Prudential Singapore (Prudential) is the first financial institution here to scrap the official retirement age.
As life expectancy in Singapore continues to rise, Prudential is giving its employees the option to work beyond the statutory retirement age of 62. The move gives Prudential’s 1,100 employees the option to have extended careers, so they can fulfil their personal and financial aspirations.
Prudential Singapore’s CEO Wilf Blackburn said the company recognised that retirement at 62 may no longer make sense for an ageing population that has an average lifespan of 83.1 years and which is edging towards 100.
“If we stop work at 62, we are looking at nearly 40 years of retirement if we live to 100,” Blackburn said. “Such a long retirement period may pose financial challenges should you outlive your savings. A prolonged period of inactivity may also lead to health and social problems.
“With this in mind, we decided to scrap the retirement age so that our employees can continue to work in Prudential for as long as they are able to perform their jobs well. We want to empower them to decide when they want to retire, or if they wish to retire at all, rather than specify a work expiry date.”
The new retirement policy, which came into effect on 1 October 2018, was introduced on the back of the insurer’s Ready for 100 report which explores the readiness and aspirations of Singapore residents to live to 100.
The report revealed that one in two residents were not financially ready to live to 100. This is despite Singaporeans being ardent savers and having strong safety nets in the country’s Central Provident Fund (CPF).
Additionally, the report showed that most Singapore residents in fact do want to continue working. Only 4% of the 1,214 respondents surveyed indicated they want to retire as soon as possible, while 64% of the group aged 55 to 64 said they still enjoy their work.
Currently, Prudential has six employees aged 62 and above who are eligible for re-employment in the next five years. With the scrapping of the retirement age, they can stay on in their jobs and be entitled to the same benefits including medical, as all employees while drawing the same salary as before. They will still receive a retirement payout any time they choose to leave their jobs.
Prudential’s latest move to eliminate the retirement age is in line with Singapore’s ambition to leverage its rapidly-ageing workforce. In May this year, Manpower Minister Josephine Teo announced a new work group to address Singapore’s retirement and re-employment age and review the longer-term relevance of these policies.
“There is a lot that businesses can gain by tapping on the experience and knowledge of more mature employees,” Blackburn said.
“At Prudential, we see this group of employees as valuable assets and are committed to support them in extending their productive years by offering them re-skilling opportunities and flexible work schedules as we scrap the retirement age.”