By MP for Hougang SMC, Png Eng Huat
[Delivered in Parliament on 12 Nov 2013]
I have 3 issues to raise on the Central Provident Fund (CPF) Amendment Bill.
Enhanced enforcement/penalties
First, I want to talk about the enhanced enforcement introduced under the repeal and re-enactment of section 61 of the Act.
The CPF holds the hard earned money of every working Singaporean. We depend on it for our housing, healthcare, retirement needs and more. It is thus imperative that the Government should do more to protect working Singaporeans from being shortchanged by errant employers by sending a clear message to these companies that non-payment, underpayment and even late payment of CPF contributions are not acceptable and repeat offenders will be taken to task.
It is good to know that the penalties for general offences for non-, under, or late payment of CPF contributions are finally brought in line with the Employment Act. There should be no distinction between the 2 components of a worker’s wage. Salaries and CPF contributions must be equally protected under the law. The introduction of a jail term and a minimum fine will certainly send a clear message that CPF contributions are non-negotiable.
Although there is a rise in the number of CPF arrears cases, I note that the amount of money recovered, excluding late payments, remains relatively constant despite the rise in the number of companies and employees involved each year from 2010 to 2012.
In 2011, there was a jump of 42 per cent from the previous year in the number of companies involved in underpayment or non-payment of CPF contributions and a corresponding spike of 67 per cent in the number of workers affected but the amount recovered by the board was unchanged at $9.5 million a year for 2010 and 2011. (2)
In 2012, the number of errant employers involved under the same offence went up by 8 per cent from the previous year and the number of workers affected increased by 10 per cent but the amount recovered actually came down slightly to $9.4 million.
These numbers are interesting as one would expect the amount of arrears recovered to go up proportionally to the number of offenders and affected workers. The 2 arrears cases cited by CPF in its press release in the last 2 years involved low-wage workers being owed CPF contributions for years and their arrears were substantial. The case cited by the Minister in his manpower blog in May this year is also quite similar and the amount recovered for that worker alone was $26,000.
Are these cases common or outlier? If these cases are common, it certainly did not reflect in the amount of CPF arrears recovered despite an annual increase in the number of companies and employees involved and the step-up effort by both MOM and CPF Board to bring about greater compliance with the CPF and Employment Acts over the past 3 years.
If these cases cited are outlier, what are the common cases of non-compliance? Are we seeing more new entrant low-wage workers being disadvantaged? Are we seeing more part-time or contract workers being shortchanged? I hope the ministry can shed more light on this. I also urge the ministry to share more examples of employers and their errant practices with the public so that workers in industries where violations are rampant can better understand their employment rights and get the necessary assistance.
It was also reported that the number of inspections will increase 10-fold from 500 inspections in 2012 to 5,000 this year. The Minister has shared that 800 inspections were already carried out from January to April 2013. Can the Minister share why there is such a drastic spike in enforcement actions? How many of the inspections were driven by complaints?
And what can the ministry do to remove the fear and protect workers who decide to come forward or whistle-blow? It was reported that a key component of WorkRight is confidentiality and the identity of anyone who files a complaint is kept strictly confidential. Has the assurance given rise to more complaints and enforcement actions in 2013?
Scope of inspectors’ powers
Second, the bill seeks to expand the scope of inspectors’ powers in obtaining information, documents or records in the course of an inspection.
I would like to ask the Minister about the safeguards put in to prevent inspectors from going overboard in carrying out their duties now that they are armed with expanded powers. What would constitute reasonable cause for an inspector to exercise the power conferred under the new Section 5 subsection (3A)?
Withdrawal frequency for CPF members above age 55
Third, I welcome the increase in withdrawal frequency for CPF members above the age of 55 but I am of the opinion that there is no need to empower the Board to assess such applications for withdrawal.
The amendment to Section 15 subsection (4) specifically deals with members who have already set aside the minimum sum so retirement adequacy is no longer an issue to these members. The member should be allowed to withdraw his CPF savings at any time if the need arises. What is the purpose of controlling the condition and frequency of withdrawal of a member’s CPF savings beyond the Minimum Sum after age 55?
We spend a lifetime building our CPF retirement fund. We certainly do not want to spend the remaining years of our life quibbling with the Government of the day on how to spend the rest of our hard-earned money after setting aside the Minimum Sum at age 55. Allowing the Board such broad power to impose conditions and restrictions on the withdrawal frequency of a member’s CPF account beyond what is legislated for retirement and medical use just doesn’t sound right.
I seek clarification from the Minister that the previous condition for further withdrawals from CPF by any member upon setting aside the Minimum Sum after age 55 will remain unchanged i.e. the member being unemployed for a period of 6 months immediately preceding his application for the withdrawal. This is because the Explanatory Statement accompanying the CPF Amendment Bill is not clear on this.
I also seek clarification from the Minister that the new section 15(4) would make the withdrawal of a member’s CPF savings beyond the Minimum Sum easier and not harder going forward.
Valuation Limit and Withdrawal Limit
One last point, I call upon the Ministry to relook into the Withdrawal Limit and Valuation Limit affecting some CPF members.
The Minister has said that “the number of CPF members who have reached their Valuation Limit and must use cash to service their housing loans is at less than half a per cent of members who are using CPF savings for their housing loans”. The question then is why would the Government want to impose so much anxiety and hardship on such a small group of HDB flat dwellers?
The Minister has also said in Parliament that “the Valuation Limit and Withdrawal Limit continue to serve an important purpose in ensuring that CPF members purchase a property which they can afford”. I am sure affordability was not an issue at the point in time when some of these members purchased their HDB flats but life is never certain. I hope the Minister can look into this issue and in the interim, exercise as much flexibility as possible to allow CPF members who have difficulties in servicing their housing loans in cash due to the Valuation Limit, to continue to drawdown on their CPF savings for housing loan repayments.
Conclusion
In conclusion, it is vital for the Government to ensure that the publicity of the WorkRight initiatives be sustained until such time when vulnerable groups like low-wage workers can fully comprehend their employment rights under the law and responsible employment practices can be a way of life in our society.