HRSINGAPORE Community Discussions

Salary Adjustment at Age of 60 - Update 1


Dear All,

My company currently review about this possibility to cut cost; however, could not really get a clear guidelines from MOM/Tripartite.

Is employer allow to do so? Thanks.




With regards to salary adjustments at age 60, deductions can only be made on reasonable grounds as with any other age - e.g. 1.) that the company is going through restructuring due to poor economy/performance, 2.) they has consulted with MOM and/or unions, 3.) they have made significant job role/scope reductions or new work arrangements (conversion from full-time to part-time), AND 4.) if the employee agrees with such arrangements on a new employment agreement. Otherwise, any salary adjustments made at this point on the basis of age is not deemed valid.

Under the Retirement & Re-employment Act, an employer has to offer re-employment for an employee who turn 62, and they are to engage the employee with discussions for the re-employment arrangements not less than 6 months prior to this. At this point, the company can opt to redesign the employee's job scope to accommodate for salary adjustments (e.g. reduction in overall responsibilities and fixed salary), although these readjustments have to be seen as reasonable to the employee as well. The guidelines for re-employment at age 62 can be found at the following links:




No longer permitted.




What my Company does was all salary and benefits remain unchanged except that we do not cover them the Hospitalization & Surgical Insurance after the retirement age of 62.



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