Updated: 05/28/2014 02:42

Senior Minister of State Heng Chee How says CPF contribution rates need to be updated



Senior Minister of State Heng Chee How says CPF contribution rates need to be updated

Senior Minister of State and Deputy Leader of the House, Heng Chee How, says CPF contribution rates need to be updated. 

"The current structure of rates was set in 2003, that's 11 years ago. The rates have either been reached or surpassed, it's a point the Labour Movement has made before, and we remain committed to the call to our tripartite partners to let's work together to update this."

Mr Heng was discussing CPF savings in parliament, in response to the issue of retirement adequacy as mentioned in the President's Address. 

Besides contribution rates, Mr Heng said perhaps the payouts for CPFLife annuities could be enhanced in sustainable ways. 

"One suggestion is for Government to consider future CPF top-ups and increases in contribution rates, if these were to come about, to prioritise the Special Account. Because that would then eventually convert into the retirement account. And an increased flow into and extra-preferential interest rates for Special Account savings will best enable the compounded growth of such savings."

He said the Labour Movement is helping workers earn more by pushing for the Progressive Wage Model, which in turn should increase their CPF savings. 

Another suggestion is to minimise bouts of unemployment through skills upgrading. 

He was convinced that raising the re-employment age from 65 to 67 was "do-able", so that workers would have additional years of income.

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