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Changes to Central Provident Fund schemes from 1 January 2006 - Singapore
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The Board of the Central Provident Fund (CPF) has issued a reminder of the changes to the CPF schemes which will take effect from 1 January 2006. These changes had been announced previously by the Government in 2002 and 2003.
From 1 January 2006, the CPF contribution rate for workers aged above 50 to 55 will be reduced by 3% from the current 30% to 27%. The employer contribution rate will be reduced by 2 percentage points from the current 11% to 9% and the employee contribution rate will be reduced by 1 percentage point from the current 19% to 18%. The reduction will come from the Ordinary Account. Contributions to the Special and Medisave Accounts will remain at 7% and 8% respectively.
The salary ceiling will be reduced from $5,000 to $4,500. This is the final step in the plan announced in 2003 to lower the salary ceiling so as to position the CPF system to cater to those earning up to the 80th percentile income.
With the lowering of the salary ceiling, the maximum amount of wages that will attract CPF contributions in 2006 will be $76,500. The maximum Additional Wages that will attract CPF is the difference between $76,500 and the total ordinary wages subject to CPF contributions for the year.
The maximum amount of CPF contributions a member may contribute for 2006 is revised downwards from $28,050 to $25,245. This amount includes both mandatory and voluntary contributions. No further voluntary contributions will be allowed once the member's mandatory contributions reaches $25,245.
...back to 15 December 2005
More information:
Recap - Upcoming CPF Changes From 1 January 2006
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