PAP: No need to retire at 62

Matthias Yao

Matthias Yao is the PAP Member of Parliament for Macpherson SMC. He is also the Deputy Speaker of Parliament and the Mayor for Southeast District CDC.

PAP MP Matthias Yao (Centre) with fellow PAP activists

PAP MP Matthias Yao (Centre) with fellow PAP activists

The Retirement Age Act may be the most misunderstood piece of legislation in Singapore.

Recently, I met an old friend at a dinner. We had not seen each other for many years, and the conversation turned naturally to how much older we have become. Soon, the subject of retirement was brought up.

My friend looked quite perturbed. I asked him what was bothering him. He replied: “You’re in the government, so please answer this question: Why must we have a law to make people retire at age 62? Those who are fit should be allowed to work for as long as they wish!”

His question did not surprise me. I have often heard this view expressed over the years.

I told him that there is no law requiring people to retire by a particular age. Of course there is, he insisted. The Retirement Age Act says that we have to do so when we reach 62.

I told my friend: “That’s not correct. Actually, the Act specifies the age below which employers are not allowed to retire their employees on account of age. It sets a lower limit, not an upper limit.”

He did not believe me at first. He also pointed out that, from his experience, most Singaporeans believe the Act works in the way he had stated. I offered to e-mail to him exactly what the law said the next day to prove the point. Seeing that I was so sure of the position, he said that if, indeed, that was what the Act said, then it is a good law.

He broke into a smile and remarked: “So the law does opposite to what I thought. It actually protects the workers from being forced to retire too early!”

As promised, I e-mailed him the exact wording of the law. This states that the minimum retirement age for employees is 62 years. No employer shall dismiss, on the grounds of age, any employee who is below the prescribed retirement age.

Any employer who contravenes this would be guilty of an offence and liable on conviction to a fine not exceeding $5,000, or to imprisonment for a term not exceeding six months, or to both.

He was fully convinced. He e-mailed me back to say that he did a small survey in his office among six of his colleagues, all highly-educated people holding senior positions. Five of them thought that the Retirement Age Act specified the age for compulsory retirement. Only one got it right.

In my work with trade unions, I have often heard the same thing before, though from a different angle: Workers would receive letters on their 62nd birthday telling them that they were being retired. When they requested to continue employment, they were often told by their HR departments that they were not allowed to be employed beyond 62, because the law said so.

It is hard to tell whether the employers really thought that was what the Act said or whether they were using it as a convenient excuse to avoid having to explain why they did not want to continue employing the workers. Whichever the case, it was reading the Act the wrong way.

The actual clauses in the law are well drafted and clear. They give the meaning intended. Companies cannot retire their employees before they reach 62. Companies also do not have to retire their employees when they reach 62. Why then is there this confusion?

Perhaps the reason for people’s view of what the Act stands for lies in the name of the Act itself. The title, “Retirement Age Act”, could lead them to presume that it specifies an age when employees must retire.

The Act will be amended to raise the prescribed retirement age to above 62, to give further protection to older workers. When that happens, I suggest we should give the Act a new name.

Perhaps a title like “Minimum Retirement Age for Employees Act”, reflecting exactly what the law says, may help to lessen the misunderstanding.


Photo courtesy of PAP MacPherson. This article was first published in the November/December 2010 edition of PETIR, a bi-monthly publication of the People’s Action Party (PAP).