Retirement and Re-employment (Amendment) Bill

Mr Deputy Speaker, Sir, I rise in support of both amendment Bills.

I would first like to start by affirming the efforts of MOM in introducing the Retirement and Re-employment (Amendment) Bill to prohibit dismissal of employees on the grounds of age by legislating the minimum retirement age at 65 and increasing the statutory limits for re-employment age from 67 to 70 years old.

Given Singapore’s demographic shifts towards an ageing population and the longer life expectancy of Singaporeans, it is inevitable that many of us will have to continue working for a longer period. According to MOM’s Comprehensive Labour Force Survey, as of 2020, 25.7% of our labour force is 55 and older. This is a 9.2% increase from a decade ago. As Singapore moves towards a more inclusive workforce that recognises the increased contributions of our older workers, I would like to make three clarifications to ensure that our older employees are safeguarded from unfair employment practices when offered re-employment.

Firstly, MOM released the Tripartite Guidelines on the Re-Employment of Older Employees, which took effect on 12 October 2020. On wage adjustment, the tripartite guidelines stated that "Upon re-employment, any wage adjustment should be based on reasonable factors, such as productivity, duties, responsibilities and wage system”. Although the tripartite guidelines allow for “the wages to be adjusted down to the level of a younger employee with the requisite experience and competency for the same job", I would like to clarify what are the safeguards in place to prevent employers from disincentivising older employees by overtly reducing their salary, knowing that they need to be re-employed. Continued employment may remain an important channel for older workers to meet their expenditure needs, especially the lower-income earners. Having contributed their years before retirement in an organisation and hoping to be valued for their contributions, older workers should not be expected to be short-changed in re-employment terms and benefits to continue their service with the employer.

Secondly, I understand the Bill has set forth in section 8A a conciliation process for employers who have re-employment disputes. I would like to clarify, to date, how many employees with re-employment disputes have been directed to an approved mediator for conciliation and how many of these conciliations are successful. I would also like to clarify what is the average timeline expected for such conciliation between employers and employees. It is important that the timeline for these conciliations be short, with amicable solutions reached by both parties, so as not to overtly bring hardship to employees seeking re-employment, especially those who require the job for their livelihood.

Third, one of the main eligibility criteria for re-employment set out in section 7, subsection(1)(b)(ii) of the Bill is that the employer will assess the employee as "being medically fit to continue working". With increased retirement age, there would be a proportional increase of those with multiple chronic diseases. The "Transitions in Health, Employment, Social Engagement and Intergenerational Transfers in Singapore" study showed that, in 2017, around 37% of respondents reported three or more chronic health conditions, up from 19.8% in a 2009 study.

Given the higher prevalence of chronic illnesses in an older workforce, I am concerned that irresponsible employers can use it to disadvantage older workers and justify not to offer re-employment on the grounds of medical fitness when they are having common chronic illnesses. Although subsection (2) of the Bill states that the employers have to prove on a balance of probabilities that the employee is not medically fit, I would like to clarify what are the safeguards to assure that chronic illnesses would not be used to unfairly disadvantage older workers from being regarded as medically fit.

Mr Deputy Speaker, I strongly believe the importance for our seniors to age gracefully and with dignity. Our seniors remain important contributors of our economy and society, sharing their wealth of experiences and valuable skillsets while mentoring younger employees. Thus, legislation is critical to prohibit dismissal on grounds of age and safeguarding their re-employment rights if they wish to continue with their employment. This amendment is an important step in sending out the right signals to the employers that diversity of age at work remains an important driver to increase productivity and allow their business to grow, especially when older employees possess subject-matter expertise and are observed to have lower turnover rates.

Now, on the Central Provident Fund (Amendment) Bill, since its inception in 1955 as a compulsory retirement savings programme, our CPF system has been the bedrock of our social security system, which ensures that the seniors can retire comfortably and be financially independent during their golden years.

I would like to raise three clarifications about the Bill relating to the disbursement of CPF monies, voluntary contributions to the MediSave account, and payment by the Public Trustee to beneficiary representatives.

Firstly, I understand that the amendment Bill will allow CPF Board to make automatic disbursements to members after being satisfied that the member is suffering from a "specified significant condition" by regulations made under the new section 77(1) of the amendment Bill. Currently, CPF Board already allows members to apply for withdrawals if they are certified to have a reduced life expectancy or severe medical conditions that cause members to be permanently unfit for work or lack mental capacity. I would like to clarify if there can be more specificity on how the "significant conditions" will be decided in the proposed amendment Bill to be adopted.

I have an encounter with one of my residents, Mdm A, who suffers from a rare and incurable disease characterised by progressive problems with movements and may shorten life expectancy. Mdm A approached me for assistance because she has been using her CPF monies to support her only son's studies, and as she is suffering from this medical condition, she hopes to appeal for the waiver of her son’s repayment. As a mother myself, I can fully understand the intention of Mdm A to support her son through his studies while she is able to, without expectation of repayment.

I would like to know whether the examples like the encounter I have mentioned will constitute as a "specified significant condition" and whether flexibility can be given to waiver of repayments under some of the CPF schemes, such as the CPF Education Loan Scheme, if the CPF member suffers from such "significant condition". In addition, can the Ministry also clarify if CPF Board will be conducting periodic reviews of the type of specified significant conditions, in order to keep up with newer medical conditions that would be eligible for such withdrawals?

Secondly, the amendment Bill proposed the removal of CPF annual limit for certain types of voluntary contributions to the MediSave account. This means that CPF members can make greater voluntary contributions to their MediSave account to prepare them for the "rainy days", where they may face the possibilities of medical emergencies and can use their MediSave to cover a significant portion of medical costs and hospitalisation bills.

However, I have also come across elderly residents in my constituency who are healthy and raised concerns over the underutilisation of their MediSave balance, requesting if their MediSave funds can be reallocated into their Retirement Account. It is understandable that individuals who have made excess voluntary contributions to their MediSave account during their productive work life, but do not have much health issues or incur much medical costs, would want to use that money for their retirement living expenses instead. Thus, I would like to clarify if after lifting the CPF annual limits for voluntary contributions made to the MediSave account, will CPF Board also allow CPF members to reallocate their additional voluntary contributions into other accounts, such as their Retirement Account (RA), if they so choose to in the future?

Lastly, the amendment Bill also provides for a new and simplified process for the distribution of un-nominated CPF monies by the Public Trustee on a member's death to a "beneficiary representative" for distribution to the beneficiaries, in accordance with the Intestate Succession Act or section 112 of the Administration of Muslim Law Act. It allows a beneficiary of the deceased member to apply to the Public Trustee to become a beneficiary representative.

Although the application will be subject to the approval of the Public Trustee, I am concerned that there is a lack of recourse if the beneficiary representative fails to exercise fairness in distribution of the CPF monies according to the Acts. I am also concerned that the beneficiary representative may unreasonably withhold the monies from some beneficiaries. Thus, I would like to seek clarification on: one, how the application process will be done to identify the beneficiary representative and two, how the Public Trustee intends to ensure that the welfare of the remaining beneficiaries will be taken care of.

Mr Speaker, with the expected increase in retirement age to 65 and re-employment age to 70 by the end of the decade, periodic review of the CPF system is crucial to ensure that the key pillar of our social security system is kept up-to-date. Notwithstanding my clarifications, I support the amendment Bills.