Retiring with dignity—speech by Jamus Lim

Delivered in Parliament on 1 November 2021

Mr Speaker, this latest set of amendments to the Retirement and Reemployment Act build on a number of positive amendments to the Act that were passed in 2017, which increased the reemployment age by two years to 67, and also strengthened the position of senior workers vis-à-vis their reemployment options, while also removing the option of employers to reduce their wages after the age of 60.

The amendments tabled this time propose to further raise the reemployment age to 70, while affording some additional modest protection for dismissals on the grounds of retirement age.

Our justification for raising the retirement age

This move follows the trend evident in many other advanced economies. Next year, the United States will raise the age where one is able to draw a full public pension or social security benefits—what is typically referred to as the full retirement age—to 67 for those born in 1960. France has sought, with limited success, to raise its retirement age of 62 by two years. Earlier this year, Japan raised its retirement age to 70, while Australia and Spain will gradually hike the retirement ages to 67 in the years ahead.

Since Singapore does not have a pay-as-you-go system, the usual justification for countries raising their retirement ages—to ensure that their state pension systems are able to remain financially viable in light of an aging and longer-living population—does not apply here. What is instead relevant is the legally-mandated age where one’s employer is able to request that you retire.

Hence, the relevant motivation for us to choosing to raise the retirement age is different: It is a recognition that the nature of jobs in the modern economy are often dramatically different from those of yesteryear. Most of the menial, backbreaking jobs of the past have now been substituted with machinery and technology. Accordingly, many jobs are now far less physically demanding, thereby permitting the modern worker to continue performing these jobs at a very high level, regardless of their age. Indeed, a number of hard and soft skills—such as technical, oral, or interpersonal skills—may, like fine wine, even improve with age.[1]

Moreover, many of the most sophisticated jobs in the modern economy often require an extended period of education and training, especially if they pursue graduate degrees or endure mid-career retraining and reskilling (this is, of course, coming from an overeducated individual who only completed his formal educational journey the year he turned 30). While such an extended period of human capital formation is both valuable and positions the worker well for their subsequent career, it also implies that they begin the formal employment journey later than usual. It seems unfair to cut their productive worklives short, just by dint of their extended education and training.

Finally, such a move would be consistent with the tsunami of demographic changes that will unfold over the course of the next decade. Singaporeans are living longer, and the number of those entering their sixties and seventies will also swell. By 2030, the number of Singaporeans aged 65 or older will number close to a million.[2] It is therefore imperative that we accommodate an extended work horizon, to allow these individuals to continue to participate in meaningful, productive activity, if they so wish. Such engagement can also positively impact their mental and physical health, and delay the onset of memory loss, depressive symptoms, and even physical disability.[3]

Abolishing the retirement age

Mr Speaker, if we may take the arguments I have made above to their logical conclusion, it would suggest the total abolition of any official retirement age. This is the official position of the Workers’ Party, and one reiterated in this House, most recently, by Associate Professor Daniel Goh, when he was an NCMP in the 13th Parliament.

To be clear, this is not a call for our workers to continue working themselves into the grave. Nor is it a call to postpone the official age of access to CPF savings, a point that I will return to later.

Rather, this call is a call to permit workers the freedom to continue to choose to work, at any advanced age, as long as they are able and willing to, and are able to secure a job.

This call should also be seen as an implicit call to remove discrimination in the workplace on the basis of age, a position that the Workers’ Party has likewise championed. With no clear retirement age, employers can no longer use the excuse that hiring a worker with a short runway before they are officially forced to retire would be an inferior business decision compared to hiring a younger worker with no such retirement constraint.

Indeed, there is evidence that antidiscrimination laws have been effective at boosting the employment of older workers.[4] To the extent that we subscribe to nondiscrimination at the workplace, then, the abolition of the retirement age is an essential complement to a richer set of legislative provisions to that effect.

