ECONOMY Singapore reflects wider global trend as retirement age is raised

Singapore extended support for older workers of the ageing island nation as the current leadership of the city-state prepares to hand over reins to a new generation in the next few years.

The retirement age will be gradually raised to 65 from 62, Prime Minister Lee Hsien Loong said on Sunday in his annual National Day Rally speech. The re-employment age, where employers must offer work in the same organisation, will rise to 70 from 67.

Singapore will also increase pension contribution rates for workers so that by 2030, any worker aged 60 or below will get the full rate, Mr Lee said.

The government is looking ahead to elections that must be held by 2021, and Mr Lee – son of the country’s founding leader – is preparing to hand power to new leaders “in the next few years”. The latest measures build on support for Mr Lee’s government which has already set aside $4.4 billion (Dh16.2bn) this year for a fund that includes subsidised health care for those in their 60s.

The pledges come as the trade-dependent nation grapples with fears of a global recession and an intensifying rivalry between its two biggest trading partners, the US and China. In the past week the government slashed its economic outlook for 2019 to a range of zero to 1 per cent growth, predicting what could be its most sluggish year in a decade, Bloomberg reported.

Singapore has among the lowest retirement ages in the world. However, as life expectancy increases, many countries plan to raise their retirement ages over the next decade.

In the UAE, where the average age of a worker is only 30, the retirement age for Emiratis is 49 and for expatriate residents is 60. Expatriates who are older than 60 are allowed to work up to the age of 65 after obtaining approval from the Minister of Human Resources and Emiratisation.

After the age of 60, labour cards are renewed annually, according to the UAE government website. Company owners do not have an age limit. In the European Union, the most common retirement age is 65. Spain, Germany and France plan to raise their retirement age from 65 to 67, while 68 in Britain and Ireland is the target, says the Finnish Centre for Pensions.

In some countries, retirement age is different for men and women. Women have a lower retirement age because their life expectancy tends to be longer but generally, as the retirement age rises, women’s retirement ages will be the same as those of men, the Finnish pension regulator found.

Following the address in Singapore, the opposition Singapore Democratic Party said Mr Lee had failed to show that citizens actually wanted to work longer. “Many Singaporeans had hoped to hear bold and dynamic proposals to deal with the challenges facing us in a rapidly changing world with huge geopolitical challenges,” the SDP said. “Unfortunately, I think we were disappointed.”

The re-employment age, where employers must offer work in the same organisation, will rise to 70 from 67