<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>No CPF advantage for PRs over S'poreans
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I REFER to the letter by Madam Lim Siew Imm ('CPF disadvantage', Dec 20), suggesting that CPF contribution rates for permanent residents (PRs) be pegged to those of Singaporeans. The employer's CPF contribution rates for a PR are 4 per cent and 9 per cent in the first and second years respectively after obtaining PR status. From the third year onwards, both the employee and the employer have to pay the full CPF contribution rates.
The phased increase in CPF contribution rates does not give the PR a competitive advantage. On the contrary, because of the employer CPF contribution, the employee may become more expensive to his employer when he becomes a PR. By phasing in the increase, the employer will have time to adjust to the additional CPF contribution to manage the impact on his overall wage cost. Likewise, the PR employee will also have time to adjust to the reduction in take-home pay as a result of his contribution to CPF.
To help Singaporeans and companies manage the impact of the economic downturn, the Government has already introduced a range of measures, including the Tripartite Guidelines on Managing Excess Manpower and the Skills Programme for Upgrading and Resilience (Spur). In this regard, there is no need to adjust the CPF contribution rates for PRs. We thank Madam Lim for her suggestion.
Julia Ng (Ms)
Deputy Director, Corporate Communications
for Permanent Secretary
Ministry of Manpower
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I REFER to the letter by Madam Lim Siew Imm ('CPF disadvantage', Dec 20), suggesting that CPF contribution rates for permanent residents (PRs) be pegged to those of Singaporeans. The employer's CPF contribution rates for a PR are 4 per cent and 9 per cent in the first and second years respectively after obtaining PR status. From the third year onwards, both the employee and the employer have to pay the full CPF contribution rates.
The phased increase in CPF contribution rates does not give the PR a competitive advantage. On the contrary, because of the employer CPF contribution, the employee may become more expensive to his employer when he becomes a PR. By phasing in the increase, the employer will have time to adjust to the additional CPF contribution to manage the impact on his overall wage cost. Likewise, the PR employee will also have time to adjust to the reduction in take-home pay as a result of his contribution to CPF.
To help Singaporeans and companies manage the impact of the economic downturn, the Government has already introduced a range of measures, including the Tripartite Guidelines on Managing Excess Manpower and the Skills Programme for Upgrading and Resilience (Spur). In this regard, there is no need to adjust the CPF contribution rates for PRs. We thank Madam Lim for her suggestion.
Julia Ng (Ms)
Deputy Director, Corporate Communications
for Permanent Secretary
Ministry of Manpower
