Unionists concerned about impact of lump-sum CPF withdrawal on workers

SINGAPORE — The Government’s consideration to allow lump-sum withdrawals from Central Provident Fund (CPF) accounts was an issue of concern for unionists attending a dialogue with Prime Minister Lee Hsien Loong yesterday.

In particular, they were worried about the impact such a move would have on low-wage workers and the amount of retirement savings they would be left with, union leaders told TODAY after the closed-door session.

“The unions felt that basically, CPF should be something that is used for the retirement needs of workers,” National Trades Union Congress (NTUC) central committee member Benjamin Tang told reporters. “By allowing (a lump-sum) to be withdrawn from the Minimum Sum, it will mean less for living expenses later on.”

The dialogue came after Mr Lee had announced several major adjustments to the CPF system at the National Day Rally on Aug 17. In his speech, Mr Lee said CPF members could soon have the option of making lump-sum withdrawals after they retire, with a possible cap of up to 20 per cent of their total CPF savings.

Responding to the concerns, Mr Tang said Mr Lee had reiterated the need for safeguards to ensure that workers have sufficient funds for retirement and assured the unionists that the CPF would still remain an institution that takes care of the retirement needs of workers.

About 550 union leaders, staff from NTUC and NTUC Social Enterprises, as well as representatives from various labour movement communities, attended the dialogue at NTUC Auditorium. Also in attendance were Manpower Minister Tan Chuan-Jin and Minister of State (National Development) Desmond Lee, who addressed some of the questions raised.

Other issues raised included the re-employment age of 65. The unionised sector said it intended to take the lead in encouraging firms to re-employ workers beyond the age of 65. At the same time, union leaders urged the Government to do the same for workers in the public sector.

They also hoped the Government would provide incentives for the private sector to re-employ workers over 65 years old on a voluntary basis, until the legislation to raise the re-employment age takes effect.

The dialogue also touched on the value of academic degrees, in the wake of the Applied Study in Polytechnics and ITE Review Committee’s recommendations to enhance the education and career prospects of non-graduates. NTUC central committee member Arasu Duraisamy said the Prime Minister had stressed that he was not discouraging people from obtaining degrees. Instead, he said people should pursue a degree that is relevant to a job. Mr Tang added that Mr Lee had said diploma holders could be as successful as degree holders and advised against pursuing degrees for the sake of doing so.