Policymakers, employers, and unions are rallying together to reimagine employment for senior workers as the country grapples with an ageing workforce.

A Tripartite Workgroup on Senior Employment will spearhead efforts to enhance the employability of older professionals; encourage age-friendly workplaces; and explore multi-stage career models.

Senior Minister of State for Manpower Dr Koh Poh Koon shed light on the urgency of supporting older workers.

The workgroup, co-chaired by Dr Koh, will engage businesses, HR professionals, and senior employees in co-creating employment solutions. Companies willing to prototype new models for senior employment will receive funding and consultancy support.

A key proposal under review is fractional work, where seasoned professionals leverage their expertise on a part-time basis, rather than being tied to traditional full-time roles.

Dr Koh also stressed the importance of lifelong learning, urging workers to continuously upgrade their skills and stay adaptable in late-stage careers.

The workgroup aims to bridge this gap by tailoring career services for older workers, including career guidance workshops by Workforce Singapore and its partners.

These initiatives form part of Singapore Budget 2025’s broader strategy to support older workers.

Also Read: How to support retirees and senior workers

CPF contributions of older workers

Notably, the Central Provident Fund contribution rates for employees aged 55 to 65 will rise by 1.5 percentage points in 2026 to reflect the roadmap of the Tripartite Workgroup on Older Workers.

For workers aged 55 to 60, CPF contributions will reach 34%, while those 60 to 65 will see contributions rise to 25%. However, to soften the financial impact on businesses, the government will provide a one-year CPF Transition Offset, covering half of the increase in employer CPF contributions for older workers.

Also Read: 10 signs of prejudice against older workers

SEC extended: A win for employers?

Recognising the importance of retaining experienced talent, the government will extend the Senior Employment Credit until 2026. Since its launch in 2021, over 117,000 employers have benefitted from the scheme, which offsets wages for Singaporeans aged 60 and above earning under S$4,000 per month.

To align with the re-employment age increase to 69 in 2026, the SEC’s highest wage support tier (7%) will now apply to workers aged 69 and above.

For other age brackets, employers will receive:

• 4% wage support for workers aged 65-67
• 2% wage support for workers aged 60-64

This initiative aims to ease wage pressures on businesses while ensuring that senior employees remain valued contributors to Singapore’s economy.

A workforce in transition

Singapore’s labour force participation rate dipped for the third consecutive year. The figure stood at 68.2% in 2024, down from 70% in 2022, largely due to the rising proportion of seniors in the workforce.

The country boasts one of the highest labour participation rates for workers aged 60 to 69 among OECD nations at 59.7%. However, a troubling trend is emerging. Many seniors exit the workforce well before the official re-employment age of 67.

The participation rate plummets from 86% at ages 50-54 to 67.9% at 60-64, reflecting a steep drop of nearly 18 percentage points.

Dr Koh attributed this to several factors: some seniors opt to prioritise personal and family commitments, while others, having been out of the workforce for some time, struggle to refresh their skills.