Re-employment law will start latest by January 2012: minister
By Julia Ng, Channel NewsAsia | Posted: 24 August 2007 1731 hrs

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SINGAPORE : The Manpower Minister on Friday said the new law to ensure re-employment for workers retiring at 62 will start - at the latest - on 1 January 2012.

Dr Ng Eng Hen added that companies which are better prepared for the law will experience less disruption.

He noted that businesses have begun to take more seriously how they will employ and redeploy their staff.

This is good, as it shows that they realise the need to prepare early before legislation kicks in.

To give employers incentives to re-hire older workers, the increased Workfare Income Supplement (WIS), which offers higher payouts for workers aged above 55, will start immediately when the scheme kicks in next year.

Dr Ng also gave the assurance that the CPF changes, announced by Prime Minister Lee Hsien Loong last Sunday, will be put in place progressively to allow everyone time to adjust.

He said the Minimum Sum draw-down age will only be increased to 63 in 2012, while the draw-down age will be raised to 65 in 2018 - 11 years later.

Dr Ng expects that employment rates for older workers will have improved significantly by then.

Turning to compulsory annuities - dubbed "Longevity Insurance" - to give those who live beyond 85 years a steady income, Dr Ng said this will apply to those aged 50 and below today.

Again, the government will have time to study it thoroughly and will consult widely to understand the concerns of CPF members.

It will also seek industry experts' advice on how to devise efficient ways to stretch the premiums for this "Longevity Insurance".

The goal is to put aside only a small part of the Minimum Sum. The CPF member can still continue to draw-down most of it from the age of 65 to 85.

Dr Ng was speaking at the Retirement Ready @ My CPF Roadshow at Marina Square.

The portal (www.retirementready.sg) is the first-of-its kind online resource to help Singaporeans do their retirement planning.

Dr Ng said the CPF Board is looking into providing online calculators to help members gauge how much interest they will get under the new CPF interest rate structure. - CNA/ms