Speech by Mrs Josephine Teo, Second Minister for Manpower, at Committee of Supply 2018

1. Mr Chairman, I will be sharing what more MOM is doing to help Singaporeans have better jobs, better employment outcomes, better protection and better retirement adequacy. Let me start with better jobs.
2. Given that our workforce growth is slowing, our businesses have to become more manpower lean. At the same time, businesses may need to redesign jobs to support an ageing workforce or be more attractive to local jobseekers, who now have higher aspirations.
3. MOM together with several sector lead agencies are helping businesses transform through the Lean Enterprise Development (LED) Scheme. Ms Jessica Tan asked about its effectiveness. Since its launch in October 2015, we have built up good momentum. We have helped about 6,700 companies, which is three times the number a year ago. They come from all sectors and are of all sizes.
4. One interesting project was undertaken by the Gratify Group, a company which owns many different F&B brands. The owner, Frank Lau, wanted to make sure that his company's expansion plans would not be held back as a result of a lack of manpower. Hence, when conceptualising its new brand which is called "Omoomodon", he set himself a challenge that every outlet must be able to operate with just three staff per shift, when most similar concepts needed at least five staff per shift.
5. In the F&B business, what Frank wanted was certainly a tall order. Please pardon the pun. But Frank believed that he needed to push the boundaries to have any chance of scaling the business in a sustainable way. He engaged the Singapore Productivity Centre to re-design his workflow and processes. They started with the menu, with food preparation very much in mind. They studied operational flows at many food outlets and collected data on time-consuming tasks. The end result included a central kitchen, self-service ordering and payment and optimised kitchen designs. Staff were also crossed-trained to prepare food and attend to customers.
6. The improved job scope resulted in better pay and higher retention. Salaries offered by Omoomodon are on average 15% higher than market rate, there is lower attrition as workers are more motivated to stay. Thanks to these measures, manpower required for each new outlet was reduced by up to 60%.
7. This example shows how transformation is possible. The LED Scheme supports all of the firms. It provides a "one-stop" service for businesses, especially SMEs, to access schemes offered by different Government agencies, without having to figure out where and who to approach for what.
8. However, not all transformations need customised solutions like Frank did. Many businesses will benefit just adopting ready-to-go productivity solutions. For example, the Smart Management & Tracking System (SMTS). Using RFID technology to manage, track and audit assets to reduce stock taking time, the companies can enjoy considerable productivity improvement. It is useful for nearly all businesses in manufacturing and retail.
9. There are now more than 40 ready-to-go solutions pre-approved by Government agencies such as SPRING Singapore, A*STAR and IMDA. These ready-to-go solutions have been tried and tested, so there is no need for businesses to worry about ineffective solutions, or fly-by-night vendors.
10. Through the LED Scheme, we aim to make technology and innovation pervasive, not only at the enterprise level, but also at the industry level to quicken the pace of transformation, and not just in one or two sectors but across all 23 ITM sectors.
11. For instance, under the Lean Hotel Initiative, 16 hotels came together to collectively identify gaps and design industry solutions. In just four months, the hotels had achieved productivity savings of between 4.5% and 28%, without having to compromise service quality.
12. We also plan to go beyond the ITMs to non-ITM sectors, and are in discussions with several industries such as furniture, farms, lifts and escalators to support their transformation.
13. Mr Chairman, as businesses transform and jobs become better, so too must workers adapt. This is how we can achieve better employment outcomes. As mentioned by Minister Lim, the Adapt and Grow initiative helped place more than 25,000 jobseekers into new jobs and careers in 2017, about 20% more than in 2016.
14. Broadly speaking, we aim to help both missed matches − where employer and jobseekers have not found each other, and mismatches − where there are skills or wage gaps that make it hard for the jobseeker to secure a job.
