Re-Employment and Retirement in Singapore: Answering Your FAQs
During the Singapore Budget 2019, Finance Minister Heng Swee Keat announced a slew of measures to support older workers. These included higher increases in pay-outs under the Workfare Income Supplement (WIS) programme for older, lower-wage workers and extensions of the Special Employment Credit (SEC) and the Additional SEC Schemes, which seek to incentivise and encourage employers to hire older workers, to 31 December 2020.
With a growing ageing population and increasing numbers of Singaporeans choosing to be in the workforce for longer, it is important for older workers to better understand their rights, and for employers to be more aware of their obligations with regard to re-employment after reaching the retirement age.
This article aims to answer some common questions on this topic to ensure older employees can prepare for re-employment, and that employers adhere to good re-employment practices.
Retirement in Singapore
What is the retirement age in Singapore?
Under section 4 of the Retirement and Re-employment Act (RRA), the minimum retirement age by law is 62 years, up to a maximum of 67 years of age, if you:
- Are a Singapore citizen or permanent resident; and
- Joined the organisation or were recruited before the age of 55.
Can I retire earlier than the stated retirement age?
You are not obligated to retire at the prescribed minimum retirement age of 62 years. You may retire at an earlier age if you wish.
Can my employer dismiss me on the ground of age before I’ve reached the retirement age?
Under section 4(2) of the RRA, an employer is not allowed to dismiss an employee, who is below the minimum retirement age of 62 years old, on the ground of age.
Employers who do so can be found guilty of an offence and liable to a fine up to S$5,000 and/or a term of imprisonment of up to 6 months. See below for more information on what to do if you have a dispute with your employer over dismissal due to age.
Am I allowed to continue working after reaching the retirement age?
You are allowed to continue working after reaching the retirement age as long as you are willing and able to do so.
Also, before you turn 62, your employer must offer you re-employment in your current organisation if you meet the eligibility criteria for re-employment, as outlined below.
Re-Employment after Reaching the Retirement Age
What is re-employment?
Re-employment refers to the re-contracting of employees who have reached the retirement age, to allow them to continue working if they are willing and able to. This is done by offering such employees a re-employment contract.
What is the re-employment age in Singapore?
As of 1 July 2017, the re-employment age (i.e. the maximum age an employee can be re-employed until) is 67 years old. This means that employers must offer re-employment to eligible employees, who turn 62, to be re-employed until the age of 67.
Who is eligible for re-employment?
In order to be eligible for re-employment, you must satisfy the following criteria:
- Be a Singapore citizen or Singapore permanent resident;
- Have worked with your current employer for at least 3 years before turning 62;
- Your employer has assessed your work performance to be satisfactory;
- You are medically fit (i.e. mentally and physically able to continue working); and
- You are born on or after 1 July 1952.
However, the following categories of employees are exempted from re-employment:
- Public officers serving in the police, prisons, narcotics, civil defence, and corrupt practices investigation service;
- Persons enlisted for regular service with the Singapore Armed Forces;
- Auxiliary police officers;
- Public officers and statutory board employees who are eligible for benefits under the Pensions Act;
- Cabin crew from commercial aircrafts;
- Employees who work 20 hours or less per week;
- Employees on fixed term contracts for specific projects, where employment is expected to cease when the project ends; and
- Employees who were first employed after 55 years of age and have worked with the company for less than 3 years.
If you are not eligible for re-employment, your employer should inform you of this at least 3 months before you turn 62 to give you time to look for a new job opportunity.
In addition, employers are encouraged to help older employees who are not eligible for re-employment in their job search by offering services such as career counselling.
Is re-employment for everyone? What if I do not wish to be re-employed?
Re-employment allows you, as an employee, the option to decide if you wish or need to work longer. You are not required or compelled to continue working or be re-employed after reaching the retirement age, even if you are eligible to.
If you decide that you do not wish to be re-employed once you reach the retirement age, you may inform your employer of your decision upon receiving the offer of re-employment. Your employer may then require you to confirm your decision in writing.
If you accept an offer of re-employment and subsequently decide that you do not wish to continue working, you can exercise normal termination and serve notice in accordance with the terms of your re-employment contract.
Can I still work after the maximum re-employment age of 67 years?
There is no legal provision in Singapore that prohibits you from working after the maximum re-employment age of 67 years. This is so long as you are medically fit and willing to work, and if such an arrangement can be accommodated within your current organisation.
Additionally, Manpower Minister Josephine Teo has revealed in a statement that the re-employment and retirement age will be raised, although the details of such a plan have yet to be determined.
Understanding the Offer of Re-Employment
Re-employment is usually offered through a contract.
Your employer should consult and begin discussions about your re-employment with you at least 6 months in advance of your 62nd birthday. Your employer should also offer you the re-employment contract at least 3 months prior to your birthday. (These timelines also apply to any subsequent re-employment contracts offered for renewal.)
