LONG-TERM RATES OF CPF CONTRIBUTION FOR PENSIONABLE EMPLOYEES IN THE PUBLIC SECTOR

12.27 pm

Mr Lee Yock Suan: Mr Deputy Speaker, Sir, on the 28th July this year, I informed this House about the long-term target CPF rates which are applicable to the private sector as well as non-pensionable public sector employees. The Government has since decided on the long-term rates for pensionable employees in the public sector.

Prior to the CPF cut in April 1986, the employer's CPF rate for pensionable employees in the public sector was 15%. This was 60% of the private sector rate of 25%. After the CPF cut, the employer's CPF contribution rate for pensionable employees was reduced to 6%. This is 60% of the private sector rate of 10%. The Government has decided to set the long-term rates for pensionable employees at 60% of the rate for each respective age group in the private sector. The current relativity in CPF contribution rates between pensionable public sector employees on the one hand and private sector employees as well as non-pensionable public sector employees on the other will thus be maintained.

The target total contribution rate is therefore 24% for pensionable employees below age 55, 15% for those aged 55 to 59, 9% for those aged 60 to 64 and 6% for those 65 years old and above.

I now ask the Clerk of Parliament to distribute an Annex (Cols. 53 - 54) which shows the target CPF rates for pensionable public sector employees. For comparison, the already announced long-term CPF rates for employees in the private sector are also given in the Annex. [Copies of document distributed to hon. Members.] Annex - LONG-TERM CPF RATES FOR PENSIONABLE PUBLIC SECTOR EMPLOYEES, LONG-TERM CPF RATES FOR PRIVATE SECTOR AND NON-PENSIONABLE PUBLIC SECTOR EMPLOYEES (Cols. 53 - 54)

Adjusted rates of contribution for pensionable employees in the transitional years will also be pegged at 60% of the adjusted rates for employees in the respective age groups in the private sector.