CPF CONTRIBUTIONS FOR OLDER WORKERS (Implication of changes)

Dr S. Vasoo asked the Minister for Labour (a) if he will state (i) the number of workers between 55 and 59 years and between 60 and 64 years affected by the recent changes in Central Provident Fund contributions for older workers and (ii) some of the long-term implications of these changes to both older workers and their employers; and (b) whether older workers will face any difficulties in their public housing loan repayments.

The Minister for Labour (Mr Lee Yock Suan): Mr Speaker, Sir, about 26,000 workers in the age group of 55-59 and another 13,000 in the age group of 60-64 will be affected by the changes in the CPF contribution rates for older workers. In total, about 49,000 active CPF members above age 55 will be affected.

The employer's CPF contribution rates for workers above age 55 will be lower than that for workers below age 55. The cost saving will encourage employers to employ older workers and facilitate the raising of the retirement age to 60.

On the other hand, the lower employee's CPF contribution rates will mean higher take-home pay for the older workers, thus providing an incentive for them to continue to work. With continuing employment, they will be able to save more and their old-age security will be better assured.

Most CPF members above age 55 have paid up their housing loans. Only about 6,500 workers above age 55 are still servicing housing loans. Most of them are at the tail end of their mortgage periods. As the changes to the CPF contribution rates for the older workers will be phased in gradually over three stages, there is some time for them to adjust. With their own contributions to CPF reduced, they will also be able to use their higher take-home pay to help service their loans.

For most older Singaporeans, the wider issue is whether there will be jobs after age 55. Without jobs, there will be no pay, let alone CPF to service housing loans.