Retirement & Re-employment Act (RRA): Good for Seniors?

First, the good news. If you are employed with a company before turning 55, and you are a Singapore citizen or PR, you enjoy protection under the RRA law. Your company cannot ask you to retire before the minimum retirement age of 62.

The RRA also provides a provision for those who retire at 62 to be re-employed. To enjoy the re-employment benefit, you must meet the following criteria:

  • Are a Singapore citizen or Singapore permanent resident.
  • Have served your current employer for at least 3 years before turning 62.
  • Have satisfactory work performance, as assessed by the employer.
  • Are medically fit to continue working.
  • Are born on or after 1 July 1952.

Your employer can meet their obligations under the law by offering you the minimum contract for re-employment of 12-months and your employer may adjust your salary subject to your new duties and responsibilities. Your re-employment contract is renewable every year up to age 67. In principle, the law does not mandate the re-contract salary, changes in your duties nor the length of the contract — but leave it to the employer to negotiate a mutually acceptable agreement with you.

What if your employer is unable or unwilling to re-contract with you after 62? Your employer as two options:

  • Transfer the re-employment obligation to another employer, with your agreement — meaning that it must be on mutually agreeable terms. If you accept this transfer, your original employer will be free of the re-contracting obligation.
  • As a last resort and only after thorough review, your employer can offer you a one-time payoff equivalent to 3.5 months’ salary, subject to a minimum of $5,500 and maximum of $13,000.

As an employee, what recourse do you have if you fail to reach an agreement with your employer? Under the RRA, you have the right to appeal to Labour Relations and Workplaces Division of the Ministry of Manpower. Remember that you only have 30 days after the last day of your employment to exercise this appeal or you may forfeit that right.

As Singaporeans are fortunate enough to enjoy one of the highest healthy adjusted life expectancy or HALE, it means that we are not only living longer but we remain healthier longer as well. And it makes no sense for society to encourage retirement when you can still possible contribute to the economy and society for several decades more. The ability to work longer not only helps ageing seniors be more engaged, but it is also proven to be good for your mental and physical health. Also, additional earnings will be important to many to maintain a decent quality of life financially when they finally do retire – especially in Singapore where the cost of living is also one of the highest in the world! Overall, I believe this is a step in the right direction but I am sure the RRA will need to be reviewed every few years as we have more data available on our ageing workforce.

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