NON-CONTRIBUTION TO CENTRAL PROVIDENT FUND

Mr John De Payva asked the Minister for Labour (a) whether his Ministry (i) will act upon anonymous complaints about non-contribution to the Central Provident Fund (CPF) by employers and (ii) will be aware of such non-contribution if no complaints are made; and (b) how his Ministry will deal with an employer who has not been contributing to the CPF for its employees for ten years.

Dr Lee Boon Yang: (a)(i) Anonymous complaints of non-contribution to the Central Provident Fund (CPF), will be investigated if the complainant provides sufficient information.

(a)(ii) Besides complaints, the CPF Board detects non-contribution of CPF through routine checks. Each month, the Board goes through the list of employers to see who had stopped making CPF contributions or contribute much lower amount of CPF in that particular month. The Board would then determine the cause for such variations and take appropriate actions where required. Furthermore, the Board conducts monthly spot checks on employers to see if they have paid their CPF correctly and promptly. The Board also closely monitors employers who are habitually late in their CPF payment. These measures enable the Board to protect CPF members' interest.

(b) Should an employer succeed to avoid CPF contribution for a long period, he will be required to back-pay the CPF contributions due, with heavy penalty interest of 18% per annum imposed. In addition, the employer will not be allowed to claim from the employee the employee's share of the contributions, ie the employer has to bear the full 40% CPF contribution. If he fails to pay up, he will be brought to Court. If he fails to comply with the Court Order, his business assets may be seized or his business wound up.