Employer CPF Contribution Rate In Singapore To Go Up By 1%
Source: Government of Singapore Posted on: 2nd May 2010
Employer CPF contribution rate to go up by 1% to help workers build up retirement savings.
At the May Day Rally this morning, Prime Minister Lee Hsien Loong announced that the Government will raise the employers’ CPF contribution rate by 1 percentage point.
The increase will be done gradually in two steps to moderate the impact on employers.
The first 0.5 percentage point increase will be implemented on 1 September 2010, and be made into the Medisave Account (MA). The remaining 0.5 percentage point increase will be effected 6 months later on 1 March 2011, and will be made to the Special Account (SA).
Currently, self-employed persons (SEPs) with annual net trade income exceeding $6,000 are required to contribute to their MA. With the 0.5% increase in employer CPF contribution to MA, the Medisave contribution rates for SEPs will also be increased by 0.5% with effect from 1 September 2010.
Minister for Manpower Mr Gan Kim Yong said, “The 1% increase in employer’s CPF contribution is timely.
The increase, which will go to the Medisave and Special Accounts, will help Singaporeans save more for their medical and retirement needs. The Government’s phased approach also takes into account NTUC’s call as well as employers’ feedback.
I am heartened that employers have given their support for the move. Both employers and workers should see the CPF increase as part of the total wage package, while balancing overall competitiveness.”
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S'pore to raise employers' pension contribution by 1 pct Print E-mail
Sunday, 02 May 2010
Kevin Lim
Reuters
Bosses in Singapore will have to pay an additional 1 percent of salary to their employees' pension plan to raise the amount of savings available to people in their old age, Prime Minister Lee Hsien Loong said on Saturday.
He said employers face a 0.5 percentage point increase in their contribution to the Central Provident Fund (CPF) in September, with the other 0.5 percentage point rise taking effect in March 2011, according to local media reports.
Most Singaporeans are required to put aside 20 percent of their salary into the CPF, while employers are currently required to contribute an additional 14.5 percent on top of what they pay their staff. Employers' contribution to the CPF will rise further to 16 percent of salary if the economy continues to grow strongly in the next 1-2 years, Lee said at a Labour Day celebration, the Straits Times and Channel NewsAsia reported on their websites.
"When times were hard, workers made sacrifices to keep firms afloat. So in good times, it is fair to give back some to workers," the Straits Times quoted Lee as saying.
Singapore's economy grew by 13.1 percent in the first quarter from a year ago, helped by a recovery in manufacturing, and the government is projecting growth at 7-9 percent this year.
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CPF Contribution for Workers Raises in Singapore
Submitted by Senthil Kumar
Lee-Hsien-LoongAfter an impending wait, the Government, on the eve of May Day Rally in Singapore, finally announced to raise CPF contribution rate by 1% point. This would mean the employer’s contribution rate to go up by 14.5 to 15.5%.
In response to the recent labor movement that called for a reinstatement of employers’ CPF contribution rate to workers, this growth is a step taken by the Prime Minister Lee Hsien Loong to enhance the call.
But looking at the employers’ fear over the rise, P. M. said, “Employers understand that when times were hard, workers made sacrifices to keep firms afloat, so in good times, it is fair to give back some to workers”.
This noticeable change would be ramped in two phases. A 0.5% point increase for first six months to be paid into Medisave Account constitutes the first step of the year; and, the remaining 0.5% point increase affected in the later six months to be paid into the Specila Account is the second.
A constant improvement in the economy of Singapore would ensure CPF contribution target rate of 36% within next year, ensured P. M. Lee. Till then, the companies would be given a time to adjust to this change of high rating.
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