15. Of the 25,000 jobseekers placed, about 60% involved missed matches. The jobseekers were job-ready but somehow missed finding the right employers. Workforce Singapore and NTUC-e2i helped them to find a match.
16. Mr Patrick Tay and Mr Chong Kee Hiong asked for an update on our efforts to strengthen job matching through the national Jobs Bank. We are transforming Jobs Bank into a new platform called MyCareersFuture.
17.  MyCareersFuture will have new features to help jobseekers and employers find better matches. It will have intelligent job matching, and can recommend jobs to jobseekers that would best fit their skill sets. It will also highlight jobs that are supported by Adapt and Grow programmes such as the Professional Conversion Programmes, to help bridge job and skill mismatches.
18. MyCareersFuture has been up and running since 2 January this year and the portal will be officially launched in the second quarter this year.
19. Besides reducing missed matches, we helped to close skills or wage mismatches. Of the 25,000 jobseekers placed, 40% involved jobseekers with some form of mismatch. This proportion has grown significantly from just 25% in 2016.
20. Placements of mismatch cases doubled from about 5,000 in 2016 to about 10,000 in 2017. This reflects our more intensive efforts to address mismatches. As our economy restructures, job-skills mismatch will be a growing challenge. They can be very unsettling for individuals who have lost their jobs or are at risk of retrenchment. This is why our key focus has been to step up support for jobseekers with skills or wage mismatches, because they need more help. Last year, we strengthened support under the Professional Conversion Programme (PCP) and Career Support Programme (CSP).
21. Assoc Prof Faishal Ibrahim, Mr Low Thia Kiang and Dr Intan asked how effective MOM’s efforts have been in helping the long–term unemployed, older workers and mature workers.
22. If Members recall, the CSP provides a wage subsidy that helps to close the gap between what PMET jobseekers expect and what employers are prepared to offer.
23. With the enhanced wage support under CSP, placements have quadrupled from about 260 in 2016 to over 1,100 in 2017. Among the CSP placements, more than 80% were long-term unemployed. The retention rate of those placed has been encouraging. Within 12 months of placement, about 70% of those placed in 2015 and 2016 have remained in employment.
24. Besides CSP, we also raised the salary support caps of PCPs. PCP placements in 2017 were almost three times that in 2016. In particular, the proportion of mature PMETs, especially those who are 50 years old and above, has more than doubled.
25. Similarly, the proportion placed in mid-level jobs paying $4,000 or more has also doubled. Ms K Thanaletchimi would be happy to know that overall drop-out rates for PCPs are low − more than nine in 10 participants complete the programmes.
26. Even in the healthcare sector which has a longer training period for PCPs, almost nine in 10 have successfully completed the programmes. For the minority who drop out, most have personal reasons, or find it challenging to adapt.
27. We have worked with MOH to reduce the duration of some PCPs, such as nursing, without compromising the quality of training. More importantly, we need to strike a balance between stringent criteria and processes to screen individuals, and giving jobseekers sufficient opportunities to start new careers.
28. One person who has started a new career is Mr Soon Sie Chye who is 44 years old. After graduating with a degree in Electronic and Electrical Engineering from Loughborough University, Sie Chye spent the early part of his career working as an engineer. More than 10 years ago, he made a career switch to join the banking sector, where he had a fruitful career, leading back office teams in different banks.
29. However, he always had a lifelong dream to set up his own business. In 2014, he took the plunge, but in less than two years the venture failed, and he became unemployed for more than a year. It was a challenging and stressful period as he just had a newborn. During this period, the family had to depend on wife's income and their savings, while he soldiered on in his job search.
30. Sie Chye came across South Island Aquarium, a company specialising in imports and exports of aquatic plants and ornamental fish. Although he had to take a pay-cut, Sie Chye was keen on the role as he felt the company had good potential and was excited by its expansion plans. The company was also keen to tap on his MNC and management experience.
31. To better prepare for his role as a Business Manager, Sie Chye was enrolled in the PCP for International Trading Executives. This is a one-year programme to bridge skills gaps in supply chain, trade finance and e-commerce. He is now five months into the PCP.
