NTUC Chief Lim Swee Say recently speaking on behalf of his labour movement said that, “given the strong recovery and performance of the economy in the first quarter as well as the healthy outlook for the rest of the year, and given the healthy low unemployment situation, we think that in a way this is a good opportunity for us to consider some form of CPF restoration.”
In the almost the same breath, he added “in other words, as we continue to grow our economy and upgrade our productivity, wage pressure will go up. But it’s important we don’t put all these wage increases into our pockets and spend them for today. We must recognise that with longer lifespan and with programmes like CPF Life, the Ministry of Health has highlighted many times that we need to have more money for he althcare in the future”.
The above statements appear to hint that the bulk of any CPF restoration may go to the CPF Special (SA) and Medisave (MA) Accounts.
If this is indeed the outcome of any eventual CPF restoration, is it good news for workers?
Well, the SA may only be available for withdrawal as a monthly life annuity from age 65 under the CPF Life scheme, and the MA can only be utilised for medical expenses and medical and Eldershield insurance premiums.
Hence, from the perspective of higher wages by way of higher cash disposable income or higher Ordinary Account (OA) contribution which can be used for housing or tertiary education fees, workers may benefit not very much from such a CPF restoration.
Even if the 1.5 per cent CPF restoration in distributed to the three CPF accounts under the current rules, only about one per cent will go to the OA.
The remarks, “However, the Singapore Chinese Chamber of Commerce and Industry feels any increase in the CPF rate may lead to an upward pressure on wages and hopes Singapore’s long-term competitiveness would be taken into account before a decision is made”, may give us a hint that some employers may take the CPF restoration as a factor in their overall labour costs, and may thus delay or reduce the restoration of wage cuts and bonuses during the recent economic downturn.
Also, wage increases may be reduced by some employers to factor in the 1.5 per cent CPF restoration.
To illustrate this using a simplistic example, an employer may just reduce the originally planned wage cut restoration or wage increase by 1.5 per cent to neutralise the 1.5 per cent CPF increase.
Therefore, in the light that some of the wage cuts during the downturn may have yet to be restored, is it good news for workers?
Another way of looking at it may be whether increasing cash wages is more important to workers now, or restoring their CPF?
Also, since employers do not make CPF contributions for foreign employees, the level playing field between Singaporean and foreign workers may widen even further.
Will businesses pass on the increased business cost to consumers, which may be the last thing we need, as Singapore is just coming out of its worst recession?
Let’s look at other labour issues which in my view, should demand more of the labour movement’s attention, perhaps more so than asking for CPF restoration now.
Re-employment of workers at retirement age
I refer to the article “Heng Chee How on wages, labour” (Today, Apr 6).
It states that “Firms will have to offer to re-hire a worker once he reaches retirement age, provided he is medically fit and has been satisfactory in his work performance. But the NTUC said, it is seeing more men quitting the workforce once they reach their 50s’”.
The original proposal to have legislation requiring employers to re-employ workers when they reach 62 years old, is now expected to be passed only by 2012. Employers have to give an Employment Assistance Payment (EAP) of (between) $4,500 to $10,000, if the employer decides not to re-employ the worker.
The Manpower Minister’s remarks in Parliament recently, that employers and employees should exercise flexibility in determining the actual EAP amount, using these levels as references, may be of little comfort to workers, as it would mainly be the employer’s prerogative.
Many employers may just opt for the minimum EAP of $4,500, regardless of the length of service or last drawn pay. Moreover, the outcome of the “EAP” solution hedged out by the Tripartite Implementation Workgroup (TIWG), may be that older lower-income workers who are a few years away from reaching age 62, may find it even harder to get a job, as employers may be reluctant, knowing that an EAP will be due.
What safeguards are there to prevent employers from terminating workers before they reach 62, to avoid paying the EAP?
Instead of using the minimum EAP of $4,500 which is based on three months of salary of 25 per cent of workers, and the cap of $10,000 based on the salary of two-thirds of workers, why not use the salary of all workers at age 62 instead of all workers of all ages?
Surely, the salary of the worker who are aged 62, is a better and fairer benchmark, than that of all workers which may be lower.
For those who are unable to find another job, or have insufficient cash savings, how do they cover their family’s expenses, for the balance two years and nine months until age 65, when their three-month EAP runs out?
Without the original proposed re-employment legislation, and short of a better and more “assured” solution than the “flexibility” of the EAP from the workers’ perspective, there is now a mis-match between the CPF Life or CPF Minimum Sum payout draw-down age of 65 and the age 62 EAP, for those turning 55 from this year, compared to the 62 CPF draw-down age in the past.