One natural concern with such a proposal is that doing so could inhibit the renewal of the workforce, as the elderly take up jobs that could otherwise be filled with younger workers. Notwithstanding the fact that there are no legal impediments to replacing senior workers with junior ones—regardless of the retirement age—we should not rely on legal crutches to do what managers ought to be doing, which is to make the difficult decision of firing workers if necessary. If anything, the solution requires a realignment of cultural practices that keep unproductive workers in positions, rather than keeping an artificial legal retirement age in place.

Indeed, the economy where this issue is most chronic—Japan—does have an economywide retirement age. Clearly, its presence has not alleviated the problem of displacement, which suggests that the solution to excessive youth unemployment lies elsewhere.[5]

The other counterargument—which is almost the opposite of the first—is that a clear retirement age prevents frivolous firings, since employers cannot use the excuse that an employee is, generically speaking, too senior if they are 57 as opposed to 67. But this argument fails to hold up to theoretical scrutiny. Why would an employer wait for an underperforming employee to reach any level of seniority before they replace them? It would be more straightforward to simply grant such workers a severance package and release them, regardless of age.

Nor does this argument work in practice. I have many residents who approach me and share with me how they were indeed let go a number of years before retirement, and how they subsequently faced difficulty securing a job because employers deemed them too close to retirement. Hence, if anything, a fixed retirement age operates to the detriment of workers, and does not appear to have inhibited the retrenchment of workers.

Decoupling the CPF withdrawal age from the retirement age

What abolishing the retirement age emphatically does not mean, however, is that we should concomitantly raise our CPF payout eligibility age. Indeed, the Workers’ Party has also repeatedly called for the lowering of this age to 60.

This amounts to decoupling the retirement decision from the retirement savings decision, and I am heartened that Minister Tan has made this point clear in his speech, earlier. This is entirely reasonable. Singaporeans should be empowered to make their own, informed choices about the manner by which they wish to draw down on their hard-earned retirement savings.

Doing so also permits those nearing retirement to be more creative in the manner by which they balance their employment and retirement choices. For instance, a 60-year-old banker may wish to shift gears toward consultancy or adjunct teaching on a part-time basis, but nevertheless wish to supplement his or her income with a modest CPF payout.

This does not mean, of course, that we do not design incentives to encourage our seniors—especially if they remain in the workforce—to postpone their CPF withdrawals, to benefit from compound interest and thereby allow for larger payouts when they eventually make their withdrawals. Regardless, such delayed withdrawals should be a purely voluntary scheme; to my mind, nudges of this form are a far more palatable approach to encouraging individually-beneficial retirement choices.

Retiring with dignity

Taken together, Mr Speaker, these changes will permit our people to exercise far greater agency, individual self-responsibility, and freedom to choose their desired course of employment in their senior years, as well as weight their various retirement options in an informed and unconstrained manner. In other words, it will allow our people to retire, after a long struggle, with dignity. That is surely something that all in this House would wish for those that have blazed the trail before us.

I support this Bill.

[1] Sim, Nicholas (2019), “Is the Retirement Age Still Necessary?”, Singapore: Singapore University of the Social Sciences.

[2] Source:

[3] Wickrama, K.A.S., C.W. O’Neal, K.H. Kwag & T.K. Lee (2013), “Is Working Later in Life Good or Bad for Health? An Investigation of Multiple Health Outcomes,” Journal fo Gerontology B 68(5):807 – 815.

[4] Neumark, D. (2020), “Strengthen Age Discrimination Protections to Help Confront the Challenge of Population Aging,” Brookings Economic Studies Report, Washington, DC: Brookings Institution.

[5] For more on this diagnosis, see Genda, Y. (2003), “Who Really Lost Jobs in Japan? Youth Unemployment in an Aging Society,” in S. Ogura, T. Tachibanki & D.A.. Wise (eds.), Labor Markets and Firm Benefit Policies in Japan and the United States, Chicago: University of Chicago Press, pp. 103–33.