Retirement & Re-employment guide for employers in Singapore
Transitioning from active employment to retirement can be a significant career milestone. This guide will explore the intricacies of retirement and re-employment in Singapore, providing valuable insights into the legal framework, eligibility criteria, and the rights and obligations of both parties. Whether you are nearing retirement or planning for the re-employment of senior staff, this guide aims to equip you with the knowledge and resources necessary to make informed decisions and facilitate a smooth transition.
What is the minimum retirement age in Singapore?
According to the Retirement and Re-employment Act (RRA), the minimum retirement age is 63 years. Employers are not allowed to dismiss any employee before that age.
Employees have this protection if they:
Are a Singapore citizen or Singapore permanent resident.
Joined their employer before they turned 55.
Can senior employees continue to work after reaching their minimum retirement age?
From 1 July 2022, employees who turn 63 can continue to work in the organisation until they reach the age of 68, if they meet the eligibility criteria for re-employment. This benefits older workers who wish to continue working as long as they are willing and able.
The new retirement and re-employment ages are as follows:
Age
Retirement age
Re-employment age
Born before 1 July 1955(>67 years old on 1 July 2022)
62
67
Born between 1 July 1955 and 30 June 1960(between 62-67 years old on 1 July 2022)
62
68
Born after 1 July 1960(<62 years old on 1 July 2022)
63
68
What are the eligibility criteria for re-employing senior employees?
Employees are eligible for re-employment if they:
Are a Singapore citizen or Singapore permanent resident.
Have served their current employer for at least 2 years before turning 63 for employees hired at age 55 and above.
Have satisfactory work performance, as assessed by the employer.
Are medically fit to continue working.
Who is exempt from re-employment?
Several types of employees are exempt from re-employment. They include:
Public officers in:
Police Service
Prisons Service
Narcotics Service
Civil Defence Service
Corrupt Practices Investigation (Junior) Service
Corrupt Practices Investigation (Senior) Service
Persons enlisted for regular service in the Singapore Armed Forces.
Auxiliary police officers.
Public officers and statutory board employees eligible for benefits under the Pensions Act.
Cabin crew on board commercial aircraft.
Employees working 20 hours per week or less.
Employees on fixed term contracts for specific projects, where the expectation is that employment will cease when the project ends.
Employees who were first employed after age 55 and have served the company for less than 2 years.
How long does the re-employment contract last?
The re-employment contract should be at least 1 year long and renewable annually until the age of 68. The first initial contract for re-employment should begin the same day the employee turns 63 years old.
For example:
If the employee turns 63 on 1 August 2024, his/her re-employment contract’s initial start date should be 1 August 2024.
Can employers allow their employees to work after retirement age while offering a new re-employment contract a few months later?
Yes, if employers don’t offer re-employment to their employees when they reach retirement age, they can still offer them a formal contract at a later date.
What are some tips for negotiating a re-employment contract?
Consider the following points when negotiating the terms of a re-employment contract.
For employers:
Determine which employees are eligible for re-employment.
Begin discussions as early as 6 months before your employee turns 63.
Offer a re-employment contract to eligible employees at least 3 months before they retire.
Employees who do not qualify should be notified as soon as possible so that they can better plan for retirement or pursue other employment opportunities.
Any wage reductions made when the employee turned 60
For example:
If an employee's current salary ranges from $1,500 to $2,500 and he/she is approaching retirement age at the top of the salary range, the employer can offer re-employment at the midpoint of the range, $2,000.
These principles can be adapted depending on the circumstances. Employers should consult with employees and unions (if applicable) to reach fair and mutually beneficial agreements.
What if the employer is unable to offer re-employment opportunities to eligible employees?
If employees are eligible for re-employment but their employer is unable to offer them a position, the employer must:
Transfer the re-employment obligation to another employer, with the employee's agreement, OR
Offer the employee a one-time Employment Assistance Payment (EAP).
Transfer the re-employment obligation to another employer
Transferring re-employment obligations to another employer should meet the following two conditions:
The new employer must agree to take over the existing re-employment obligations of employees from their current employer, AND
The employee must accept the new employer's re-employment offer.