By: Leong Sze Hian
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It is a good qn to ask whether a potential CPF increase will go into OA, SA or medisave acct. If this is meant for retirement, it will go into the SA account which wouldn’t benefit anyone until they are retired.
Nevertheless, any CPF increase is better than none from the perspective of the employee.
Let us not pick quarrels for the sake of quarrelling.
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Any restoration of the CPF is good news. It is what is rightfully ours to begin with, that’s why the term being used here is ‘restoration’. It means we are getting back what is owed us.
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The argument I have is the manner in which the restoration is being considered. It has to be put to the businesses to hear what they have to say before any final decision is made. For all you know, we might just get another partial restoration.
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At the time when they cut the CPF contributions there were no such discussion with the people. Why then the double standard?
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It shows clearly that the interest of businesses is more important than those of the people. And this is the biggest problem with this government.
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The writer wrote: “…Also, since employers do not make CPF contributions for foreign employees, the level playing field between Singaporean and foreign workers may widen even further…”
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Now, now, who really cares whether the playing-field is level for the foreigner or not? Strange it is, this line of argument. The field has been so lop-sided against the Singaporean we should not even bother with how the foreigner feels.
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I do agree however, that businesses might pass the bucket to consumers but this should be tackled separately.
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For now, CPF restoration is many years too late. I am asking for full restoration and not another loud-hailer exercise to restore just 0.25%, for example.
NONONO… CPF is like a black hole! Anything that goes in will never see the light of day again. We will never see it again! NONONO
these type of news come out: got economic growth/cpf rate increase/upgrading of markets….
can only mean 1 thing… election’s on the cards!
why are they not restoring the employer’s cpf back to the original 20%? For those who are too young, you may not know that originally the employee and employer cpf are both 20%. If I remember correctly lau goh promised to restore back to 20% once the economy recovered in the 1990s but just like his other promises all are broken promises.
In line with coming election….ANYTHING is possible in SingaPAPore
stop all these cpf BS, its all gone and don’t even try to brainwash the people again, the trust is not there anymore, you just can’t trust these MIW anymore and its time they have to go for good.
I use Crab Brand Salt…you should try it.. and use plenty of it.
Not just a pinch…
Minister and also NTUC chief Lim Swee Say only SUGGEST to Employer’s to restore the CPF contribution.I doubt so employer’s will take-up this suggestion which doesn’t benefits them at all unless it become mandatory.
It’s just like the 13 month bonus,since it’s not mandatory many companies refuse to give it to their loyal employee’s including my employer.
It’s just another set piece of wayang for the upcoming GE.More are coming up soon.
Nothing but another pre-election ‘wayang show’. When the economy was good, why was there no suggestion at all. In any case, the economy is still not that robust yet and the future is still very uncertain. Most employers would rather reward their shareholders by declaring more dividends for them. Restore CPF contribution?. TKK (tan koo koo)
ALAMAK,
ELECTION CARROT LA, MORONS CAN ALSO CONCLUDE …
Actually, the issue shouldn’t be politicised. The govt could just as easily turn around and say they don’t want to be seen to be offering an election carrot and forego the increase. Then place the entire blame onto the opposition. No point.
If the CPF rate is restored at a small amount and/or parked into SA or medisave, it wouldn’t have a significant impact to employees. So even if no one says anything, its still no impact.
Even at the full rate restoration, its max $67.50 a month. Does anyone seriously think that is going to be an “election carrot” that would change people’s voting patterns. lol.
So I would like for once to see an issue not become another opposition “govt is bad no matter what they do” slogan.
Its historical that pap well known for dangling election carrots. I m gonna be madly suprised if they dont dangle any one, big or small for singaporeans to bite this time around.
Can anyone confirm that pap dont dangle election carrots?
In fact a moron dont expect pap to dangle only just one carrot - big or small – please !!!
They give a little back to the people to justify their hefty 8.8% increment.
It is long overdued….
Fake one la… before election warm up…
money that cannot help tide over short/mid term is useless in the long term, cost of living go up, got lots of CPF money also no use.
money sitting idle will loose more value so in future any payout post retirement may well be insufficient to sustain oneself. looks like the old & poor are resigned to picking up trash, cans for recycling or keep on working till drop dead…
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Its good news for employees. But not good news for employers.
There is nothing good news in my opinion.
Already facing FT competition, cpf has been an overhead to employers compared to hiring a FT.
Now, with economy just claimed to be better, suggesting this is not welcomed by employers imho.
