PAP advocacy group proposes equal CPF contribution rates for all age groups

Singapore

RAISING Central Provident Fund (CPF) contribution rates for older workers above the age of 55, up to the same level as those for their younger peers, is one of several recommendations that a People's Action Party (PAP) advocacy group has submitted to the government.

In its report, released on Wednesday, the PAP Seniors Group (PAP.SG) called for older workers' CPF contribution rates to be raised "so that all members continue to enjoy the same level of CPF contributions regardless of how old they are".

"This will also help to boost their retirement adequacy, and ensure that our older workers are paid the same as their younger colleagues for doing the same job," it added.

Currently, CPF contribution rates decrease progressively after the age of 55. Workers aged 55 and younger have a 17 per cent employer contribution and a 20 per cent employee contribution.

For workers above 55 to 60, the rates fall to 13 per cent each. From above 60 to 65, they fall further to 9 per cent and 7.5 per cent respectively. Above the age of 65, the rates fall to 7.5 per cent and 5 per cent respectively.

Similar calls have been made in recent years. Earlier this month, Institute of Policy Studies researchers Christopher Gee and Damien Huang suggested that older workers' CPF contribution rates be raised "to improve their retirement adequacy".

Older workers' CPF contribution rates "and their impact on retirement adequacy" is also an area being studied by the Tripartite Workgroup on Older Workers. Set up last year, the workgroup's other focus is reviewing the retirement age of 62 and re-employment age of up to 67.

And in the 2018 Budget debate, labour MP Zainal Sapari suggested not cutting employers'CPF contributions until the age of 65, while Intan Azura Mokhtar proposed delaying the cut to a later age such as 60 or cutting contributions in a more gradual manner.

CPF rates have been differentiated by age since 1988, thought but the details have varied over the decades.

The most recent change, in 2016, was in the direction of less differentation. Employer and employee rates were raised for workers aged above 50 and up to 55, bringing them on a par with rates for younger workers.

Other CPF-related proposals by PAP.SG include requiring self-employed persons to contribute to their CPF Special Account, and providing incentives to defer the start of CPF retirement payouts beyond the age of 65, "so as to increase their monthly payouts".

On the broader issue of employment, PAP.SG called for more companies to offer and encourage workers to adopt flexible work arrangements, to make it easier for older workers to keep working, as well as more efforts to help older workers access freelance opportunities.

The PAP.SG report also included recommendations in areas such as volunteering, healthcare, family support, housing and social support.

At a press conference on Wednesday, PAP.SG chairman Tan Chuan-Jin - who is also Speaker of Parliament - said that a motion will be tabled on the matters raised in the paper at the next Parliament sitting on Feb 11.