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No more pay cut at 60 for civil servants
Practice will be stopped from July, in view of new re-employment law
By Kor Kian Beng, Political Correspondent
'It should be a signal to companies to review if they should continue the pay-cut practice, or the extent to which it is being done.'
National Trades Union Congress deputy secretary-general Heng Chee How, on the PSD's move to stop cutting wages of older workers
FROM July, the Public Service will stop a practice which allows government agencies to cut the pay of employees who turn 60 by up to 10 per cent.
The Public Service Division (PSD) said yesterday that it was making the change as older public-sector employees would be affected by wage adjustments should they be re-employed after reaching the retirement age of 62.
The move, which came a day after Parliament passed the Retirement and Re-employment Act, ties in with a requirement in the new law that eligible retiring staff be offered the opportunity to continue working till age 65.
The law, which takes effect on Jan 1 next year, allows employers to adjust wages and benefits of re-employed workers.
This prompted concern among workers and unions that older staff could be hit by a double whammy of wage cuts at age 60 and age 62.
The practice of cutting pay when an employee turns 60 has been prevalent among companies since 1999 - the year that the statutory retirement age was raised from 60 to 62.
Many companies resorted to doing so as it reduced the cost of keeping older workers on the job.
The PSD made it clear previously that it did not mandate an automatic pay cut at age 60 and that a 'good majority' of its employees had not been affected.
But individual agencies were free to adjust wages depending on 'an officer's salary relative to his grade' at age 60.
With the new re-employment law in place, however, this would be discontinued from July 1.
Last night, the PSD also announced that all officers in service who turned 60 and had their wages adjusted - or who will turn 60 before July this year - will have their salaries restored from July 1.
National Trades Union Congress deputy secretary-general Heng Chee How said the PSD's move to no longer cut salaries at age 60 would set an example for private-sector companies: 'It should be a signal to companies to review if they should continue the pay-cut practice, or the extent to which it is being done.'
The Public Service employs 124,000 people, or about 4 per cent of the workforce here.
Last November, it also took the lead and said it would implement re-employment practices from July, six months ahead of the new law taking effect. It had also issued re-employment guidelines to its 15 ministries and more than 50 statutory boards.
To qualify for re-employment, officers must have a satisfactory work performance, have no disciplinary action against them in the three years prior to retirement, and be medically fit.
Yesterday, the PSD updated these guidelines and spelt out the Employment Assistance Payment (EAP) amount it would give eligible officers who are not offered re-employment.
It said it would follow the amount suggested in previously issued re-employment guidelines.
These say the EAP should be between $4,500 and $10,000.
Amalgamated Union of Statutory Board Employees general secretary N. Thurairajasingam, 52, welcomed the PSD's latest moves.
He said many of the union's 5,300 members - especially the 20 per cent aged above 55 - had previously asked if the salary cut would be scrapped.
'The move is timely and in line with government efforts to get older workers to work longer,' he said.
[email protected]
Practice will be stopped from July, in view of new re-employment law
By Kor Kian Beng, Political Correspondent
'It should be a signal to companies to review if they should continue the pay-cut practice, or the extent to which it is being done.'
National Trades Union Congress deputy secretary-general Heng Chee How, on the PSD's move to stop cutting wages of older workers
FROM July, the Public Service will stop a practice which allows government agencies to cut the pay of employees who turn 60 by up to 10 per cent.
The Public Service Division (PSD) said yesterday that it was making the change as older public-sector employees would be affected by wage adjustments should they be re-employed after reaching the retirement age of 62.
The move, which came a day after Parliament passed the Retirement and Re-employment Act, ties in with a requirement in the new law that eligible retiring staff be offered the opportunity to continue working till age 65.
The law, which takes effect on Jan 1 next year, allows employers to adjust wages and benefits of re-employed workers.
This prompted concern among workers and unions that older staff could be hit by a double whammy of wage cuts at age 60 and age 62.
The practice of cutting pay when an employee turns 60 has been prevalent among companies since 1999 - the year that the statutory retirement age was raised from 60 to 62.
Many companies resorted to doing so as it reduced the cost of keeping older workers on the job.
The PSD made it clear previously that it did not mandate an automatic pay cut at age 60 and that a 'good majority' of its employees had not been affected.
But individual agencies were free to adjust wages depending on 'an officer's salary relative to his grade' at age 60.
With the new re-employment law in place, however, this would be discontinued from July 1.
Last night, the PSD also announced that all officers in service who turned 60 and had their wages adjusted - or who will turn 60 before July this year - will have their salaries restored from July 1.
National Trades Union Congress deputy secretary-general Heng Chee How said the PSD's move to no longer cut salaries at age 60 would set an example for private-sector companies: 'It should be a signal to companies to review if they should continue the pay-cut practice, or the extent to which it is being done.'
The Public Service employs 124,000 people, or about 4 per cent of the workforce here.
Last November, it also took the lead and said it would implement re-employment practices from July, six months ahead of the new law taking effect. It had also issued re-employment guidelines to its 15 ministries and more than 50 statutory boards.
To qualify for re-employment, officers must have a satisfactory work performance, have no disciplinary action against them in the three years prior to retirement, and be medically fit.
Yesterday, the PSD updated these guidelines and spelt out the Employment Assistance Payment (EAP) amount it would give eligible officers who are not offered re-employment.
It said it would follow the amount suggested in previously issued re-employment guidelines.
These say the EAP should be between $4,500 and $10,000.
Amalgamated Union of Statutory Board Employees general secretary N. Thurairajasingam, 52, welcomed the PSD's latest moves.
He said many of the union's 5,300 members - especially the 20 per cent aged above 55 - had previously asked if the salary cut would be scrapped.
'The move is timely and in line with government efforts to get older workers to work longer,' he said.
[email protected]