Would it make employers wanna hire FT even more?
they could justify hiring FTs by citing the increased CPF they need to pay and pay. No?
The right thing LSS should do is this :
1. cut employee CPF for the short term by 5 percent to increase the resident employee’s take home cash.
This in turn can boost spending and accelerate the economic recovery.
2. Cut the employer CPF. this will make resident employees that much more delicious for employers.
Thus, you can see that a reverse of his proposal can actually be a better solution which i give for free. not even a cent is charged.
in fact, to me, its a no brainer.
Shows only two thing of Singaporeans – always flipflopping, and never satisfied
“…Shows only two thing of Singaporeans – always flipflopping, and never satisfied…”: peppy.
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I beg to differ. Singaporeans had been overly satisfied with the PAP government for all of fifty years. Why do you think it has been voted into parliament over and over again.
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The problem here is that the same government is now finding its own citizens a hindrance to its survival.
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Because of this, and its inability to move the people forward in tandem with the so-called prosperity of the country, that it is now labelling us an unsatisfied and forever-complaining people.
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It is so insulting for the grandfather of the country, a well-respected statesman, respected by politicians and commoners all over the world, to even label us ‘Champion Complainers’.
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Should we remain silent and prove him wrong or should we tell him off like we should.
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Before you brush off comments here as rhetorics and rants, it would do you a world of good to sieve out those that give reasons to why such a move is either good or bad.
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This is the way to rationalize things and I prefer to think that Singaporeans are now more vocal because they are more able to rationalize better. This is very different from mindless complains, which I must add, we still do get from time to time.
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It is logical and true that businesses will now have to rethink their strategy should CPF be restored. It is why the government has to seek their opinions.
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But what some are aking is why now? What is the impact to both employers and employees. these are valid questions and concerns.
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Will it be far-fetched if my analysis concludes that the motive is to regain why the government had lost in recent investments? Knowing that it cannot squeeze the people at a time when election wind is in the air, the next best thing is to squeeze the businesses, so that eventually the costs they incur will still be passed on to consumers, the people?
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Are these not valid concerns.
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So please, do not brush such comments off as complaints. We cannot continue to believe this government on every word that they spew these days. We have grown up and we need to see proof.
Sure, any restoration is good.
Given how it is structured & the utilization strictly managed, we can see quite clearly which institutions are the ones benefiting it first & the most.
We should remember that ministers & MPs are paid NOT to talk, suggest, hint, promise Swiss stds, etc.. but to DELIVER. So what they talk but the cow still doesn’t comes home? So based on LSS track record, I wouldn’t hold my breath on this one.
@peppy, 17 April 2010
Show me 8.8% pay rise, no questions asked and see if S’poreans will flip-flop and not be satisfied. Duh.
hello peppy,
”Shows only two thing of Singaporeans – always flipflopping, and never satisfied”
erm, i think majority singaporeans have not wanted employer cpf restoration as much as wanted to have cpf in their hands. they generally wanted pay hike from many years of wage freeze or cuts if not stagnation.
Employer CPF , while appear good for paying instalments of flats, is a burden on employers making residents less competitive than FTs from cost perspective. The existing extreme situation of employers hiring so many foreigners even low skilled ones is a solid testament to the problem of cost.
As i proposed:
Either
1. Lower employee contribution rate by 5 % to increase Ready cash flow in the hands of employees thus help accelerate spending OR
2. Lower employer CPF thus making residents more competitve vis a vis FTs.
To be fair, this proposal can affect 5% of the cpf contribution used by many to pay and pay flat installments. But only the naive cannot understand that Keeping a Job is worth getting more in the CPF.
We must wake up.
Erata, last sentence should be:
Keeping a Job, at lower employer CPF, is better than Losing a Job where you get a FAT ZERO cpf amount and salary.
All this big wayang. Just ask who is ruuning the NTUC and who is running MOM.
Workers in their 30s and 40s would have monstrous amount when they hit 55. But how much can they draw then? The likelihood is that their minimum sum would have skyrocketted and most probably you must be 67 or older to draw out ie if there is any sum to be drawn out.
Keeping hoping – tan koo koo or sampai tua.
If the current govt really want to hang a carrot for this coming election, they should instead distribute all the FT levies collection into the Singaporeans’ CPF account for workers earning $3000 or below. This may loosen their burden of servicing their housing loans.
Hum, kudos! you are also ministerial calibre. Your proposals may work also.
