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| CPF changes in brief |
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| Deferring the CPF Restoration |
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To help Singaporeans save their jobs, the current CPF contribution rate of 36% will stay for another two years. As companies are assured that their business costs are not going up, they are less likely to retrench workers or move out of Singapore. They may even hire more workers when the economy improves.
The rate will be restored progressively to the full 40%, although the pace and timing will depend on prevailing economic conditions.
Lower salary ceiling
The salary ceiling will be reduced in two phases over the next two years. The current salary ceiling of $6,000 for private sector employees will be lowered to $5,500 in January 2004, and further to $5,000 in January 2005.
| CPF Salary Ceiling |
Current |
From 1 Jan 2004 |
From 1 Jan 2005 |
| Private Sector |
$6,000 |
$5,500 |
$5,000 |
This change is not meant to be a wage cut. Employers are encouraged to pass on part of their cost savings to deserving workers through the variable component of wages, such as bonuses or other variable payments. This will depend on the circumstances of each company and the contribution of each worker.
Lower CPF contribution rates for workers aged 50-55
The employee contribution rate for workers aged 50-55 will be lowered from the current 20% to 18% in January 2004 and further to 16% in January 2005.
| CPF Rates |
Current |
From 1 Jan 2004 |
From 1 Jan 2005 |
| Employer Contribution Rate |
16% |
16% |
16% |
| Employee Contribution Rate |
20% |
18% |
16% |
| Total CPF Contribution |
36% |
34% |
32% |
The employer contribution will be maintained at the current level, to boost the long-term employability of older workers. Lowering the employee contribution rate will enable older workers to take home more of their pay. This will help them when their companies phase out seniority based wage structures.
Higher contribution rates to Special and Medisave Accounts
To ensure that Singaporeans have enough savings for retirement and healthcare, the contributions to the Special and Medisave Accounts will be increased.
| CPF Rates |
Current |
From 1 Jan 2004 |
From 1 Jan 2005 |
From 1 Jan 2006 |
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For workers aged 35 years and below |
| - Special Account |
4% |
5% |
5% |
5% |
| - Medisave Account |
6% |
6% |
7% |
7% |
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For workers aged above 35-45 years |
| - Special Account |
6% |
7% |
7% |
7% |
| - Medisave Account |
7% |
7% |
8% |
8% |
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For workers aged above 45-50 years |
| - Special Account |
6% |
7% |
8% |
9% |
| - Medisave Account |
8% |
8% |
8% |
9% |
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For workers aged above 50-55 years |
| - Special Account |
6% |
7% |
8% |
9% |
| - Medisave Account |
8% |
8% |
8% |
9% | |
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| E-submission saves time for Sizzler |
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Mr Ang Chor King, Chief Operations Officer of Sizzler Steak Seafood Salad (S) Pte Ltd, read about the Board’s e-submission service on Business News and decided to convert. He shares with us his reasons for doing so. He said, “When I read about e-submission, I thought that it would be a more convenient way of submitting CPF contributions. It would also reduce our paperwork.”
His Payroll Manager, Ms Ang Keng Sim, has the evidence to prove it. She has been e-submitting CPF contributions for their 93 employees for the past five months and is happy with the service. She said, “E-submission is fast and convenient. In fact, e-submission is five times faster than using the hardcopy Payment Advice! I just need to click and it is done!” Mr Ang added, “In the long run, we enjoy significant time and manpower savings as we need to submit CPF every month.” |
| Mr Ang Chor King switched to e-submission for convenience and to save time. |
Ms Ang also appreciates the value-added features of e-submission, such as being able to check the submission status. She said, “E-submission allows me to enquire the submission status through the Internet without having to make a trip to the CPF Board. This is something that I can’t do with the hardcopy Payment Advice.”
And would Mr Ang and Ms Ang recommend the service to other employers? They said, “Yes, e-submission is definitely a better way to submit CPF.”
So what are you waiting for? Switch to e-submission now! We have different services under our CPF PAL-Internet (Employer Returns) service for employers with different needs. Visit our website www.cpf.gov.sg for more details. |
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| Did you know? |
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More and more employers are going “e”. There were 8,490 employers who were e-submitting as at December 2002, as compared to 6,467 employers at the end of 2001. This is a 30% increase in the number of employers on e-submission. About another 700 employers have signed up for e-submission in the first three months of 2003. Join them by going “e” now! |
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Save when you e-submit!
E-submission is a simpler, faster and more secure way of submitting CPF contributions. More importantly, you will save yourself the processing fee when you e-submit.
Employers with 100 or more employees will have to pay a processing fee of $7 per employee per month if they use the manual payment advice to submit CPF contributions. The fee will apply to contributions for April 2003 onwards. It will help the Board to offset the cost of having to maintain a manual processing system for manual payments. Employers with fewer than 100 employees may also have to pay a processing fee in time to come. | |
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| mPAL wows employer |
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The mPAL is a trial service that allows employers to submit CPF contributions using a mobile phone. Specially designed for employers with one to 10 employees, it allows employers to submit their CPF contribution details in three easy steps. Payment will also be deducted electronically, through GIRO. An employer shares his experience with mPAL.
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Mr Edward Chan was one of the first employers to sign up for the mPAL trial in November 2002. He said, “I signed up because of my curiosity about innovative projects such as the mPAL. I will support those that deserve recognition.”
Mr Chan is the Managing Director of Metal Treatment Technology (Singapore) PL. His company’s businesses include chemical manufacturing and providing chemical cleaning services. He has not looked back since he started using the mPAL.
He said that it is a useful service, especially for small businesses, “The mPAL is a much better way of submitting CPF as compared with the conventional Payment Advice submission. For small businesses like ours, we often have to multi-task, and time efficiency and management is very important.” |
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| Multi-taskers like Mr Edward chan benefit from mPAL's portability. |
One of the key benefits of the mPAL is its portability. Mr Chan said, “With mPAL I enjoy time savings and flexibility of where and when to submit CPF. The mPAL is portable, so CPF submission can be done any time, anywhere, e.g. at home, whilst waiting for appointments, in lounges, etc.”
Submitting CPF for his 10 employees has never been easier. He said, “There is less paperwork and I don’t have the problem of searching for the hardcopy Payment Advice. There is no need to rush back to office to ‘finish up’ the submission.”
He has also enjoyed peace of mind ever since his switch to mPAL. “There is no need to dash down to the CPF Board, especially on the last day of submission. There is also no need to send someone down to the post office just to mail the Payment Advice. mPAL is so simple, and easy to track, I am assured that I can do my submission just before the deadline!”
Mr Chan, who finds electronic transactions a boon noted, “In a society blessed with advanced and sophisticated electronic equipment and technology, it would be absurd if we continue to submit CPF using the conventional pen-and-paper method. In fact business transactions in general should be done through electronic means.” |
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| Nokia 7250 now available for mPAL trial! |
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| The new and funky Nokia 7250 is now available for the mPAL trial. Other models are the Nokia 7650, Nokia 6100, Nokia 6610 and the Sony Ericsson P800. Visit our website www.cpf.gov.sg for more information. To sign up, email us at Er-Con@cpf.gov.sg or call 6229 3195 or 6229 3847. |
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