In August 2019 the Singaporean government announced legislation that will raise the national retirement age to 65 and re-employment age to 70 by the year 2030. Increases in the Central Provident Fund (CPF) contribution rates for older workers is also part of the change.
The re-employment age was increased because Singapore has one of the world’s longest life expectancy rankings (85-year average), and many workers want to remain employed well into traditional retirement years. Both employers and older employees are expected to make adaptations for these employees to remain productive later in life.
Asinta Singaporean Partner, Sunil Chugani, CEO of Galaxy Insurance Consultants, puts the changes into context. “Currently the existing retirement age is 62, and the re-employment time span is 5 years after the official retirement age, or age 67. Beginning in 2022, the retirement age increases by one year to age 63, and the re-employment age increases to 68. By 2030, the retirement age increases to 65, and the re-employment age increases to age 70.”
Chugani further explains the implications for employer contributions. “Right now, Singaporeans and permanent residents are entitled to provident fund (retirement) contributions by employers. The first $6,000 in monthly salary qualifies for Central Provident Fund (CPF) contributions. This is tabulated at 37% of salary, 20% contributed by employees and 17% by employers.” He continues, “Currently, 37% is applicable up to age 55, however that will be extended to 60. Those aged 55 to 60 have a 26.5% contribution level (combined), people aged 60 to 65 are at 16.5%, and contributions are at 12.5% for those above 65. It is expected that all of these brackets will move upwards over time, and by 2030, the full CPF rate will be applicable for those age 55-60.”