SINGAPORE CENTRAL PROVIDENT FUND (Legislation to increase rate of interest to contributors)

Dr Thio Chan Bee asked the Minister for Finance whether he is aware that the Federation Government has raised the rate of interest payable to contributors under the Federation Employees Provident Fund scheme from 2� per cent to 4 per cent, and whether he will consider introducing legislation to effect a similar increase in the rate of interest under the Singapore Central, Provident Fund scheme.

The Minister for Home Affairs (Mr Ong Pang Boon): Mr Speaker, Sir, as soon as the Government came to know of the Federation's move to raise the rate of interest payable to contributors of the Federation Employees Provident Fund from 2� per cent to 4 per cent, immediate steps were taken to direct the Central Provident Fund Board to look into the possibility of raising the interest rates in respect of Singapore.

The Central Provident Fund Board has considered the matter and has recommended that the Board is in a position to pay a rate of interest of more than 2� per cent, but the Central Provident Fund Ordinance has to be amended so that this could be put into effect. At the same time, the Central Provident Fund Board was also considering other proposed amendments to the Ordinance and it was decided that the Ordinance should not be amended piecemeal but should take into consideration all other amendments to the Ordinance at one time. The proposed amending Bill to the Central Provident Fund Ordinance has already been drafted and it will be introduced early in this Session.

Mr David Marshall: Mr Speaker, will the amending Ordinance make provision retrospectively for payment of the increased interest?

Mr Ong Pang Boon: No.

Mr David Marshall: Would the Minister consider, in fairness to the contributors and in view of the fact of the ability of the Board to make those payments and those payments being made by the Federation, that that provision should he made retrospective?

Mr Speaker: Order. That, of course, invites a debate, and I think the hon. Member for Anson will have the opportunity when the amending Bill comes before the House.