Current CPF Measures Will Not Change

Current CPF Measures Will Not Change
- Lianhe Zaobao, 11 December 2007

Please refer to the letter by Mr Jin Daqiang, and his suggestion to exclude overtime payments and bonuses from employer CPF contributions (ZB, 1 December).

2.   Since 1988, older workers above age 55 have had lower employer CPF contribution rates to enhance their employability. In addition, in January 2005, the contribution rates for workers aged 50-55 were also lowered.

3.   In July this year, to further increase the employability of older low-wage workers earning up to $1,500 a month, the Government made another reduction to their employer CPF contribution rate. In addition, employees' CPF rates have also been lowered so that they have more take home pay to meet their daily needs. To make up for the shortfall in CPF contributions, the Government will give older low-wage workers Workfare Income Supplements (WIS), in CPF as well as cash.

4.   In view of these measures, there is no need to further exclude overtime payments and bonuses from employer CPF contributions.

Increasing the Competitiveness of Local Workers
- Lianhe Zaobao, 01 December 2007

2007 was a very good year for our economy. However, for a low-wage and low-skilled worker like me who is above 45 years, 2007 was not a prosperous year. Instead, my income for 2007 is less than that for 2006.

The reason is that in 2006, I had overtime work, but this year the Government's relaxation on foreign manpower policy saw a large number of workers from East Malaysia, China and foreign students who came to Singapore to study, entering the hotel industry. Overtime work went to these foreigners, depriving local workers of the opportunity to perform more overtime work to increase our income.

Consider this: If an employer gets a Singaporean worker to perform two hours of work, he has to pay the worker $17 ($15 for wages and a further 13% for CPF). On the other hand, the employer needs only pay a foreign worker $12. I do not mean to discriminate against foreign workers but hope that the Government can revise CPF rules, such that employers need only pay CPF for local workers' base salary but not for overtime work and bonus. This will increase our competitiveness and thus, our income. As for life after 85 years, I feel this is not the time to think about it.