Retirement reimagined: Urgent actions to advance inclusive benefits for a changing workforce 

These professionals are staying longer as the average tenure for professionals, managers, executives, and technicians (PMET) is now exceeding four years, representing a 25% increase since 2021. This highlights the growing importance of longevity in workforce planning and retirement readiness. With EP approval rates at 62%, tightening quotas in 2026, and a rapidly ageing population with 25% projected to be over age 65 by 2030, attracting and retaining global talent while building inclusive organisations with sustainable, long-term benefits is mission critical.

CPF excellence highlights retirement challenges

Singapore’s Central Provident Fund (CPF), rated “A” in the Mercer Global Pension Index, provides a reliable foundation for retirement savings, ensuring long-term financial security and peace of mind. 

The 2026 Budget’s commitment to lifestyle funds, which automatically adjust investment risk as members approach retirement, demonstrates government leadership in enhancing CPF adequacy and sustainability. This underscores the need for retirement solutions that balance growth and security to support longevity and sustainable retirement outcomes.

Corporate progress: Half lead the way, half need to catch up

Over half of Singapore corporates with more than 20% foreign workforce now offer structured CPF-equivalent retirement benefits, up from 25% in 2023. 

These companies report higher acceptance rates, lower attrition among employees with retirement plans, and strong alignment with diversity, equity, and inclusion (DEI) through retirement parity.

Conversely, companies slow to act face rising recruitment costs amid EP constraints and risk losing talent to organisations that provide equitable rewards and long-term security.

Leading companies are expanding retirement plan eligibility beyond foreign PMETs to all employees and funding supplementary retirement plans beyond CPF contributions, recognizing their role in fostering financial resilience and workforce longevity.

The pitfall of cash allowances

With over 70% of MNCs localizing reward packages by shifting from expat premiums to local packages, cash allowances became a common but ineffective quick fix.

Employees tend to spend 78% of cash allowances immediately instead of saving them, resulting in a lack of CPF’s structured saving discipline, overwhelming personal responsibility for retirement savings, and retirement wealth gaps of 40% to 60% compared to local peers. This undermines DEI commitments and long-term financial wellbeing.

Leveraging Singapore's fintech ecosystem powers inclusive solutions

Singapore's fintech sector enables efficient, high-value retirement solutions that include:

• Corporate-branded innovative digital offerings aligned with company values
• Real-time dashboards tracking progress against local benchmarks
• 30% to 40% reduction in administration costs through API automation
• Flexible participation options supporting with corporate strategy

Three immediate actions for corporate leaders

1. Quantify the gap: Assess your foreign-local retirement shortfall. Wealth gaps of 40% to 60% pose urgent DEI and retention risks threatening workforce stability.
2. Replace cash with structure: Implement corporate-branded innovative digital retirement solutions to encourage disciplined long-term saving and sustainable retirement income.
3. Benchmark against leaders: Join the 50% of companies providing structured contributions. Laggards face 28% lower acceptance rates in today's EP-constrained market, risking future talent shortages.

2026: The strategic deadline

With foreign talent representing over 40% of Singapore's PMET workforce, rapid population ageing, and increasing tenure, reliance on cash allowances will create tomorrow's retirement shortfalls and today's attrition. Structured retirement solutions drive loyalty, wealth accumulation, tenure stability, and DEI success, which are key pillars of long-term organisational resilience.

In an ageing Singapore, prioritizing retirement equity is a DEI imperative. Forward-thinking MNCs recognise that unstructured cash allowances foster inequity and  lack of discipline. Structured retirement plans create competitive advantage, demonstrate corporate care, and build inclusive workplaces that support longevity.

Mercer has successfully guided numerous MNCs through this transition to corporate-branded, flexible supplementary retirement plans that deliver CPF-like outcomes while aligning with company values. 

As EP quotas tighten and demographic pressures intensify, delay is not an option. Act decisively now or risk losing your top talent to competitors.