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20 Aug 2019  (700 Views) 
Prime Minister Office

Firms look to govt to help meet higher CPF contribution for older workers
I read a report that the firms are looking towards the govt to help meet higher CPF contribution for older workers. The govt announced that they will phase out the increase over 10 years. 

I suggest the following approach:

a) The govt should increase the employer's CPF contribution for older workers immediately to the same level as younger workers, i.e. 19%. Do not do it over 10 years.

b) The govt can give a subsidy to the firms for the difference between the current contribution and the increased contribution.  This subsidy can be reduced gradually over the next 10 years. 

The advantages of this approach are:

a) Employers have to deal with only 1 rate of CPF contribution for all employees, regardless of age.
b) The govt can work out the subsidy using the contribution data, and relieve this complicated from hundred of thousand employers.
c) The older worker enjoy the higher contribution rate immediately.
d) This imposes a higher cost to the govt, but it should be easily affordable.

I hope that PM Lee is listening.

Tan Kin Lian

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