One of my employees turned 55 last month, and his employer’s Central Provident Fund (CPF) contribution rate dropped from 17 per cent to 14 per cent.

While giving him his pay, I realised that his total compensation had fallen because of this lower rate.

I gave him a raise to ensure his total compensation remained the same. It felt like the correct thing to do.

Still, it made me wonder why there is a need for the reduced employer’s CPF contribution just because the employee has reached a certain age. If an employee’s job scope, capability, attitude and performance remain the same, why should he be penalised?

I do hope that companies will make a concerted effort to ensure their older workers’ total compensation remains unchanged after the employer’s CPF contribution rate drops.

Ng Chee Siang