PARLIAMENT

No plans to reduce rates for CPF contributions

Manpower Minister Josephine Teo has indicated that 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 employers, and with "fewer drawbacks". "For example, those who depend on CPF contributions to meet housing and healthcare needs can continue to do so.

"Singaporeans' ability to save for retirement is also not eroded," she added in her reply to Mr Seah Kian Peng (Marine Parade GRC), who 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 also argued that the JSS can target stronger support in sectors that are more affected by the Covid-19 outbreak.

Employers, she added, can also 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."

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" that 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.

Mr Ang Hin Kee (Ang Mo Kio GRC) asked about the employment status of overseas Singaporeans, and the support for them should they lose their jobs and return to Singapore to seek employment.

About 200,000 Singaporeans are based overseas.

Given the global impact of Covid-19, "we can imagine that some of them may face job losses", Mrs Teo said.

HELP FOR ALL SINGAPOREANS

As our citizens, they will always be welcome home. We will also do our best to help all Singaporeans, including those who return.

And whether they are fresh graduates or mid-career individuals, all the support systems and services will be extended to them.

MRS JOSEPHINE TEO, when asked about the support available for overseas Singaporeans should they lose their jobs and return to Singapore to seek employment.

"As our citizens, they will always be welcome home. We will also do our best to help all Singaporeans, including those who return.

"And whether they are fresh graduates or mid-career individuals, all the support systems and services will be extended to them," she added.

A version of this article appeared in the print edition of The Straits Times on June 05, 2020, with the headline 'No plans to reduce rates for CPF contributions'. Print Edition | Subscribe