NTUC Assistant Secretary-General Zainal Sapari recently wrote a letter to the Straits Times Forum and mentioned how the Labour Movement represented the concerns of workers from all collars and ages in its proposals to the CPF Advisory Panel.
Specifically, he focused on how the proposals will help to benefit Low-wage workers.
One key point which the NTUC proposed was the further closing of the gap between the contribution rates of the workers in the 50 to 55 age band and the younger ones. This was concurred by the Panel which was set up by the Government to review the CPF system.
Another recommendation was the increment of contribution rates for workers aged above 55. This was also recommended by the CPF Advisory Panel to the Government.
As highlighted by Mr Zainal, these recommendations by the NTUC will greatly help low-wage workers to build up retirement savings as many of them are above 55 years old.
Wages and Retirement Adequacy
But the CPF retirement savings cannot come to fruition if income does not come into play.
In a media interview during his visit to Berlin, Prime Minister Lee Hsien Loong highlighted that how much people needed in retirement would depend on their incomes.
That’s where the Progressive Wage Model (PWM) launched by the NTUC comes into play. With the PWM, workers will not only stand to benefit from better skills, careers and productivity, but increased wages as well.
Mr Zainal in his letter also added, that to date, the PWM has helped to benefit 64,000 or more Singaporean and permanent residents from the cleaning and security industries.
Hence, an increase in wages will indirectly lead to an increase in retirement savings through the increased contribution rates in CPF.
This surely is a dual-win for low-wage workers who often lament that they do not have enough for retirement.