FLEXIBLE BENEFITS PLAN FOR CIVIL SERVANTS

Dr Kanwaljit Soin asked the Minister for Finance whether he will consider a flexible benefit plan for all civil servants instead of a fixed system of medical and other benefits.

Dr Richard Hu Tsu Tau: Essentially, a flexible benefits plan allows employees to choose from a menu of various staff benefits, based on their individual needs. The concept is new to Singapore. In a survey conducted last year by the National Productivity Board and the Singapore Institute of Labour Studies, about three-quarters of the companies surveyed indicated reluctance to introduce a flexible benefits scheme.

The main reasons cited for the reluctance were the lack of a model to follow, uncertainty in cost implications and a substantial increase in administrative workload. It is also necessary to mount a massive education exercise to explain the scheme to workers.

Although a flexible benefits scheme contains some attractive features, practical difficulties remain and its overall cost-effectiveness is unclear. However, the Member can rest assured that the Public Service Division keeps track of innovations in human resource management and will implement new schemes which are clearly useful and cost-effective.