CENTRAL PROVIDENT FUND SAVINGS

Mdm Claire Chiang See Ngoh asked the Minister for Manpower, in our overall effort in promoting life-long learning and letting individuals decide their own career changes, whether he will allow the cost of continuing education to be drawn from Central Provident Fund savings even if the training courses are not what his Ministry considers critical for the new economy.

Dr Lee Boon Yang: The primary objective of the CPF is to help members save enough for their old age. At the long-term CPF contribution rate of 40%, CPF members will only have enough savings to pay for a home, hospitalisation expenses and basic old age needs. In fact, the Inter-Ministerial Committee on Ageing Population pointed out that CPF members should set aside more savings for old age and it is for this reason that the Government has decided that the Special Account allocation rate should be raised to 4%-8%, depending on the age groups.

Workers who need to upgrade their skills, have many opportunities to do so with the support from their employers, the Skills Development Fund (SDF) and the Skills Redevelopment Programme (SRP). Employers who send their workers for training and upgrading courses certified under the SRP are eligible to claim subsidy of up to 70% of their absentee payroll, and 80% subsidy from the SDF on course fees. Individuals who take up training courses to upgrade themselves through their unions or the self-help groups can also enjoy the training grant of 80% from the SDF.

In addition, the Government has committed $500 million into a Lifelong Learning Fund to help workers upgrade their skills and seek further training. This fund will be eventually increased to $5 billion. For individuals who pursue courses on their own, the Government also grants them a tax relief of up to $2,500 of course fees.

In view of the above, we believe it would not be appropriate to allow CPF members to use their CPF savings for continuing education and training.