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New CPF rules for Singapore businesses
Late last month, the Singapore government has put forth new rules to govern how the Central Provident Fund (CPF), the largest emplyer-backed system of savings for retirement, housing, and health care, contributes. This move has been seen as a sorely needed push to keep the country's businesses competitive with other Asian nations.
Namely, the CPF contribution rate will be lowered from 36 to 33% come October 1, 2003, and a decreased CPF salary ceiling will go into effect January 1, 2004.
It remains to be seen how employers will handle the lower CPF contribution requirements. Struggling companies might feel it is a better solution than wage and job cuts. However, companies that are still profitable might encounter pressure to provide compensation to their employers through other means funded by CPF savings.
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