Singapore

No plans to reduce rates for CPF contributions: Josephine Teo

Manpower Minister Josephine Teo has indicated there are no plans to reduce Central Provident Fund (CPF) contribution rates amid the Covid-19 pandemic.

She also said the Jobs Support Scheme (JSS), which provides employers with wage subsidies, would reduce the cost burden for them, with "fewer drawbacks".

"For example, those who depend on CPF contributions to meet housing and healthcare needs can continue to do so," she said.

"Singaporeans' ability to save for retirement is also not eroded," she added in her reply to Mr Seah Kian Peng (Marine Parade GRC).

He had asked if there could be a temporary cut in the CPF contributions of employees and employers till after the economy recovers from the crisis.

The minister argued that the JSS can target stronger support in sectors more affected by the Covid-19 outbreak.

Employers, she added, can consider reducing non-wage costs, make use of the SkillsFuture Enterprise Credit to train workers and think about using the monthly variable component to adjust wages to save jobs.

"Nevertheless, we will continue to monitor and assess the situation, and consider whether other measures, including adjusting CPF contributions, may be necessary in the future," she said.

Responding, Mr Seah said that in the current economic climate, "every little bit we can put on the table for (employees) is something which would certainly help".

"I hope the minister will put (reducing CPF rates) as a high priority item - something to be activated sooner rather than later."

Mrs Teo replied that in the event of a CPF contribution cut, there is "very little likelihood" individuals can make up for what they were not able to grow in their CPF savings for retirement.

"So it is a decision we have to take very carefully... especially (as) our people will continue to live long lives," she said. - THE STRAITS TIMES

Employment