CIVIL SERVICE (Option of Central Provident Fund Scheme)

Mr Liew Kok Pun asked the Minister for Finance (a) what percentage of Division 3 and 4 officers in the Civil Service have not opted for the Central Provident Fund scheme and their reasons for not opting: and (b) whether there is any plan to extend the CPF option to other categories of officers in the Civil Service; if not, whether there are any special reasons for not extending it, and if so, what is the timeframe for implementation.

Mr Hon Sui Sen: Sir, 38% of all Divisions III and IV officers in the Civil Service have not opted for the Central Provident Fund Scheme. They have not been asked to give reasons for their decision but it is probable that they decided not to opt for the CPF Scheme for some or all of the following reasons. First, they did not want to suffer a drop in take-home pay. Second, they did not want to lose medical benefits given by Government upon retirement. Third, they were near to retirement and there was therefore no advantage or less advantage in opting for the CPF Scheme.

There is no firm plan as yet to extend to Divisions I and 11 officers the option to cross over to the CPF Scheme. Members may remember that the Prime Minister touched on this matter briefly on 17th March 1981 when he replied to questions from the Member for Punggol and the Member for Mountbatten following the Statement he made on the Revision of Salaries of Ministers, Chief Justice and other protocol office holders. The Prime Minister said then that for certain key jobs, like those held by Administrative Officers, we cannot afford to hire and fire. For such persons, a pensionable service is the only kind of service. He also indicated that to hold the loyalty of these officers, there would have to be regular adjustments of their salary and a decent pension. The Government is considering some suggestions to improve the Pensions Scheme. Until this matter is decided, it is best not to give any Service in Divisions I and II the option to cross over from the Pensions Scheme to the CPF Scheme so that the key Services will not feel disadvantaged.