32. Mr Low Thia Khiang asked about the long term unemployment situation. In fact, Sie Chye is one of the more than 6,600 individuals previously unemployed for at least six months, which is the definition of long-term unemployed, who found a job through the Adapt and Grow initiative.
33. This is a 25% increase in the number of long-term unemployed placed compared to 2016. They account for close to 50% of unemployed jobseekers placed through Adapt and Grow when all the different programmes are combined. Realistically, not all of the long-term unemployed jobseekers will succeed in the new jobs that we help match them to.
34. But we are prepared to take some risk, through support programmes, to help them get on their feet. Otherwise, we risk the pool of long-term unemployed getting bigger and their families falling deeper into difficulties.
35. Today, with a growing economy and these programmes in place, the long term unemployment rate for local PMETs has improved from 0.9% in 2016 to 0.7% in 2017. However, compared to a few years ago, the resident long-term unemployment rate remains slightly elevated. But, it is not at its highest, contrary to what Mr Low Thia Kiang thinks.
36. Nevertheless, we believe there is still much more to do. Besides helping those already unemployed, like Sie Chye, we are also helping those at risk of displacement.
37. One such example is Mr Vincent See. Vincent had spent majority of his career performing IT support in the hospitality sector. However, when he saw his company restructuring to cut costs, he thought he should make plans. Although worried that he could not adapt at his age – he is 51 years old – Vincent also saw an opportunity to learn something new.
38. Given the strong growth of e-commerce, he saw logistics as a growth sector and signed up for the Attach and Train programme for Logistics Executives.
39. Unlike the usual PCPs, the Attach and Train programme does not guarantee a job at the start. This is because some sectors or employers are growing but are not yet ready to hire more. But rather than to wait, the programme helps jobseekers like Vincent build up their CV to be ready for a new career when the opportunities come.
40. Vincent is currently six months into the Attach and Train programme with ST Logistics. The company has been suitably impressed by him and is also ready to hire. Although Vincent’s training attachment will only end this June, ST Logistics has already offered him full-time employment.
41. Vincent is one of 13,000 mature jobseekers helped through Adapt and Grow in 2017. He is also a very good example of how the Government can help a mature worker who has taken proactive steps to overcome his fears, to find a new career in a growth sector.
42. These mature workers account for about half of all placements under Adapt and Grow. About half of them, like Vincent, are 50 years old and above. We now have over 100 PCPs in more than 30 sectors – helping both displaced PMETs as well as those like Vincent who are at risk of displacement.
43. Last year, MOM announced stepped-up efforts to place local PMETs in five growth sectors with good potential for PMET jobs, namely: infocomm and media, professional services, finance and insurance, wholesale trade and healthcare.
44. We have generated positive momentum. Placements in these five sectors accounted for about 50% of all PMET mismatch placements in the second half of 2017. About 50% were mature local PMETs.
45. Through this effort, we have gained new insights into how we can support the manpower needs of companies that are growing and transforming. The key is to engage the companies early, before they have firmed up their plans. By doing so, it is more likely that their existing employees can be a part of the company’s future, instead of being just part of the past.
46. Our model of PCPs will therefore evolve. We no longer wait till workers are unemployed or retrenched to reach out to them. Instead, we work with companies ahead of time to put in place re-deployment PCPs such as in Consumer Banking, where existing staff are re-trained and re-deployed.
47. As the banks transform their frontline services, hundreds of bank tellers and cashiers are adapting to do digital marketing, data analysis and product development. These staff can avoid painful retrenchment, and at the same time help their employers meet their new manpower needs. In 2018, we expect more placements to come from such re-deployment PCPs.
48. Our Adapt and Grow efforts are not only targeted at PMETs. A sizeable proportion, about 40%, placed under Adapt and Grow are Rank-and-File workers.
