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CPF restoration now – is it really good news?

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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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Ng Eng Hen: Dust clouds likely caused armoured vehicle collision during Exercise Wallaby

Dust clouds limiting visibility likely contributed to the collision between two Hunter vehicles during Exercise Wallaby, Defence Minister Ng Eng Hen explained in his parliamentary reply. 12 servicemen sustained mild injuries, but safety measures prevented more serious outcomes. A formal investigation is ongoing to ensure further safety improvements.

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SINGAPORE: Low visibility caused by dust clouds was identified as the likely cause of the collision between two Hunter armoured fighting vehicles (AFVs) during Exercise Wallaby last month, Defence Minister Ng Eng Hen said in a written parliamentary response on Tuesday (15 October).

The incident, which occurred in Queensland, Australia, on 24 September 2024, resulted in mild injuries to 12 servicemen.

Dr Ng’s statement was in response to a parliamentary question from Mr Dennis Tan, Workers’ Party Member of Parliament for Hougang SMC.

Mr Tan asked for details on the accident, specifically its cause and whether any lessons could be applied to enhance training and operational safety within the Singapore Armed Forces (SAF).

The collision took place during a night-time movement of Hunter AFVs at the Shoalwater Bay Training Area.

The vehicles were returning to base when one rear-ended another. Dr Ng explained that the dust clouds generated by the AFVs’ movement significantly impaired visibility, might likely contributing to the accident.

The 12 affected servicemen sustained mild injuries and were promptly taken to the nearest medical facility.

None of the injuries required hospitalisation, and all 12 servicemen were able to rejoin their units for training the next day.

According to the minister, adherence to safety protocols—such as wearing seat belts and protective gear—played a crucial role in limiting the injuries to mild ones.

Following the incident, a safety pause was immediately implemented, with all drivers being reminded to maintain proper safety distances, especially when visibility was compromised.

Troops were also reminded to adhere strictly to safety protocols, including the proper use of safety equipment, Dr Ng added.

The safety lessons from the incident were shared not only with the affected units but also with other participating groups in the exercise, as well as units back in Singapore, through dedicated safety briefings.

Mr Tan also asked about the broader implications of the incident. In his response, Dr Ng said that a formal investigation had been launched in accordance with SAF’s safety incident protocol.

The investigation aims to assess the circumstances more thoroughly and identify any further measures that could be taken to enhance safety.

Dr Ng shared that recommendations arising from the investigation will be implemented where necessary.

Exercise Wallaby is SAF’s largest unilateral overseas exercise, and the 2024 edition began on 8 September, running until 3 November.

The exercise involves approximately 6,200 personnel, including 500 operationally ready national servicemen.

The exercise has been conducted at Shoalwater Bay Training Area in Queensland since 1990, and it is a key part of SAF’s overseas training program.

The Hunter AFV, one of the vehicles involved in the collision, is a state-of-the-art platform jointly developed by the Defence Science and Technology Agency, the Singapore Army, and ST Engineering.

It replaced the SAF’s aging fleet of Ultra M113 AFVs in 2019, which had been in service since the 1970s. The Hunter is equipped with advanced features, including a 30mm cannon, a 76mm smoke grenade launcher, and an automatic target detection and

tracking system designed to enhance operational effectiveness. It is also capable of traveling at increased speeds and covering longer distances, making it a versatile asset for the SAF.

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Government to “carefully consider” Lee Hsien Yang’s demolition application for 38 Oxley Road

The Singapore Government will “carefully consider” Mr Lee Hsien Yang (LHY)’s application to demolish the house at 38 Oxley Road. LHY announced his intent on Tuesday morning following the recent death of his sister, Dr Lee Wei Ling, reaffirming his commitment to honour his parents’ wish for the house’s demolition.

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The Singapore Government has indicated that it will “carefully consider” Mr Lee Hsien Yang’s (LHY) application to demolish the family home at 38 Oxley Road.

LHY, the youngest son of Singapore’s founding Prime Minister, the late Lee Kuan Yew (LKY), announced his intention to apply for the demolition in a Facebook post on 15 October 2024, following the death of his sister, Dr Lee Wei Ling, on 9 October.

The announcement marks a significant development in the ongoing saga over the fate of the historically significant property, which has been at the heart of a family dispute since LKY’s passing in 2015.

In his will, executed in December 2013, LKY expressed his desire for the house to be demolished “immediately after” Dr Lee moved out of the property. Dr Lee, a prominent neurologist, had been the last remaining resident of the house.

LHY reaffirmed his commitment to carrying out his father’s wishes, stating, “After my sister’s passing, I am the only living executor of my father’s estate. It is my duty to carry out his wishes to the fullest extent of the law.”

He added that he would seek to build a small private dwelling on the site, which would be “held within the family in perpetuity”.

LHY also referenced his brother, Senior Minister Lee Hsien Loong’s (LHL) remarks in Parliament in 2015, when he was Prime Minister, stating that upon Dr Lee’s passing, the decision to demolish the house would rest with the “Government of the day.”

In response to media queries regarding LHY’s announcement, a spokesperson for the Ministry of National Development (MND) acknowledged the intended application and emphasised that the Government would “carefully consider issues related to the property in due course”.

The spokesperson also highlighted that any decision would need to balance LKY’s wishes, public interest, and the historical value of the house.

The house at 38 Oxley Road, where key decisions about Singapore’s path to independence were made, has been a focal point of public and political discussion.

The future of the house became contentious in 2017 when LHY and Dr Lee publicly accused their elder brother, LHL, of trying to preserve the house against their father’s wishes for political reasons.

LHL denied the accusations, issuing a Ministerial Statement in Parliament, where he also raised concerns over the preparation of their father’s final will. He clarified that he had recused himself from all decisions regarding the property and affirmed that any government action would be impartial.

In 2018, a “secret” ministerial committee, which was formed in 2016 to study the future of 38 Oxley Road, proposed three options: preserving the property and designating it as a national monument, partially demolishing the house while retaining the historically significant basement dining room, or allowing complete demolition for redevelopment. LHL accepted the committee’s conclusions but stated that no immediate decision was necessary, as Dr Lee was still living in the house.

In a statement conveyed by LHY on behalf of Dr Lee after her passing, she reiterated her strong support for her father’s wish to demolish the house. “My father, Lee Kuan Yew, and my mother, Kwa Geok Choo, had an unwavering and deeply felt wish for their house at 38 Oxley Road to be demolished upon the last parent’s death,” the statement read.

She added, “He had also appealed directly to the people of Singapore. Please honour my father by honouring his wish for his home to be demolished.”

Despite selling the house to LHY at market value in 2015, LHL’s stance regarding the house’s preservation became a public issue, especially after the family disclosed that the Government had raised concerns about reinstating the demolition clause in the 2013 will. The ministerial committee had reviewed the matter, but a final decision was deferred until now.

The fate of 38 Oxley Road remains to be seen, but the Government’s decision will likely have lasting implications for the legacy of the Lee family and the conservation of Singapore’s historical landmarks.

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