Before the Budget Announcement on the 21st of February 2014, the Labour Movement has set out a wish list, specifically in area of CPF contribution rates for elderly workers. Labour MP Heng Chee How unveiled the details of what is being called for and why.
1. Raise the contribution rates of workers aged 50 to 55 by between one and two percentage points to equalise to that of younger workers.
The Government committed two years ago to equalise the CPF contribution rates of workers who are aged 50 to 55 over the longer term to match those of younger workers. With workers in this age group being just as productive, they should be treated with equal fairness to younger workers.
2. Review CPF contribution rates and ceiling where contributions by employers and employees could move progressively towards parity with every age band.
The last time CPF rates were reviewed was in 2003. Since then, contribution rates have either met or surpassed the targets set that year across age bands. It is time to review the rates again taking into account longer life expectancy and rising healthcare costs.
3. For employers contributions to increase more than employee’s contributions.
With current employer contribution rates lower than employee contributions across all age bands, it would be fair for employer’s contribution to increase.
4. Any increase in employee’s CPF contribution should go into their Ordinary Account
Singaporeans are starting families at a later age, leading ti them having obligations such as mortgages and tertiary education fees later in life. Cash flow is also a consideration for workers. Employees should be able to use the money in their Ordinary Accounts to service these obligations.