RETIREMENT AGE ACT (Impact on older workers)

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RETIREMENT AGE ACT:

(Impact on older workers): 11.

Mdm Halimah Yacob asked the Minister for Manpower (a) what is the Ministry's assessment of the impact of the Retirement Age Act on the employment of older workers; (b) have there been any studies done to establish whether there is a positive or negative link between the extension of the legal retirement age and employers' recruitment and employment policies pertaining to older workers; (c) how many older workers have benefitted from the extension of the legal retirement age from 60 to 62; and (d) has the Ministry received any complaints of violations of the Retirement Age Act and how were these resolved.

The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi) (for the Minister for Manpower): Sir, the Member asked if raising the retirement age has had any impact on the employment of older workers. To address the Member's specific query, let me first describe the changes observed for the labour force participation rate (LFPR) for older residents.

The labour force participation rate of older workers aged 55 and above has increased and shown an upward trend since 1993, when the Retirement Age Act was extended. The increase was greater for females than for males. Let me ask the Clerk of Parliament to distribute some

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tables to Members. Sir, for females, the labour force participation rate has also increased for younger cohorts so the reasons for increases are more likely to be due to improving educational and changing societal norms. Against this underlying uptrend, the impact of extending the retirement age is harder to isolate for females.

For males, a smaller increase was noted for those aged 55 to 59. Prior to 1993, the rate hovered around 71% but increased to 77% in 1996. In 2004, it was 78%. LFPR increases for those aged 60 to 64 have been smaller for both sexes.

MOM's assessment is that extending the retirement age had some effects on the LFPR for older males, but the increases were limited. Thus, legislation itself would not be sufficient in raising the participation rate of older workers. Indeed, if other issues related to employability of older workers are not addressed holistically, the re-employment rate of older workers may worsen as employers may be fearful of keeping such employees till retirement. We therefore need to examine other fundamental issues related to their employment and employability, including the mindsets of both employers and older workers themselves; cost considerations related to remuneration and benefits; job opportunities and work processes. The Tripartite Committee on Employability of Older Workers is currently studying how to enhance the employability of older workers.

Since the introduction of the RAA in 1993, MOM has received an average of five complaints a year, alleging unlawful dismissals on ground of age. We have investigated all these allegations and complaints. Most of the cases were resolved amicably through conciliation, with some cases being withdrawn as their claims were unsubstantiated. Over the 12 years since the RAA was established,

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there has been only one case in which an order for compensation by the employer was made, and another case where the company was ordered to reinstate the worker.