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Workers should be allowed to draw down their Central Provident Fund (CPF) savings at the age of 60.

That was the stand of the Workers’ Party (WP) who said that the CPF drawdown age should not also be linked to the retirement age.

On Tuesday, the two MPs from the WP, Mr Low Thia Khiang (Hougang) and Non-Constituency MP Sylvia Lim raised concerns about workers who are not re-employed after turning 62 years old, yet cannot draw on their CPF savings until they turn 65.

According to The Straits Times, while the drawdown age is currently set at 62, the government had earlier announced that it would be raised to 63 next year, 64 in 2015 and 65 in 2018.

In addition, the government will give incentives to those who voluntarily defer their CPF drawdowns.

Speaking during the debate on the Retirement and Re-Employment Act in parliament, Mr Low criticised the new law as “half-cooked”.

He argued that Singaporeans could be left “hanging in the air” – without a job at the age of 62, yet unable to tap their CPF savings.

Ms Lim weighed in, charging that the new law will subject older workers to a “stressful re-employment process” at 62.

She highlighted that the new law applies to those who are already employed when they turn 62, and does not assist those who are unemployed to seek a job at that age.

If the government wants to delay CPF drawdowns till 65, Ms Lim said that “it should at least correspondingly provide for a more seamless transition of employment from 62 to 65”.

Under the new legislation, employers are required to offer re-employment to workers who turn 62.

If they are unable to do so, the worker needs to be compensated with an Employment Assistance Payment to tide him over as he seeks another job.

However, People’s Action Party MP Heng Chee How (Jalan Besar GRC), rebutted the WP’s call to allow drawdowns at the age of 60, calling it unhelpful.

“It would be like saying, you have a bank account. I have no idea how you are going to add money there, but I know you have to spend, so don’t listen to these guys when they tell you how to add more money into your account; just listen to me and go and draw whatever you have and start spending.”

Mr Heng, who is also the deputy secretary-general in the labour movement added that as Singaporeans have longer life spans, there would be a need to provide them with more resources.

Ms Lim later asked Manpower Minister Gan Kim Yong on the possibility to allow drawdowns to start earlier so long as payments could be stretched out over a longer period.

In his response, Mr Gan said it would mean that people would have less to survive on every month. “The better solution is to continue to add on to their savings,” he said.

“That is why Workfare has a CPF component to help to top up. If the worker continues to work, he will be able to accumulate more savings. If he starts his drawdown later, his savings will allow him to last longer.”

Mr Gan also pointed out that the unemployment rate for older resident workers – those 50 and above – remains very low. It was 3.3 per cent in June last year.

Rather than redesign the CPF scheme to cater to this minority, Mr Gan said that it would be better to deal with them on a case-by-case basis and encourage them to look for work.

He added that if they face difficulties coping, they could still be supported by programmes such as the ComCare Fund.