Higher CPF rates for older workers: boon or bane?

 
Would higher CPF contribution rates help or hurt older workers?
Overall, is it timely to review the CPF scheme; what changes, if any, should be made?

THIS is a very good question because it cuts both ways. On one hand, the higher CPF contribution rates for older workers will certainly help to improve their financial well-being as people generally have longer lifespans now while the cost of living keeps going up. When employers hire or re-hire older workers, it is for the value they can bring, or for their contribution to the job at hand. Therefore, I do not believe that employers will be put off by the additional one to two-point rise in the CPF contribution.

That said, the reality is that this new measure would further increase the already high business operating costs that all firms are grappling with. This may be exacerbated by a psychological barrier: employers’ belief that an elderly worker may not be as productive compared to a younger, more able-bodied worker, so why should they pay more to hire them? These two points will discourage the employment of older workers.
 
Ronald Lee
Managing Director
PrimeStaff Management Services Pte Ltd