The Government will raise the ages of retirement and re-employment for Singaporeans up to 65 and 70 respectively by 2030, said Prime Minister Lee Hsien Loong.
Speaking at the National Day Rally at ITE College Central in Ang Mo Kio on Sun (18 Aug), Mr Lee said that the age thresholds will be gradually raised – the retirement age will be raised from the present 62 to 63 in 2022, before being lifted to 65 by 2030.
The re-employment age, he added, will be increased from the current 67 to 68 in around three years from now, and will “eventually” be raised to 70 by 2030.
Calling it a “sensible” proposal, Mr Lee said that the decision was made following meetings with the Tripartite Workgroup for Older Workers, a workgroup set up by the Ministry of Manpower (MOM), in a bid to “support older workers and the businesses that employ them”.
“Last year, the Ministry of Manpower, MOM, set up a Tripartite Workgroup on Older Workers to study the issue. I met the Workgroup members last month for lunch. They told me they had had intense discussions. Even at lunch, the discussion was quite intense. Why? Older workers wanted to be certain of continued employment for longer. When can I retire later? Can I be reemployed longer? Can I be reemployed more years at a time?
“But employers were worried about business costs and the uncertain economic outlook, and they said “I support you, I understand your aspirations, but I need more flexibility. Because I do not know what will happen. If I go broke, your job is gone too.” In the end the Workgroup reached consensus,” he said.
“Most seniors in fact do not want to stop working,” he said, adding that the changes introduced by the Government “will support older workers to continue working longer and to be more financially independent”.
Mr Lee assured that the Government will “implement a support package” for elderly Singaporeans returning to the workforce, which will be announced by Deputy Prime Minister and Finance Minister Heng Swee Keat in next year’s Budget.
“As a major employer ourselves, the Government will take the lead for public officers. The Public Service will raise its retirement and re-employment ages one year earlier – in 2021 instead of 2022,” he said, while calling upon private sector companies that are able to do the same to do so too.
Mr Lee also said that the Government will increase CPF contribution rates for older workers starting 2021, and will not amend the current CPF withdrawal policies or minimum age threshold.
“Today, CPF contribution rates for workers begin to taper down after the workers turn 55. We will raise the rates for workers above 55. We will take the first step in 2021. And we will take subsequent steps after that.
“The whole process will take 10 years or so, about there, but it depends on economic conditions. By the time we are done, those 60 and below will enjoy the full CPF rates. The CPF rates will only begin to taper down after 60, and level off after 70. So this is the first change – to increase CPF for older workers gradually over the next 10 years or so.
“To be absolutely clear: we are not making any changes to CPF withdrawal policies or CPF withdrawal ages. You can still take out some money at age 55. And you can still start your CPF payouts from age 65. All that remains exactly the same. So please ignore any rumours you may hear about this, or messages on WhatsApp, because they are fake news!” said Mr Lee.
The Institute of Policy Studies recently released a report calling for CPF contribution rate for older workers starting from ages 55 to be restored from 26 per cent to the same levels as younger workers at 37 per cent. The current CPF contribution rate for workers aged 60 to 65 is 16.5 per cent, while the rate for those older than 65 is 12.5 per cent. The report’s suggestion includes increasing those to 37 per cent as well.
When asked if such proposals to increase the CPF contribution rates are feasible through negotiations and discussions, NTUC Secretary-General Ng Chee Meng in an interview with CNA938 last Thu (15 Aug) simply noted that the CPF rates are a subtopic for the tripartite work group and that there would be a formal report “sometime soon”.
Manpower Minister Josephine Teo said in Jun this year in relation to raising the ages of retirement and re-employment that she was “encouraged” by statistics on rising life expectancy among Singaporeans.
Citing a Lianhe Zaobao report, which noted that the healthy life expectancy of Singaporeans rose 7.2 years to 74.2 years in the last 27 years, while life expectancy rose 8.7 years to 84.8 years, Mrs Teo said that the statistics indicate that Singaporeans are generally in “good health”.
“People living longer and generally healthier lives is a key reason that they work longer – this is a trend that we observed across many developed countries,” she added.
The retirement age was last raised in 1999 from 60 to 62, while the re-employment age was raised from 65 to 67 two years ago.
Alumni and community should “contribute generously”; institutions should set up more bursaries to supplement govt ones: PM Lee, on higher education bursaries for lower-income students
Touching on the costs of public education in his speech on Sun, Mr Lee also called upon alumni of higher institutions such as universities, polytechnics and ITE – as well as the community in general – to “contribute generously” to higher education bursaries in an effort to supplement government bursaries for lower-income students.
“The Government will match your donations, up to 3 times for the newer universities, and up to 1.5 times for the rest. Our institutions often raise funds for new buildings and professorships, and this is always meritorious. But bursaries can make a crucial difference to the recipients – and they have the extra human touch,” he highlighted.
Noting that bursaries are often named in honour of notable names or entities, Mr Lee also encouraged higher education institutions in Singapore to “set up more bursaries of their own, in people’s names”, as “they have the extra human touch”.
“These bursaries often have names associated with them, like the E.W. Barker Bursary in NUS named after our founding Law Minister, or the Class of 1995 Term Bursary in NTU. The Class of 1995, that means the graduating class of 1995, must have come together and raised some money, endowed a bursary, to remind the next generation that when it comes to your turn to, go thou and do likewise.
