Re-Employment Legislation Takes Effect In Singapore

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Re-Employment Legislation Takes Effect In Singapore

Wednesday, January 25, 2012

The implementation of new rules and support for SMEs and other businesses in Singapore to re-employ older workers, in the face of a rapidly ageing population took effect earlier this month.

The Retirement and Re-Employment Act has been several years in development and has put in place a framework for eligible workers to extend their careers beyond the current retirement age of 62, initially to the age of 65, but potentially to 67.

A system of subsidies and grants has been put in place for SMEs to help defray the cost of ensuring that older workers remain "economically productive".

The assistance provided comprises subsidised human resources training under PREPARE (or the Programme for Re-Employment Practices: A Roadmap for Employers), assistance with putting in place systems (including an e-performance appraisal system) geared towards the re-employment of older workers, and (for those companies deemed to have fulfilled the criteria laid out under the scheme following an audit) a SGD10,000 grant.

In order to be eligible to participate in the scheme, companies must have a minimum of five employees contributing to the Central Provident Fund (CPF), but no more than 200, be registered or incorporated in Singapore; and have a local shareholding of at least 30%.

Increases in life expectancy have led the government to predict that Singapore will have a population of 500,000 above 65 by 2020 (compared to 300,000 in 2007), requiring a longer working life in the majority of cases, in order to ensure sufficient funds for retirement.