Calling all employers to restore CPF rate and yaking about how good is the employement and economy state seems to tell us that these ministers can’t wait for their next increment. Is employment market really that good? If you browsed through Straits Times weekend recruitment, you hardly see much jobs around. Did the ministers look at their own paper everyday? Reporters can lie about news, but obituary and recrutiment pages can’t lie right?
just like to ask a technical question. Can a company advertise got many jobs but actually the real hiring may come only much much later , if they hire at all?
So you all think that the economy had recovered ?Pls lah,Lim Sweet Say open mouth say say only mah.You all happy mah.He pay meh?
We all must understand that CPF is paid by our employer,not by anyone who say say only..We must understand and hope that our employer make a decent profit first .When they profit,they will give us a better and higher pay and this is many times better than the CPF restoration.Any increase in pay means an increase in CPF automatically even without the changes in rate contribution.Do we hope to see our employer making profit and give us a better pay or to see them struggling and forcing them to take FT / FWs or close down instead?.
Go and see how many employers being hauled to Court for late payment in CPF.Find out how CPF wrote to their employees on their employers’ late contribution.You think Garmen help them meh?
So,lets be more productive and see our companies grow.Employer survive,employee alive..
Can TOC put up a special discussion on securing health in Singapore and throw up the questions related to health insurance? Thanks.
on behalf of phuachukangs inc…from the shopkeepers to the brotelkeepers.. any restorations of employers cpf contributions @ this moment is sucidal..if anybody hav bothered to waltz aroun..the worksites/hdb heartlands and shoppin centres..you would hav seen many empty lots in prime locations stayin EMPTY… rentals/maintainances alone killed the employers…
in lim sia suayed eyes.. he is targettin @ the GOVERNMENT civil servants VOTES..simply because the government is the biggest employers of all
and to the government of payin extras cpf contributions..its a small small water thinggie…
which government department loss money @ all? all it needs to do is to raise costs…which still endup all of us the poor peasants PAYIN… you know transport fares/utilities/blah/blah..can bargained mey?
off course without a doubt i am sured many singapOORiums would be grateFOOL if the cpf is restored afterall it was OUR GODgiven rights in the FIRST place…its not a priviledges @ ALL…
but liked someone says…don’t anyhow implement funny rulins…which might results in more employers fold shops/arms….how many legshakers of our peasants are in their 40s awaitin for LOBANGs?…
when you cast vote in the coming months…please remind yourself, your family, your neighbours….that we’re voting 1) for the future of our children 2) our CPF…and no more frog MPs???…think carefully…this is the last chance to save ourselves ftom these blood suckers!!
Did Lim Swee Say really ‘say” anything new ?
what restoration ? PAP has use CPF cut in every economic downturn since 1985, that year was orchestrated by Lee Hsieh Loon as a Finance Minister, he cut the employre’s CPF contribution from 25% to merely 10%.
The 25 % rate has never be restored, while we see Hosuing Prices jumped 400% and Minister sa;ary surged more than 600%
Lim Swee Say, pls have some backbone and don’t give empty talk !
watch carefully of the body language of Lim Swee Say in the picture above, his palms closed in the “prayers” getsure, his sub consciouness is speaking aloud — Let’s us PRAY hard to have 1% restoration if GOD ( PAP’s bosses ) allowed “
money now not enough. need employer to contribute more into CPF.. we need to cover up some loses made during last financial crisis.. when HC finally hands over, at least the figures all looked good. give me more monies. Remember what he keeps emphasising , TH is not totally a SWF, it operates like a company. which means a company can go bankrupt…..keep spending. SIN are well known overseas to be throwing away good money.
increasing CPF is the same as increase payment to the govt.
This pig told us to be cheap, yet he is willing to increase CPF contribution.
Why?
Payment towards the govt mah!
Cheaper, Better, Faster.
What happened to ‘Cheaper’ if employer cpf increases causing employers to pay more when hiring a resident? Would this LPPL resulting in employers paying that much lesser to new hires?
Lim Swee Say, please let the situation be. I may lose my job if you make the employers to pay me more cpf. No pls. pls dun do it. I am terrified of becoming less competitive wage wise.
Take cover everyone! GE coming! Goodies also coming! Sian…. days after GE will be hell!
Looks like someone is manipulating all these good news as time is running short. This time they must really be panaroid about losing more seats to the opposition.
Beware of the fake carrots !
let’s hope these shameless leader continue another term so that this country & people can rot & decay further till all the worms comes out. especially the 66% who voted them in, majulah singapura !!!
shameless leader
especially the 66% who voted them in, majulah singapura !!!
………………………………….
and this are the SAME 66% who would still grumbled alamak! utilities increased..mortgages cannot serviced..worst of all even to the extend of seekin a t-loans from moi…