Updated: 11/12/2013 16:13 | By Channel NewsAsia
Employers who break CPF rules face heavier penalties under amended law
SINGAPORE: Parliament has passed changes to the Central Provident Fund (CPF) Act, allowing CPF members above the age of 55 the flexibility to make more than one withdrawal within the same birthday year.
The amount of money that the member may withdraw will still be based on the applicable withdrawal rules.
The amendments also pave the way for stiffer penalties, including a jail term for employers who do not pay, underpay or are late in contributing to their workers' CPF accounts.
More than 97 per cent of employers make their CPF contributions for their employees in a timely manner.
But while compliance is high, the concern is over the group of Singaporeans who have not received their due payments.
Acting Manpower Minister Tan Chuan-Jin said this group tends to be less educated and earning less -- the very group for whom the CPF scheme is meant to help.
Errant employers now face a jail term instead of just a fine.
First time offenders could be jailed up to six months, and the term will be doubled for subsequent offences.
Fines, too, will go up.
Instead of the previous S$2,500 maximum fine for a first offender, employers now face a maximum fine of S$5,000.
Fines will start from S$1,000.
Mr Tan said the changes send a clear signal to the small group of employers who take advantage of their workers by not paying their CPF contributions.
He said: "CPF for us in Singapore is a vital component of our social security system. Not only because it builds up retirement savings, but also (because) the government provides much of our assistance through the CPF system as well. Therefore, enforcement is crucial, making sure the system works is crucial -- not just ensuring employees have access to basic employment rights but also in bringing low-wage workers into the CPF system so that they, too, can benefit from the range of government assistance provided through this scheme." - CNA/gn
