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Oral Answer by Mr Tan Chuan-Jin, Minister for Manpower, to Parliamentary Questions on AGO Finding About CPF For NS Men

Notice Paper No. 224 Of 2014 For The Sitting On 4 August 2014 Question No. 127 For Oral Answer 

MP: Dr Chia Shi-Lu

To ask the Minister for Manpower in light of the Report of the Auditor-General for FY2013/14 on the Ministry's failure to detect underpayment of CPF contributions over a period of ten years to a company's employees who performed National Service (a) whether the system for detection will be improved; (b) how will this be done; and (c) when will the new detection system be activated.

Answer

  1. CPF Board has several measures in place to ensure the timely and accurate payment of CPF contributions. This includes an automated system to detect late payments, as well as pro-active audits on employers. CPF Board cannot carry out its audits exhaustively on each and every one of the 140,000 employers on a yearly basis. As with every system targeting such a large number of companies, we take a risk-based approach, targeting our enforcement effort at higher-risk industries and firms, and complementing it with investigations on complaints lodged by employees or whistleblowers. Through this approach, in 2013, CPF Board recovered $420 million in late, under- and non-payment of CPF contributions for more than 250,000 workers.
  2. CPF Board’s audit checks include CPF contributions for NSmen make-up pay. Among the reasons for underpayment or non-payment of CPF contributions, errors made on NSmen make-up pay contribute a relatively small factor.
  3. We take the AGO’s findings very seriously. CPF Board has strengthened its audit process to better detect employer CPF liabilities arising from NS make-up pay. It now further requires employers to declare which of their employees have gone for reservist training and provide supporting documents, including an acknowledgement from MINDEF on the NS make-up pay amount.
  4. CPF Board will also work with MINDEF to educate and remind employers that they are required to make CPF contributions for the period that their employees are on NS training.