade. Government figures show that the age group has doubled over the past two decades to 639,000 this year.
An extension in retirement age will only partially tackle increased spending on health care and social services and reduced tax revenue from workers retiring, said Liew, which means the government will need to find other avenues to meet higher social expenditure, like the previously announced increase in the goods and services tax.
Singapore has also outlined plans to raise age limits further, with employers being required to re-hire staff until they are 70 by 2030. The timing of future adjustments will depend on prevailing economic conditions, Tan said Tuesday.
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