Saturday, October 29, 2005

NTUC hit the right note on retirement age.

October 29, 2005
Raising retirement age may backfire.

WHILE it is pushing for people to work as long as they can, the labour movement does not endorse raising the official retirement age as it may backfire and create other problems, said National Trades Union Congress' deputy secretary-general Lim Swee Say (picture).

"Raising the official retirement age from 62 to 'sixty-X' number of years would appear to be an easy solution; just get it implemented and workers can all work longer. But in the labour movement, we don't think so," said Mr Lim.

He was speaking to some 700 employers at the Singapore National Employers Federation Employer-Delegates Conference on Friday.

Forcing companies to continue employing their older workers through legislation would not work, he said.

It is not a coincidence that today, workers in their fifties are three to four times more likely to be retrenched than the younger ones, he added. So if the Government were to raise the official retirement age unilaterally, it will create other problems.

During his keynote address, Mr Lim pointed out that the trend, increasingly, is for companies to source for the cheapest labour, compromising on quality. Mr Lim said: "In the services sector, outsourcing has degenerated into cheap sourcing. Instead of engaging in a race-to-the-top by sourcing for the best, they are now engaging in a race-to-the-bottom by sourcing for the cheapest manpower."

To tackle this, the NTUC is working on an initiative called the "Best Sourcing Initiative", an exercise that aims to encourage buyers and suppliers of services to upgrade their service quality by better sourcing.

Mr Lim said that the best sourcing initiative is not to increase costs for companies, but to professionalise the various job industries so that the buyers pay the right price to get the best service possible.

Meanwhile, the labour movement said it was willing to hear the Manpower Ministry's counter-proposal of exempting low-wage workers from Central Provident Fund contributions. NTUC had made this recommendation to the Ministerial Committee on Low Wage Workers, but Manpower Minister Ng Eng Hen did not agree as it will eat into workers' retirement income.

While it is good that the govt had finally acknowledge the fact the increasing retirement age could backfire, I wondered why it too them so long to do that when all indications show that the effective retirement age for Singaporeans is much lower than the official retirement age.

Increasing official retirement would only cause more undue hardships on the people, as the CPF withdrawal age would most probably be increased together. Since the effective retirement age is lower than the official one, this would mean that many people would be denied of their CPF money for a longer period of time when they need it.

1 Comments:

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