Let's go back to 2006 and revisit this dumb decision. Because of this, older workers today don't have enough for retirement. Of course they have to restore lah! Oh yes, it's also election year!
The Board would like to remind CPF members of the following changes to the CPF schemes which will take effect from 1 January 2006. These changes had been announced previously by the Government in 2002 and 2003. The changes are summarised in Annex A for easy reference.
• LOWER CPF CONTRIBUTION RATE
FOR WORKERS AGED ABOVE 50 TO 55
From 1 January 2006, the CPF contribution rate for workers aged above 50 to 55 will be reduced by 3% from the current 30% to 27%. The employer contribution rate will be reduced by 2 percentage points from the current 11% to 9% and the employee contribution rate will be reduced by 1 percentage point from the current 19% to 18%. The reduction will come from the Ordinary Account. Contributions to the Special and Medisave Accounts will remain at 7% and 8% respectively.
The lower employer CPF contribution rate will enhance the wage competitiveness of older workers and help them be more employable. The reduced employee contribution will also help increase the take home pay of older workers. With this reduction, the plan announced in 2003 to achieve a 6% point difference in contribution rate between workers aged above 50 to 55 and younger workers will be completed.
CPF members aged above 50 to 55 who have difficulty meeting the shortfall in their monthly housing instalment as a result of the change in the CPF contribution rate will be allowed to use their Special Account savings to meet the shortfall.
The Board would like to remind CPF members of the following changes to the CPF schemes which will take effect from 1 January 2006. These changes had been announced previously by the Government in 2002 and 2003. The changes are summarised in Annex A for easy reference.
• LOWER CPF CONTRIBUTION RATE
FOR WORKERS AGED ABOVE 50 TO 55
From 1 January 2006, the CPF contribution rate for workers aged above 50 to 55 will be reduced by 3% from the current 30% to 27%. The employer contribution rate will be reduced by 2 percentage points from the current 11% to 9% and the employee contribution rate will be reduced by 1 percentage point from the current 19% to 18%. The reduction will come from the Ordinary Account. Contributions to the Special and Medisave Accounts will remain at 7% and 8% respectively.
The lower employer CPF contribution rate will enhance the wage competitiveness of older workers and help them be more employable. The reduced employee contribution will also help increase the take home pay of older workers. With this reduction, the plan announced in 2003 to achieve a 6% point difference in contribution rate between workers aged above 50 to 55 and younger workers will be completed.
CPF members aged above 50 to 55 who have difficulty meeting the shortfall in their monthly housing instalment as a result of the change in the CPF contribution rate will be allowed to use their Special Account savings to meet the shortfall.