“This personalises the bursary award. The recipient is grateful to the donor, the donor is happy to have done a good deed, and both donor and recipient honour the person after whom the bursary is named. And in time, hopefully the recipient will make good, remember, and be moved to pay it forward.
Narrating the story of Lu Yi, a recipient of the Kwa Geok Choo Bursary, who wrote to Mr Lee to thank him for his contribution to the bursary fund, Mr Lee said: “We try very hard to kindle the same warm personal feeling with Government bursaries, but alas, it is not so easy to write a letter like that to say “Dear Government, thank you very much”. So to complement the Government bursaries, I hope the universities, polytechnics and ITE will set up more bursaries of their own, in people’s names.”
The Kwa Geok Choo Bursary was set up by the NUS Law School in honour of Mr Lee’s mother, who was a lawyer.
“If you donate towards a bursary, you enable some promising young person to get a good start in life. This strengthens our sense of obligation to each other, and the bonds that link us all together as one society,” said Mr Lee.
MOE to reduce annual fees for full-time degree courses in SIT and SUSS by S$500, increase govt bursaries up to 75 per cent for general degree programmes in all publicly funded higher institutions: PM Lee
Mr Lee added in his National Day Rally speech this year that the Government will lower the annual fees for “full-time general degree programmes” in the Singapore Institute of Technology (SIT) and SUSS (Singapore University of Social Sciences) from the current approximate of S$8,000 to S$7,500.
The Government, he said, will also “significantly” increase government bursaries from up to 50 per cent of general degree fees today to up to 75 per cent.
“For a general degree programme in NUS like Economics or Computer Science, full fees are about S$8,000 a year. Currently, a lower income student would pay around half that – S$4,000 a year – if he uses his bursary fully to his fees. With the enhanced bursary, he would pay only S$2,000 per year.
“Similarly, for polytechnic diploma programmes, we will increase the bursary coverage from up to 80 per cent of the fees today, to up to 95 per cent. For polytechnic diploma, full fees are now S$3,000. With a bursary, a lower income poly student currently pays about S$600 a year. After we enhance the bursary, he will pay only S$150,” Mr Lee illustrated.
Noting that 6 in 10 students in Singapore’s polytechnics and universities are eligible for government bursaries, he said that the increased bursaries and lowered fees will not only benefit lower-income students, but will serve “many middle income students too”.
“Students in Government-funded diploma and degree programmes at ITE, NAFA, and LASALLE will also be covered,” noted Mr Lee.
Bursaries for students taking up Medicine in particular will be “significantly more generous” than those for other courses, as the course “has the highest course fees of all the university courses”, said Mr Lee.
“Today, after Government subsidies, medical school fees are almost S$29,000 a year at NUS, and S$35,000 a year at NTU. These are not small amounts.
“We should not let the cost of medical school deter good students from studying medicine. In fact, we want doctors to have diverse educational and family backgrounds. On the educational front, recent medical school intakes have included more polytechnic graduates, and this year, we had one ITE graduate for the first time, in NUS medical school. But on the socio-economic front, we should do more to encourage lower income students to do medicine.
“Therefore, we will enhance government bursaries for medical school, to make them significantly more generous than bursaries for other courses. If you add together other bursaries from the university, then lower income students will now pay at most $5,000 per year to study Medicine. This balance can be covered by student loans with much less difficulty.
“So, if you are a student and you are worried about your finances and you have an ambition to be a doctor, I say do not worry about the money. That will be taken care of. Go for it,” said Mr Lee.
The changes in fees and bursaries, he said, will apply to both existing and new students, starting the next academic year.
Extend income threshold for means-tested subsidies for middle-income parents, KidSTART initiative for preschoolers from lower-income families: PM Lee, on govt efforts to reduce public early childhood education costs
More middle-income Singaporean parents can also expect to receive subsidies for their preschoolers, as the Government will increase the current maximum monthly income threshold from S$7,500 to S$12,000, said Mr Lee.
The raised income ceiling will cover around 30,000 more households, he noted, adding that the Government will also increase the quantum of preschool subsidies “across the board”.
“We should have good quality, government-supported choices available to all Singaporeans. This is in fact our policy. Today, just over half of all pre-school places are government-supported. Over time, we will bring this up to 80 per cent, just like HDB and we are putting a lot of resources towards this.
“Already, the Government spends about S$1 billion a year on early childhood education, and this will more than double over the next few years. Hopefully with all these improvements, parents will no longer think of preschools as an expensive phase of bringing up their children,” said Mr Lee.
The KidSTART initiative, introduced in 2016 to assist children from “less privileged families”, will be expanded to reach an additional 5,000 children in the next three years, said Mr Lee. Currently, 1,000 children are placed under the programme.
“The KidSTART team advises and supports the parents, often a single parent – on nutrition, child development, and parent-child interaction. We are very happy with the results, and so are the parents … We still need to follow up for a few more years, to assess more exactly its benefits.
“But for each new cohort of babies, there is no time to lose. So we will expand KidSTART to reach another 5,000 children over the next three years. Then we will take stock again how to expand KidSTART further,” he said.