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  Singapore Employment Environment - Update  
     
 

1. CPF Cut
From January 1 1999, the employer's CPF contribution rate is cut by 10%. The cut is one of the cost cutting measures announced by the government. The table below shows the new CPF contribution rates by both employers and employees.

Age of Employee (in years)
Contribution by Employer (%)
Contribution by Employee (%)
Total
55 years and below
10
20
30
Above 55 but not more than 60
4
12.5
16.5
Above 60 but not more than 65*
2
7.5
9.5
Above 65*
2
5
7

Note:
The rates are for employees whose total wages exceed $363 per calendar month.

*The government has announced that the employers' contribution rate for employees above 60 years of age will be reduced to 4 per cent on 1 January 1999 when the retirement age is raised from 60 to 62. With the 10 per cent point cut, the employers' contribution rate for these employees will correspondingly be reduced to 2 per cent.

2. Exemption from Retirement Age Act
From January 1 1999, the minimum retirement age for employees in Singapore is raised to 62.

As such, The Retirement Age (Exemption) Notification has been amended with effect from January 1 1999. The new categories of persons exempted are:

  • a person who, on or at any time after January 1 1997 but before January 1 1999, has retired at 60 years of age or above and has been re-employed by the same or another employer;
  • a person who, being a person exempted under any provision in the Notification, has or has been lawfully retired before or after January 1 1999 before attaining 62 years of age, or who has resigned or whose service has been terminated for any reason before or after that date, and who has been re-employed by the same or another employer at 55 years of age or above; and
  • a pilot who holds any license issued under the Air Navigation Order.

3. CPF & Other Funds
From January 1 1999, the rate of interest per annum payable on contributions to the CPF is 4.41% for the Ordinary and Medisave Accounts, and 5.91% for the Special and Retirement Accounts.

Following the raising of the retirement age from 60 to 62 years, the age requirement which entitles CPF members to withdraw their minimum sum is also amended to 62 years. CPF members who attain the age of 55 years on or after January 1 1999 will also start receiving their minimum sum monthly maintenance payments when they reach the legislated retirement age, which is now 62 years of age.

 
 


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