During the re-employment discussions, employees and their employers can work out mutually beneficial and/or flexible arrangements in their organisations. The re-employment terms, including the job position, working hours and salary, may also be re-adjusted.
If you are agreeable to the re-employment terms in your contract, your re-employment contract will take effect on the same day you turn 62. This means that if you turn 62 on 1 March 2019, your re-employment period will commence on 1 March 2019 as well.
According to the Tripartite Guidelines on the Re-employment of Older Employees, your re-employment contract should be for a period of at least 1 year, with subsequent re-employment contracts being renewable every year up to the maximum retirement age of 67 years. Apart from renewable 1-year contracts, it is also possible for your employer to offer a 5-year fixed-term contract up to the retirement age of 67 years.
Should your employer not approach you to discuss re-employment arrangements, and you do not indicate your wish to retire or to not be re-employed, it will be assumed that you will continue working in the same job after you turn 62 years of age. It will also be assumed that you are entitled to the same terms and benefits as stated in your initial contract of employment.
What Can My Employer Do If They are Unable to Offer Me Re-Employment Despite My Eligibility?
1) Transfer re-employment obligations to another employer
It may be the case that your employer may be unable to offer you re-employment if, despite reasonable efforts, there is no suitable or available job vacancy in your current organisation.
In these circumstances, it is possible for your employer to transfer their re-employment obligations to another employer. If so, the following conditions must be met:
- The new employer must agree to the transfer of your employer’s re-employment obligations; and
- You must agree to the offer of re-employment by the new employer.
You, as well as your current employer and new employer, will be required to complete a consent form to reflect this agreement for re-employment. A sample of the consent form is available here.
However, you are not obliged to accept the new employer’s offer of re-employment.
2) Offer an Employment Assistance Payment (EAP)
The EAP is a one-off payment offered by your current employer as a last resort if they are unable to offer you re-employment within the organisation, after considering all available options. For example, if your employer has considered re-deploying you to a different job but there is no vacancy.
This sum of money is intended as a form of financial support while you search for other employment opportunities. The Ministry of Manpower (MOM) recommends that the payment provided should be equivalent to 3.5 months’ salary, with a minimum amount of S$5,500 and a maximum of S$13,000.
You will not be entitled to an EAP if you:
- Mutually agree with your employer that you will not receive it
- Decline an offer of re-employment from your current employer
- Are not eligible for re-employment
However if your employer has helped you obtain another job with a new employer, you are still eligible for the EAP even if you choose to turn down the offer.
Resolving Re-Employment Disputes with Your Employer
Disputes with your employer may arise in the following circumstances:
- There are disagreements in negotiating the terms of your re-employment contract
- You have not been offered re-employment and/or you disagree with your employer’s reasons for it
- You find the EAP amount to be unreasonable
- You have been unfairly dismissed due to your age
As far as possible, you should try to resolve any disputes with your employer in an amicable manner or seek assistance from your union, if applicable.
Otherwise, you may wish to approach MOM or the Tripartite Alliance for Dispute Management (TADM).
Do note that you may be asked for the following when approaching either organisation for assistance:
- Details of your dispute with your employer
- Relevant supporting documents, e.g. your re-employment contract
Seeking assistance from MOM
If you are covered by the RRA (i.e. you are a Singapore citizen or permanent resident, and joined the organisation or were recruited before the age of 55), you can seek assistance from MOM if you believe you have been wrongfully dismissed due to your age. If you are not covered by the RRA, you may wish to seek assistance from the TADM (see below).
To seek assistance from MOM, you will need to complete the appeal form, and return it to MOM via email or post:
Labour Relations and Workplaces Division
Ministry of Manpower
1500 Bendemeer Road
If your appeal is successful and the Minister for Manpower is satisfied that you were wrongfully dismissed, your employer may be ordered to:
- Reinstate you to your former job and compensate you for the loss of income during the period of dismissal; or
- Pay you a sum of money as compensation.
Seeking assistance from the TADM
The TADM offers advisory and mediation services. It seeks to resolve employment or payment-related disputes involving employees not covered by the RRA, in an amicable manner, without the need to undergo legal proceedings. Appointments to consult a TADM advisor can be made online.
You can also find out the most suitable option for resolving your dispute through TADM by answering a few questions here. You will then be directed to the appropriate avenues to take up your matter accordingly and/or the amount you will be able to claim.
As an older employee, you should try to begin discussions with your employer about your re-employment as early as 6 months before you turn 62. This will allow you to better negotiate the terms of your re-employment contract to ensure they are fair and reasonable.
You can also take steps to better prepare yourself for re-employment by informing your employer about your job preferences as soon as possible. You should also be flexible in negotiating your re-employment arrangements and contractual terms, so that you can continue to be able to contribute to your organisation during your period of re-employment.
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