FINANCIAL SERVICES, HR & EDUCATION | Staff Reporter, Singapore

Government urged to hike CPF contribution rate for workers above 55 to 37%

It will ensure that older workers are paid the same as their younger colleagues.

The People’s Action Party’s (PAP) Seniors Group (PAP.SG) is proposing that the Central Provident Fund (CPF) contribution rate for workers aged 55 and above be increased to 37%, which is also the rate set for those 55 and below.

The move will reportedly enable older workers to enjoy the same level of CPF contributions regardless of how old they are, help to boost their retirement adequacy and ensure equal pay amongst colleagues doing the same job.

PAP.SG noted in its recommendation paper to the government that workers from age 55 and self-employed workers who do not contribute to their special account, struggle to save enough for retirement.

Also read: 6 in 10 Singaporeans eye financial support from CPF by age 62

“With longer life expectancy and a smaller base of family support, Singaporeans need to be even more self-reliant in securing a stream of lifelong income for retirement,” the group said in its recommendation paper. “This can be done through a combination of mandatory and voluntary CPF contributions, as well as sound financial planning.”

The group is also urging the government to continue strengthening its support for low-income seniors through the Workfare Income Supplement (WIS) scheme during their working years, and the Silver Support (SS) scheme to supplement the retirement income of seniors in need.

It further called for a Tripartite effort wherein employers collaborate with the government to create more suitable job opportunities for older workers across sectors such as transport, logistics and healthcare given that many older workers still want to continue taking on full-time jobs.

And given the government’s push for its population to be digitally savvy, PAP.SG recommended that authorities embed seniors’ needs and viewpoints into digital app designs and perhaps considering employing seniors into the app design teams to further facilitate and support their needs. 

Also read: Chart of the Day: Old age dependency ratio on the rise in Singapore

The paper outlined how a sizeable number of seniors are at risk of being left behind, and thus is calling for action to integrate the older generation with Singapore’s mobile-first generation.

“Many of our seniors are not averse to information technology, especially since Singapore has been promoting computerisation since the 1980s,” the group noted. “As such, we should carefully curate the services and features that our seniors truly need.”

Likewise, the group recommends that the Smart Nation and Digital Government Office (SNDGO) accelerate the digital outreach to seniors to cover most of Singapore within the next 12 months, especially through community centres, the national library and Senior Generation Office.

“Getting Singapore prepared for successful ageing requires long-term planning,” PAP.SG underlined in its recommendations. “Ultimately, we must endeavour to be the best place in the world to age in place.”

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