CENTRAL PROVIDENT FUND (AMENDMENT) BILL

[Mr N. Govindasamy in the Chair]

Order for Second Reading read.

The Minister of State for Labour (Mr Sia Kah Hui): Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the present proviso to subsection (2) of section 11 of the Central Provident Fund Ordinance (Chapter 150) as it stands allows the Board, where it has approved a member's withdrawal from the Fund, to credit interest to his contribution at the fixed rate of two and a half per cent for the year in which the withdrawal takes place, in spite of the fact that the rate of interest declared for the previous year is in excess of two and a half per cent. As the Board has declared interest at the rate of five and a half per cent per annum to members' contributions since 1967, the present proviso has been the subject of much criticism by contributors of the Fund, especially when they withdraw their contributions late in the year. To remove this manifestly unfair proviso, clause 2 of the Bill has been introduced.

This clause will enable the Central Provident Fund Board to compute interest payable to a member for the year in which he withdraws from the Fund at the same rate as that declared by the Board for the previous year.

Section 12 (2) of the C.P.F. Ordinance allows a member of the Fund who is not a Singapore citizen to withdraw from the Fund after he has left or is about to leave Malaya permanently with no intention to return thereto. As Malaya has been defined to include the States of Malaya, what is now West Malaysia, and Singapore, it has been felt that this section of the Ordinance is unduly restrictive and does not allow a member of the Fund who is a Malaysian citizen to withdraw from the Fund where there are good reasons for withdrawal, that is, when he wishes to go back permanently to his country of domicile. To overcome this restriction, clause 3 of the Bill has therefore been introduced to enable a Malaysian citizen to withdraw from the Fund if he has left or is about to leave Singapore permanently for the States of Malaya, that is West Malaysia, under such circumstances as are approved by the Minister.

Clause 4 of the Bill is introduced to facilitate administration of the Ordinance in connection with claims for withdrawal. Under subsection (1) of section 13 of the Ordinance, when a member who continues to be employed withdraws from the Fund, the contributions paid for the month in which the withdrawal is authorised and for the following month must be paid to him when they are received, although contributions for later months must be retained in the Fund until such time as the member is again entitled to withdraw.

The amendment to subsection (1) of section 13 by clause 4 of the Bill will enable the Board to finalise claims for withdrawal more quickly by giving it a discretion to leave all contributions received from the member after his withdrawal in his account until such time as he again becomes qualified to withdraw.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. -[Mr Sia Kah Hui].

Bill considered in Committee.

[Mr N. Govindasamy in the Chair]

6.00 p.m.

Mr Sia Kah Hui: Sir, may I seek your consent and the general assent of Members that notice be dispensed with in respect of amendments to clauses 1 and 2 and the new clause which is set out in the Supplementary Order Paper Supplement?

The Chairman: I give my consent. Is it the pleasure of the Committee that the amendments be moved and the new clause introduced?

Hon. Members indicated assent.

Clause 1 -

Mr Sia Kah Hui: Sir, I beg to move,

In page 1, line 4, to leave out from "shall" to the end of line 6 and insert "be deemed to have come into operation on the 1st day of January, 1971.".

Sir, the amendment now proposed is to make the Act effective from 1st of January, 1971, as this is considered to be the most convenient date for implementing the provisions of the Bill.

Amendment agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2 -

Mr Sia Kah Hui: Sir, I beg to move,

In page 1, line 7, to leave out from "the" to the end of line 8 and insert "Ordinance".

Sir, the amendment now proposed is consequential on a new clause which is to be inserted after clause 1.

Amendment agreed to.

Clause 2, as amended, ordered to stand part of the Bill.

Clauses 3 and 4 ordered to stand part of the Bill. New Clause - "Amendment Section 2 of the Central Provident of section 2. Fund Ordinance (hereinafter in this Act referred to as "the Ordinance" ) is hereby amended by deleting the definition of "wages" appearing therein and substituting therefor the following: - ""wages" means the remuneration in money, including any bonus, due or granted to a person in respect of his employment."." -[Mr Sia Kah Hui]

Brought up, and read the First time.

Mr Sia Kah Hui: Sir, I beg to move, "That the clause be read a Second time."

This new clause is to amend the definition of "wages" in section 2 of the Ordinance. As it stands at present, "wages" means all the remuneration in money due to a person in respect of his employment as an employee. In practice, this has been interpreted to exclude an ex gratia bonus from C.P.F, contributions. The new definition will make it' clear that all bonuses paid or granted to an employee will be subject to C.P.F, contributions.

Question put, and agreed to.

Clause read a Second time and added to the Bill.

The Chairman: It is intended that this new clause be inserted immediately after clause 1. Consequential amendments will be made to renumber clauses 2 to 4 as 3 to 5 respectively.

Bill reported with amendments; read a Third time and passed.