Record S$635.1m in CPF arrears recovered

Singapore

THE Central Provident Fund Board has recovered S$635.1 million in CPF arrears owed to more than 380,000 employees in 2016 from employers who underpaid, did not pay or made late payments of CPF contributions.

This is the largest amount recorded since records of CPF arrears recovered were available in 2011 and is up from the S$516 million recovered in 2015.

Last year, S$19.7 million were recovered in cases of underpayment or non-payment from 1,608 employers, benefiting 16,202 employees.

Of these employers, 32 self-rectified after realising they were not compliant with the CPF Act.

The highest amount recovered through self-rectification in 2016 was from an employer in the financial sector which informed the CPF Board in March last year that it had wrongly classified its employees' incentive payments as Ordinary Wages (OW) instead of Additional Wages (AW). This resulted in underpayment of CPF contributions as the company had applied the monthly OW ceiling when computing CPF contributions for its employees instead of the annual AW ceiling.

The remaining S$615.4 million recovered were late CPF contributions from an average of about 5,440 employers each month in 2016.

CPF Board on Monday said that most of the late payments were recovered within a month, adding that its timely detection and follow-up enforcement actions assisted more than 363,000 workers in receiving CPF contributions due to them.

Said Belinda Teoh, CPF Board group director of employer collections and enforcement: "This year, we are particularly encouraged by the 32 employers who came forward to self-rectify in 2016 which resulted in the recovery of about S$1 million in arrears for about 800 employees.

"We will continue to increase awareness among employers of their duty and responsibility to meet their CPF obligations so as to help members meet their retirement, housing and healthcare needs."

Last year, there were 22 convictions for non-payment and underpayment of CPF and 350 convictions for late payment. All convicted employers were fined and ordered to pay the CPF arrears by the State Court.