Retirement and Re-employment Practices

Majority of establishments keep workers beyond the age of 62

1. Nearly two-thirds of private establishments allowed their local employees to work beyond 62 and a large majority of local employees who reached 62 in 2009 stayed on. These are the key findings from a survey conducted by the Ministry of Manpower (MOM) on a sample of 3,200 private establishments (each with at least 25 employees) employing over 800,000 employees.
   

   Main Findings

2. Nearly two-thirds (64%) of private establishments reported that they have implemented measures to allow their local employees to work beyond the statutory retirement age of 62 by allowing them to continue working on existing contracts (48%) or by offering re-employment (18%), with the former being more popular among smaller establishments*. Altogether, nearly eight in ten (77%) private sector local employees worked in establishments that reportedly offered their local employees opportunities to work beyond 62.
3. While 36% of private establishments had not implemented any measure for their local employees to work beyond the age of 62, they employed only 22% of local employees. Around two thirds (68%) of these establishments indicated that this was because none of their local employees had approached 62. About one quarter (26%) had not thought about the issue, while one in eight (12%) did not see a need to do so. A small minority (6.6%) indicated their intention to devise a plan in the next one to three years to allow local employees to work beyond 62.
4. Among the private establishments which offered re-employment, seven in ten (72%) indicated that the local employees could be redeployed to a different job upon re-employment. These establishments accounted for eight in ten (81%) local employees in establishments offering re-employment.
5. The most common duration of re-employment contract was at least one year. However, almost all (96%) private establishments offering re-employment reported that the contracts were renewable. Eight in ten (80%) of these establishments indicated that there was no maximum age to which the re-employment contract can be renewed. Similarly, about nine in ten (93%) private establishments which allowed local employees to continue working beyond age 62 reported that there was no maximum age to the extension of employment.
6. Only 15% of private establishments with re-employment policy reported that they had not offered re-employment to local employees who reached 62 and who have met the work performance criterion for re-employment. The most common reason for this was the lack of suitable jobs (81%), followed by employees indicating that they did not want to continue working beyond the age of 62 (66%). The need for leadership renewal (18%) was not a major consideration. Other reasons given were related to employees' personal characteristics, namely poor work attitude (41%), inability to keep up with changes (31%) and poor working relationships with colleagues (17%).
7. Only four in ten (41%) private establishments offering re-employment would involve local employees who were approaching 62 in re-employment consultation. Slightly over half (54%) of these establishments would conduct the consultation at least six months before the employees turn 62. A similar proportion (44%) of private establishments offering re-employment would counsel local employees approaching 62 who did not meet the work performance criteria for re-employment. 56% of these establishments conducted the session at least six months before the employees reach 62.
8. Three in ten (30%) private establishments surveyed had local employees who reached the age of 62 during the year ending June 2009, involving some 9,400 local employees. The vast majority (92%) of them were allowed to work beyond the age of 62. This comprised 62% who were allowed to continue working beyond 62 and 30% who were offered re-employment, mostly in the same job. Nearly all (94% or 8,150) of those offered employment beyond 62 accepted the offer. Only a minority rejected the offer (4.9%) or were still considering the offer (0.7%) at the time of the survey.
9. The report is available online on MOM's website.