The Snitch

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Will CPF rates get cut again?

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As Singapore heads into an economic downturn,  will the government slash CPF wages in a bid to keep people in their jobs?

According to a Reuters report:

Singapore will convene its National Wages Council (NWC) in early January, four months ahead of schedule, in what economists say may be a prelude to a cut in employers’ pension contributions.

‘Given the weakening economic situation, there is a need for the NWC to take stock of the new situation and review its May guidelines to help companies and workers manage the downturn,’ the Manpower Ministry said in a statement on Tuesday.

The ministry did not immediately respond to questions about the detailed agenda for the NWC’s January meeting.

‘At the last crisis, they cut the CPF (Central Provident Fund) and I won’t be surprised if they did it again,’ said Joseph Tan, Singapore-based Asia chief economist for private banking at Credit Suisse.

‘Between cutting wages and letting people go, the government’s preference is to keep jobs.’

The government last cut employers’ contributions to the CPF, the retirement fund for Singaporean workers, by 3 percentage points to 13 percent in October 2003 to help firms cope with the effects of the SARS outbreak.

Do you think CPF wages will be slashed from the current 14.5% to 13% (of the SARS period)? Will this help keep jobs or do we need another alternative?

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Written by Human Resources

December 18, 2008 at 8:54 pm

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