Singapore raises retirement and re-employment ages to 65 and 70

Singapore will soon pass the Retirement and Re-Employment (Amendment) Bill 2021 and CPF (Amendment) Bill 2021 which will support older Singaporeans who want to continue working.

Effective 1 July 2022, the retirement and re-employment ages will be raised to 63 and 68 respectively. Employers in Singapore must offer re-employment to eligible employees once they reach retirement age.

Mayumi Soh of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: “This is largely in line with the recommendations which were previously made by the Tripartite Workgroup on Older Workers in 2019. Employers should take note of the new requirements and make arrangements to update their workplace practices.”

Employers who voluntarily re-employ workers aged 65 and above will receive an additional offset of up to 3% of an employee’s monthly wages, known as the Special Employment Credit (SEC), according to the Ministry of Manpower (MOM).

A separate bill, the CPF (Amendment) Bill, will streamline the Central Provident Fund (CPF) system. The contribution rate for workers aged 55 to 65 would go up by 2% on 1 January 2022, and the rate for workers aged 65 to 70 will go up by 1.5%, according to a Business Times report.

There are no changes to CPF withdrawal ages. People who are 50 can withdraw at least S$5,000 (US$3,700), and they can still start their CPF pay-outs from 65.

CPF top-up and pay-out procedures will be streamlined. Currently, Retirement Sum Scheme members who have spent their Retirement Account (RA) savings can only continue receiving pay-outs if they apply to transfer remaining funds in their Ordinary Accounts (OA) or Special Accounts (SA) to their RAs.

With the change, OA and SA savings will be automatically disbursed to members when they have used up their RA savings. 83,000 CPF members are expected to benefit from it, which is expected to take effect in 2022.

The combined tax relief cap for the Retirement Sum Topping-Up and Voluntary Contributions to MediSave Account schemes to S$8,000 for top-up givers, effective 1 January 2022. The previous cap for Retirement Sum Topping-Up was S$7,000, while tax relief for voluntary MediSave top-ups went to recipients.

From 2022, relatives of a CPF member who died without nominating account monies will be allowed to appoint a "beneficiary representative". The representative can submit a consolidated claim for the funds in the dead member's account at a maximum amount S$10,000.

From April 2022, members' funds would be retained for no longer than 6 months after their deaths comparing current seven years.

If a nominee does not make claims within six months, the money will be transferred from the deceased member’s CPF accounts, and no interest will be payable from then. Nominees will still have the right to claim the nominated money at any time.