Earlier this year, Nominated Member of Parliament Associate Professor Daniel Goh floated the idea of abolishing the retirement age during Singapore's parliamentary debates over the 2019 Budget. His rationale was that the skills and experience of older workers are still valuable to the economy and society.
Removing the retirement age does not mean that Singaporeans are required to work until they die, but rather, it lets them continue to contribute to the economy if they choose to do so.
In academia, studies have established the fact that most older Singaporeans prefer to work in their greying years as it gives them the ability to be independent and self-sufficient.
Given Singapore’s persistently low birth rates and a greying population, the re-employment of mature workers will become a pressing social issue in time to come.
This demographic shift will have a profound impact on how organisations manage their human resources. Incidentally, an ageing population can bring about some benefits to the economy. These include:
- Continued productivity even in old age
Advancements in technology, healthcare and lifestyle changes are giving Singaporeans a higher standard of living and allowing them to take better care of themselves physically, mentally and socially. This allows them to stay productive despite getting on in years.
Increasing life expectancy, with a declining risk of mortality, thanks to improvements in healthcare technologies, have led to greater education attainment.
This might be because a longer life provides added motivation to individuals to accumulate knowledge. The average person can now boast a longer trajectory to capture the returns to their investments in things like skills training and education – and obtain more educational qualifications in one or more fields.
- Sharpening of one’s skills
Some skills improve with age. These so-called “age-appreciating” skills include technical, writing, oral and interpersonal skills, and teamworking.
These are skills that are valued in the workplace, and even more so in the future, as mature economies move away from physically demanding industries to knowledge- and skill-based sectors.
That said, proponents of the retirement age argue that a defined retirement age provides opportunities for the young to advance their careers by retiring the “old guards” with options to step down into part-time or project-based work.
However, in view of the abovementioned benefits, the retirement age may seem like an unwelcomed hinderance, preventing older workers from contributing to the economy.
From the perspective of an older worker, the retirement age could potentially introduce friction, bias and even lower wages and benefits when workers are rehired and put on a new contract after the retirement age.
Currently, employers are mandated by law to offer eligible older workers re-employment on a contract basis once they turn 62. These employers are not required to re-hire their older workers on the same terms and conditions as before, causing uncertainty about one’s employment and remuneration.
This is an issue that can be easily managed by tweaking our re-employment rules regarding the retirement age.
In October 2018, insurance company Prudential Singapore made the retirement age a thing of the past. Employees at the company can now enjoy the flexibility of staying within the company beyond the retirement age under the same terms and conditions as what they currently receive.
The move is deeply reflective of a vital need for us to have a national discourse on retirement and to reconsider its relevance in the next decade.
As more people in their 60s become a larger part of our demographic structure, Singaporeans need to rethink the relevance of the retirement age as these individuals will play a bigger role in ensuring our future economic successes.
Mature workers are shaping up to be the key drivers of our economy in the time to come. Retiring them prematurely will result in some serious repercussions for our continued growth. It is time we take notice and act to overcome these unwanted consequences.
This article has been adapted from an earlier commentary: "If more work in old age, how relevant is the retiremment age?"by Dr Nicholas Sim, Senior Lecturer at the Business Analytics Programme, School of Business, Singapore University of Social Sciences (SUSS).