49. Similar to PCPs for PMETs, we also have Place and Train programmes for Rank-and-File workers to re-skill to take on new roles. More than 2,000 workers were placed under such programmes in 2017, representing a more than 50% increase from 2016.
50. We have also piloted the Work Trial scheme in 2016. This scheme is targeted at jobseekers who are job-ready, but are not sure about the specific jobs. It could also be that the jobseeker and prospective employers are unsure about each other.
51. Through Work Trial, they have up to three months to assess each other, with Government bearing the cost. In 2017, the number of jobseekers placed through Work Trial has increased five times, from about 100 to 500.
52. One of them is Mr Muhd Sahfari. Sahfari left his previous job as a sales manager in an IT solutions company as he felt the environment was not quite suited for him. However, he was still keen on a sales position as he enjoys interacting with people.
53. He found out that Crosstrack was hiring a sales manager. In case you are wondering, Crosstrack is a start-up which provides an online marketplace to allow customers to source for the most suitable courier for their delivery jobs. Unlike his previous sales jobs which were focused on direct sales, Crosstrack’s requirement of a sales manager includes operations management and liaising with delivery drivers. Sahfari was therefore apprehensive. He thought to himself could he could cope with the additional workload, and does a tech start-up offer sufficient job security? Therefore, he decided to sign up for Work Trial, before committing on a permanent basis.
54. Through the Work Trial, Muhammad had the opportunity to try out a new job in an unfamiliar environment – a start-up. Not only did he enjoy the dynamic nature of a start-up, he also picked up new IT skills. Crosstrack saw that he had the right aptitude and attitude, and employed him on a permanent basis when the Work Trial ended.
55. So far, the Adapt and Grow initiative has been able to provide the appropriate interventions for jobseekers at different stages – as highlighted by Mr Patrick Tay. However, we are always looking for better ways to scale up, enhance existing programmes or introduce new ones which will help job seekers.
56. This year, we will make three enhancements to Adapt and Grow.
57. First, we will introduce three new Attach-and-Train PCPs by second quarter this year in areas where we expect manpower demand to increase, namely, AI Game Programmers, Robotics Engineers; and Food Production Specialists.
58. Second, we will also do more for our Rank-and-File workers, a suggestion raised by Assoc Prof Faishal Ibrahim.
59. In particular, to further encourage employers to hire long-term unemployed Rank-and-File workers, we will raise the salary support for such workers under the Place-and-Train programme, from 70% to 90% of monthly salary. We will also increase the maximum monthly pay-out to employers from $2,000 to $3,000.
60. Third, there is scope to enhance the upward mobility of lower to middle income workers by helping them take up better jobs.
61. Part of this is done through efforts under the LED Scheme to uplift and transform jobs. But the other part is helping workers to access such jobs.
62. The Work Trial has proven useful in plugging information gaps. Without Work Trial, Sahfari would likely have missed out on a good career opportunity in a growth sector and Crosstrack would have missed out on a good hire.
63. Mr Desmond Choo will be glad to know that we will expand the current scope of Work Trial to provide workers with more opportunities to try out better jobs, specifically better paid jobs, and help companies which need more manpower to assess jobseekers. This was also a point which was raised by Mr Chong Kee Hiong.
64. We will call the enhanced programme Career Trial. Under the Career Trial programme, we will double the maximum training allowance from $1,200 per month to $2,400 per month. Further, the salary support to employers and the Additional Retention Incentive, will be available for all jobseekers who are unemployed for six months or more, instead of only for those unemployed for 12 months or more previously. We will also increase the maximum salary support to employers, from $3,600 to $5,400 per jobseeker over a six-month period.
65. Mr Chairman, the Adapt and Grow initiative is a viable way to help Singaporeans have better employment outcomes even as our economy restructures. We will continue to improve on the scheme designs and intensify our outreach to enable more Singaporeans to be matched to good jobs and careers.
66. Mr Chairman, would you allow, I would like to wrap up this section in Mandarin.

