By Ms Kala Anandarajah and Mr Ajinkya M Tulpule

Overview

On 11 January 2011 the Parliament of Singapore passed the Retirement Age (Amendment) Bill. Once the Bill comes into force the current Retirement Age Act (Cap 274A) will be renamed the Retirement and Re-employment Age Act (the 'Act'). In addition to reflecting the wider scope of the amended Act, the new title also alludes to the primary aim behind the amendment, which as explained by Mr Gan Kim Yong during the Second Reading is to enhance 'financial security in old age' and to allow Singapore's ageing population to 'remain active while making valuable contributions to their organisations'.

Brief Outline Of The Amendments

The Act applies to employees who attain the age of 62 years on or after 1 January 2012, and who decide to continue working beyond their retirement age. In such cases, the Act requires the employer to offer re-employment to an ageing employee if the employee meets certain criteria. This obligation to re-employ continues until the employee reaches the age of 67 years.

If such re-employment is in fact offered, the employer is permitted to vary the terms of employment for that employee which may include a variation of the employee's job scope and salary so long as such variations are based on reasonable factors. However, if re-employment is not offered, employer is then required to make an Employment Assistance Payment ('EAP') to the employee. The Act provides guidance on how best to determine the EAP amount.

The Act also contains other amendments that will have an impact on the employer-employee relationship post retirement. For a more in-depth commentary on the provisions of the amended Act please refer to our client update titled 'Old Is Gold: Singapore Provides For Employees Post Retirement Age' by clicking the link below:

Old Is Gold: Singapore Provides For Employees Post Retirement Age

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.