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In deciding on the quantum and the pace of the increases,
we were mindful of the need to strike a balance between providing for better retirement adequacy,
and making sure that we do not raise wage costs to an extent where it affects the employability
of our workers and our businesses lose their competitive edge.
I thank Mr David Ong for his concern about the adequacy of retirement and healthcare
savings for our older workers, and for his suggestion that employers could contribute
even more to the retirement savings of their employees.
Raising employer CPF contribution rates further is one way to help provide better adequacy,
but it will have an impact on business costs and thus employment opportunities. I think
we have heard both sides of the issue aired during the Budget Debate. Any further increases in
our employer CPF contribution rates will have to be carefully considered by the tripartite
partners, and if deemed necessary, done in a calibrated and gradual manner.
More importantly, we have to keep at our efforts to improve the employability of our older
workers. The Government supports the employment of older workers heavily, especially the older
low-wage workers, through schemes like the Workfare Income Supplement (WIS) and the Special
Employment Credit (SEC).