How many companies re-employ older workers?

Leong Sze Hian –

“The latest Ministry of Manpower survey on some 3,600 private sector establishments earlier this year found that only 2.8 per cent of the establishments with employees aged 60 and above” practise wage cuts for employees who reach the age of 60. (MOM)

The results of such a survey first and foremost would be dubious, for the following reasons:

How likely is it for an employer to say yes to a question asking whether they cut the wages of workers when they reach 60 years old, especially when such a question is asked by MOM?

Employers who have cut older workers’ wages even before they reach 60, may also simply answer no to the question.

Employers can also let older workers go even before they reach 60, as the employer is almost at liberty to do so using various reasons, so long as age was not given as the actual reason.

That aside, lets look at three simple yet contradicting set of numbers from three different parties with regards to the number of older workers whose wages are cut when they reach 60-years old.

As mentioned above, the MOM survey says “only 2.8 per cent” of private sector companies do so.

The NTUC’s estimate, however, puts the figure at about 80 per cent of unionised companies. (Asia One)

The Public Service Division says “a good majority do not get such a cut” – which could mean that as many as 49 per cent of these workers do see reductions in pay when they turn 60.

So, I am really quite confused, as the MOM says less than 3 per cent, NTUC said about 80 per cent, and the Public Service Commission said “a good majority”.

Perhaps what Singapore needs is an Equal Opportunities Commission like Hong Kong’s, which handled 20,852 enquiries and 1,230 complaints in 2009.

Cutting wages is but one aspect of the problems that older workers face. Another is re-employment when they reach their retirement age.

According to a Channel NewsAsia report, “15% of private companies with re-hire policy for staff at 62 didn’t offer re-employment.” (Channel News Asia, Jun 4)

Also: “15 per cent of private companies with re-employment policy did not offer to re-hire local employees when they reach 62.”

Since 15 per cent of companies with a re-employment policy said they had not offered to keep workers past 62 (“Most bosses keep workers beyond 62”, ST, Jun 5), how can these companies be classified as having a re-employment policy when no one was offered re-employment?

Also, 36.4 per cent of companies don’t even allow employees to work beyond 62, and four in ten of those that do offer re-employment did not even bother to consult workers approaching 62.

I was surprised that the top reason given by employers, at 81.3 per cent, given for why retirees were not offered a job when they reached retirement age, was: “No suitable job available”. Are employers saying that the job held by an employee when he or she reaches retirement age was not a “suitable” job in the first place?

As to the top reason, at 68.4 per cent, given for  why some companies have no re-employment policies, the reason was: “No worker nearing 62”. Is this not an indication that many employers don’t employ older workers?

Considering all the above, I think we may be overly optimistic and complacent by drawing the conclusion that the overall result of the report was that most bosses are convinced of the need to re-employ their workers.

With the current CPF Minimum Sum payout draw-down age already extended to 65 and CPF Life retaining the CPF Minimum Sum (currently $123,000) and the Medisave Required Amount (currently $22,500) at age 55, to pay a monthly life annuity from age 65, how will workers who are not offered comparable re-employment at age 62 survive, if they do have enough funds from 62 to 65?


Read Part One of this article: Even GLCs are cutting older workers’ pay?

Picture from Senior Aloud blog.