THE planned rise in Central Provident Fund (CPF) contribution rates for senior workers in 2021 will be deferred by one year, to help businesses manage costs in these challenging times, Deputy Prime Minister and Finance Minister Heng Swee Keat said in Parliament on Tuesday.
Currently, workers' contribution rates taper after they turn 55. But at last year's National Day Rally it was announced that beginning in January 1, 2021, CPF contribution rates will be raised in stages for workers aged above 55 and up to the age of 70.
Those aged 60 and below will eventually have their rates raised by 11 percentage points to 37 per cent, the same rate as younger workers, and CPF rates will only begin to taper after the age of 60.
The first stage of this gradual increase will now be deferred to January 1, 2022.
The S$80 million CPF Transition Offset scheme, which was meant to offset half the increase in employer CPF contributions in 2021, will accordingly be deferred until after the higher contribution rates kick in, said Mr Heng.
He thanked the National Trades Union Congress and the Singapore National Employers Federation for supporting the deferment.