Employees are not required to accept a re-employment offer from the new employer and will be entitled to an Employment Assistance Payment (EAP) from their current employer if they decline the offer.
Offer a one-time Employment Assistance Payment (EAP)
If the employer has considered all available re-employment options within the organisation and is still unable to identify a suitable job for eligible employees, the company may offer an Employment Assistance Payment (EAP).
The EAP is:
Offered only after a thorough review, as a last resort.
Meant to help employees tide over a period of time while they seek alternative employment.
A one-off payment equivalent to 3.5 months’ salary, subject to a minimum of $6,250 and maximum of $14,750.
Note:
For employees who have been re-employed for at least 30 months since age 63, a lower EAP amount of 2 months of salary could be considered, subject to a minimum of $4,000 and maximum of $8,500.
In addition to the EAP, employers are encouraged to provide outplacement assistance to help employees find alternative employment.
Is there any funding support for employing senior workers?
The Senior Employment Credit (SEC) provides wage offsets to help Singaporean employers adjust to the higher Retirement Age and Re-employment Age. Older age groups will receive more support.
For 2023-2025, the wage offset is applicable to Singaporean workers aged 60 and up who earn up to $4,000 per month. Employers will receive up to 8% of wages paid to eligible workers between 1 Jan 2023 and 31 Dec 2025, depending on their age and wage.
Tip: Learn more about Senior Employment Credit (SEC) eligibility and get answers to frequently asked questions in our guide.
Are senior workers still subject to CPF contributions?
From 1 January 2025, the CPF contribution rates for employees aged above 55 to 65 will be increased to strengthen their retirement adequacy. The changes apply to wages earned as of 1 January 2025:
Employee's age (years)
2024
CPF Contribution Rates from 1 Jan 2025(For employees earning monthly wages exceeding $750)
Total(% of wage)
Total (% of wage)
By employer(% of wage)
By employee(% of wage)
55 and below
37
37
17
20
Above 55 to 60
31
32.5(+1.5)
15.5(+0.5)
17(+1)
Above 60 to 65
22
23.5(+1.5)
12(+0.5)
11.5(+1)
Above 65 to 70
16.5
16.5
9
7.5
Above 70
12.5
12.5
7.5
5
Note:
a) With the closure of the Special Account, any increase in CPF contributions for employees aged 55 to 65 will be fully allocated to the Retirement Account (RA), up to the Full Retirement Sum (FRS), allowing senior workers to save more for retirement. If employees have set aside the FRS in their RA, the contributions will be directed to their Ordinary Account.
b) For those earning more than $500 to $750 per month, employee contribution rates are still being phased in.
c) There are no changes to the graduated contribution rates for first and second-year Singapore Permanent Residents.
How to better support senior employees who are approaching retirement age?
Higher internal retirement and re-employment ages than statutory requirements
Employers are encouraged to raise their internal retirement and re-employment ages above the statutory requirements. These ages should be clearly stated in all relevant employment documents. Employers should also include channels through which their employees can seek assistance if there are disagreements.
Structured career planning
As an employer, you are encouraged to take a proactive approach to guiding your employees' career development, including the implementation of structured career planning for employees aged 45 and older.
The Structured Career Planning Guidebook developed by the Singapore National Employers Federation provides resources to help employers have regular career conversations with their employees. Employers will gain a better understanding of their employees' long-term goals and areas for development. As a result, employees can gain confidence in planning their careers, improving their skills, and preparing for career changes, re-employment, and retirement.
Job redesign
Employers should make it easier for older workers to re-enter the workforce by creating more age-friendly workplaces. You are encouraged to use job redesign to make organisational and system-level changes. This will increase the number of older workers who can perform the job, as well as the age at which your employees can do it.
Medical benefits
As an employer, you should consider restructuring existing medical benefits and offering additional MediSave contributions or other flexible benefits. These can be used to pay your employee's MediShield Life or Integrated Shield Plan premiums (as applicable).
This helps you manage healthcare costs by providing stability and predictability, as well as creating Medisave Accounts and accruing medical benefits for your employees after they leave the company.
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