67.  

    应变与提升计划在过去几年取得了显著的成果. 通过应变与提升计划，我们去年帮助了两万五千多个国人成功求职, 比前年增加百分之二十。特别是年长的或长期失业的工友，还有白领人士，人数都增加了许多。我们将维持目前所取得的进展势头，并通过各项计划, 近一步加强支持力度和扩大涵盖面, 确保国人即使需要转换职业跑道，也能胜任新工作，顺应新时代。
    
    

       

    主席，人力部除了帮助国人取得良好的就业结果，去年也成立了劳资政工作小组, 深入探讨自雇人士所面对的各种挑战。

     

    工作小组上个月提出了一系列有用的建议，政府已经已经决定接受，并且会和劳资政伙伴在未来的两年里陆续落实这些建议。

     

    第一, 针对自雇人士和买家之间的合约,推出新的劳资政标准;

     

    第二, 让劳资政纠纷调解联盟协助调解自雇人士和买家之间的纠纷;

     

    第三, 配合有意的自雇人士协会制定技能提升框架, 确保自雇人士的技能与时俱进;

     

    第四, 推出新的保险产品来缓解自雇人士因持续的伤势或病情面对失去收入，”手停口停”的困境;

     

    第五, 针对工伤风险较高的职业, 研究推广以上保险的方案;

     

    第六, 政府将通过试点, 领先实行“边赚边缴”模式协助填补自雇人士保健储蓄户头, 以及研究如何促成其他买家也实行这个模式;

     

    我将会以英语详细说明个个建议的实施时间表。

    
    

68.  Mr Chairman, for the last decade, self-employed persons¹ or SEPs have constituted 8% to 10% of our resident workforce.
69. At the COS debate last year, Minister Lim Swee Say highlighted the possible increase in the number of SEPs given the emergence of the gig economy. This was the impetus for setting up a tripartite workgroup to look into the concerns of SEPs.
70. Before I give the Government's response to the tripartite workgroup's recommendations, let me first provide an update of the SEP landscape, which will also address questions and concerns raised by Mr Thomas Chua, Ms Jessica Tan and Mr Kok Heng Leun.
71. From our most recent survey in 2017, the number of residents who took up self-employed work for at least six months in 2017 has grown to 223,500 – about 10% more than the year before. This growth took place at the same time as regular employment among residents, also went up.
72. All the increase in the number of SEPs came from those who did self-employed work as their main jobs, rather than as secondary sources of income.
73. Such SEPs are referred to as "primary SEPs" because they depend on self-employment primarily for their livelihoods. Primary SEPs are also the group we are most interested in. Primary SEPs now constitute 8.4% of our resident workforce, still well within the range of 8% to 10% observed over the last decade.
74. What do we know about the age and education profiles of Primary SEPs, and have they changed in 2017? By age, more than half of the primary SEPs are 50 and above; less than 10% are below 30. The age distribution in 2017 remains largely the same as 2016.
75. However, the share of Primary SEPs with tertiary qualifications rose from 37% to 40%, in tandem with the rise in education profile among the local workforce. But it is still much less than the 55% tertiary-educated in the local workforce.
76. The most recent survey also showed a notable increase in the number of primary SEPs who said they preferred regular employment over self-employment. This group rose from 19% in 2016 to 23% in 2017.
77. In other words, about one in five primary SEPs prefer to be in a regular job. However, they tend to be older and have lower educational qualifications. We are very keen to help them and Mr Ang Hin Kee asked how.
78. The first is to improve SEPs' awareness of job matching schemes available and encourage them to come forward to the career centres run by Workforce Singapore (WSG) and NTUC Employment and Employability Institute (e2i). Our existing schemes, as well as the new Career Trial programme that I spoke about can also help. Certainly, we should help career counsellors and coaches become more aware of these efforts so that they can provide the right advice.
79. But these efforts will need such SEPs to become active jobseekers. At present, more than 80% of them say they have not been looking for a regular job actively, even though they prefer it over self-employment.
80. For the vast majority of SEPs who continue to prefer self-employment as a career, we should also address their concerns and provide them with support.
81. To recap, the Tripartite Workgroup (TWG) noted in its report that although the SEPs were very diverse, there were four common challenges they faced. First, payment-related disputes; second, loss of income due to prolonged illness or injury; third, lack of CPF savings for healthcare and retirement; and fourth, lack of occupation-specific competency frameworks.
82. