The labour movement recently called for an inclusive review of the Central Provident Fund (CPF) contribution rates for workers of all ages ("Problems with raising CPF rates for older workers" by Mr Clayton Teo, "Take-home pay may be hit" by Mr Bernard Allen Utchenik, and "What about those aged above 55?" by Ms Elsie Loo; all published last Friday).
We hope to see enhancement in the employer contribution to the Medisave accounts of workers in all age groups, in view of rising health-care costs and medical insurance premiums.
And for workers who are above 55 years old, we asked for strengthening of their Special Accounts so that they have more savings for retirement, especially with longer life expectancies now.
With Singaporeans entering the workforce, getting married and having children at a later age, the financial commitments of workers in their 50s today are akin to those of workers in their 40s in the past.
The age band of above 50 up to 55 was created in 2005 to improve employability, as the employment rates of those in this group were lower than those of the younger ones, and seniority-based wages discouraged employers from hiring them.
Their total CPF contribution rates were cut in 2005 and 2006.
Employers have since moved towards a performance-based wage system, there is re-employment legislation in place now, and employers who hire workers aged above 50 receive the Special Employment Credit from the Government.
The resident employment rate of this group of workers rose by about 10 percentage points over the last decade. Hence, in 2012, there was consensus among employers, the Government and unions to raise their CPF contribution rates gradually, towards the same rates for younger workers.
The National Trades Union Congress (NTUC) is pleased to note that the Singapore National Employers Federation supports this call, so that more are attracted to enter the workforce and help ease the current labour crunch; likewise, the Association of Small and Medium Enterprises thinks this increase will not adversely impact the workers' employability.
Bearing in mind that workers may have ongoing financial commitments, the NTUC has called for employers to contribute more than employees, and that contributions from employees should be channelled into their Ordinary Accounts, so that workers can use both private savings and CPF savings to meet these commitments.
Heng Chee How
Deputy Secretary-General
National Trades Union Congress
