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1.61 Firstly, we will phase in the reduction
in the CPF salary ceilings. The ceiling is currently
$6,000 for private sector employees. This will
be lowered to $5,500 in January 2004, and further
to $5,000 in January 2005. The civil service will
also rationalise the salary ceilings of the public
sector to match that of the private sector, including
the pensionable officers who have lower CPF contribution
rates.
Table 1: Lower CPF Salary Ceilings for
Employer Contribution
 |
|
Private Sector
|
$6,000
|
$5,500
|
$5,000
|
|
Public Sector (Non-Pensionable)
|
$7,000
|
$6,000
|
$5,000
|
|
Public Sector (Pensionable)
|
$9,333
|
$8,000
|
$6,667
|
1.62 This change will refocus the CPF scheme
on the basic needs of the majority of the population,
rather than the higher income earners who are
better able to plan and provide for their future
financial needs. It is not, however, intended
as a wage cut. As recommended by the ERC, I encourage
employers to pass on part of their cost savings
to deserving workers through the variable component
of wages, such as bonuses or other variable payments.
This will depend on the circumstances of each
company and the contribution of each worker.
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