In a move to address the challenges posed by an ageing population, the National Trades Union Congress (NTUC) in Singapore has brought forward changes to the country’s retirement and re-employment policies. These adjustments, which will take effect in 2026, aim to provide individuals with more time to save and prepare for their financial future while continuing to contribute to the workforce.
Key Changes to Retirement and Re-employment Age
The upcoming changes to retirement and re-employment ages in Singapore are designed to support the nation’s ageing population. These reforms will give individuals more opportunities to continue working, earn an income, and increase their retirement savings. Key changes include:
- Retirement Age Increase: From 62 to 65 by 2030.
- Re-employment Age Increase: From 67 to 70 by 2030.
These adjustments, which come 1½ years ahead of the national schedule, will ensure that workers can continue working longer, contributing to their CPF accounts and building financial security before fully retiring.
CPF Contribution Rates: What’s Changing?
Along with the retirement and re-employment age changes, Singapore will also see an increase in CPF contribution rates starting in 2026. These updates aim to bolster retirement savings for older workers. The new contribution rates will be phased in gradually and apply to workers aged 55 and above. The adjusted contribution rates are as follows:
- Age 55 to 60: 37% (up from 26%)
- Age 60 to 65: 26% (up from 16.5%)
- Age 65 to 70: 16.5% (up from 12.5%)
These increases will help workers save more for retirement and provide greater financial stability as they age.
Transition to Higher Contribution Rates
Employers in Singapore will need to adjust to the increased CPF contribution rates, which could lead to higher wage expenses for businesses. To assist employers in managing these changes, the government has introduced several support measures. These include wage offsets and grants to help offset the costs of higher CPF contributions, particularly for businesses that rely on older workers.
Employers should begin preparing for the changes by reassessing their workforce strategies, updating HR policies, and ensuring compliance with the new rules when they take effect in 2026.
Government Support for Employers
To ease the transition for businesses and encourage the employment of older workers, the Singapore government is offering several support programs. These initiatives are designed to make it easier for employers to hire senior workers and offer flexible working arrangements. Two notable programs are:
- Part-time Re-employment Grant (PTRG): This grant supports businesses that offer part-time or flexible work options to senior workers aged 60 and above. Employers can receive up to S$125,000, with S$2,500 for each eligible worker.
- Senior Employment Credit (SEC): The SEC provides wage subsidies to employers hiring senior workers. The subsidy covers up to 7% of the worker’s wage, depending on the worker’s age and salary.
These programs help businesses manage the higher costs of CPF contributions while encouraging the employment of senior workers.
Why Do These Changes Matter?
As Singapore’s population ages, supporting older workers in the labour force becomes increasingly important. These policy changes aim to provide older individuals with more opportunities to stay employed, reducing the dependency ratio and easing economic pressures caused by an ageing population.
By allowing older workers to remain employed longer, they can continue contributing their skills and experience to the economy, which can enhance workplace culture and productivity. These changes are crucial in ensuring financial security for senior citizens while addressing the evolving needs of the workforce.
