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Commentary: If more work in old age, how relevant is the retirement age?

Prudential's move to do away with the retirement age should spark off a discussion about how relevant the retirement age is, say two business observers.

Commentary: If more work in old age, how relevant is the retirement age?

File photo of an elderly driver in Singapore. (Photo:

SINGAPORE: Last month, Prudential made the retirement age a thing of the past. 

Employees at Prudential now enjoy the flexibility of staying within the company beyond the retirement age of 62 and can do so under the same terms and conditions as what they currently receive. 

Doing away with the retirement age, as exemplified by Prudential, is consistent with changes in the economic and human landscapes. 

Chief among these drivers is the global rise in life-expectancy and an ageing yet healthy population. In Singapore, life expectancy has risen from 76.3 in 1995 to 83.1 in 2017 and is projected to reach 85.4 years by 2040. 

People walking along Singapore's Central Business District area. (File photo: Ngau Kai Yan) People crossing a street in Singapore's Central Business District. (File photo: Ngau Kai Yan)

This demographic shift will have profound effects on how organisations manage human resources. However, it may also benefit the labour market in various ways. 

READ: Living longer? Here’s what working for 60 years should look like, a commentary


First, it is widely accepted in policy studies that longevity correlates with better health. Advances in technology, healthcare and lifestyle changes provide people with higher standards of living. In many developed countries, people take better care of themselves, physically, mentally and socially.  

Thus, with increasing life expectancy increases and breakthroughs in health literacy and diet, we can expect our labour force, though ageing, to remain productive. 

Second, recent studies have shown that longevity encourages human capital accumulation. Increasing life expectancy, with declining risk of mortality, leads to greater education attainment. 

This might be because a longer life provides added motivation to individuals to accumulate knowledge. The average person can now boast a longer trajectory to capture the returns to their investments in things like skills training and education – and obtain more educational qualifications in one or more fields. 

This trend at the individual level is reaping national manpower dividends, as countries with longer life expectancies tend to have a better trained workforce. 

A student helping an elderly woman use a computer at an IDA workshop. (File photo: IDA)

And as economies become more sophisticated, they propel the demand for highly qualified individuals with a diverse set of skills – a virtuous cycle of economic development.  

That reason might explain the recent phenomenon of individuals in their 20s or 30s taking a gap year, switching fields or trying out different things.

As longevity reduces the opportunity costs of avoiding a career mismatch and increases the net present value of training and retraining, younger adults may take their time to hone their skills and inform their career choices in this competitive environment.

READ: Job seekers, do not settle for second choice, a commentary

Third, some skills improve with age. These so-called “age-appreciating” skills include technical, writing, oral and interpersonal skills, and teamworking, skills that are valued in the workplace, and even more so in the future as mature economies move away from physically demanding industries to knowledge and skill-based sectors.

So a 62-year-old today is likely to be healthier, more educated and skilled than the 62-year-old of 20 years ago – and better equipped to meet new demands of employment.


Why then, should we re-consider the relevance of the retirement age? Advocates of a defined retirement age argue that it provides opportunities for the young to advance their careers by retiring the “old guard” and providing options for them to step down into part-time or project-based work. 

In Singapore, the Retirement and Re-employment Act also makes the retirement age a safeguard for workers, because it makes it illegal for a company to ask an employee to retire before 62.

File photo of an elderly cleaner in Singapore. (File photo: Xabryna Kek)

READ: You can still retire at 40, even with a longer life expectancy, a commentary

But from the perspective of the older worker, having a retirement age introduces friction, bias and potentially lower wages and benefits when rehired and put on a new contract after the retirement age – to their detriment.

Employers have to offer re-employment past 62 on a contract basis, yet are not required to do so at the same terms and conditions as before. 

Our national discourse on retirement must bear in mind that in the next 10 years, there will be dramatic shifts in our labour market.

Since 1990, the number of individuals aged 60 and above has more than tripled, with this group increasing at a faster rate than the general population. More than ever, people in their 60s will be a large part of our demographic structure. 


The dividends of a longer working life are for us to harvest. While macroeconomic forces may compel employers to retain older workers, companies reap benefits from having more experienced staff who have industry know-how, skills and experience – and can mentor younger workers. 

READ: People ready to retire later but preparing older workers will require more than reskilling, a commentary

Working longer also benefits workers and society, where studies have shown that work keeps people physically active, socially connected and mentally challenged.  

In particular, the risk of getting dementia is reduced by 3.2 per cent with each additional year of work, according to recent studies by INSERM, the French government’s health research agency. 

This statistic alone should drive Singapore to rethink the retirement age as elderly healthcare related to ageing care is projected to increase 10-fold by 2030.

Elderly in Singapore (File photo: TODAY) File photo: TODAY.

READ: Matching older workers to jobs the key manpower challenge for Singapore, a commentary

Finally, attitudes are shifting towards fuller working lives. For example, the 2015 British Social Attitudes Survey, which covered approximately 4,300 people aged 18 and over, found that younger people were more likely to say they expect to retire in their 70s.  

Although it may be premature to discuss the abolishment of the retirement age, these developments should cause us to reconsider its relevance. 

Meanwhile, companies that follow in Prudential’s footsteps here will likely find themselves on the right side of history in time to come.

Dr Nicholas Sim is senior lecturer at the School of Business, Singapore University of Social Sciences.

Dr Sabrina Heng is associate investigator and visiting senior research fellow at the University of Adelaide, Australia, and associate lecturer at at PSB Academy.

Source: CNA/nr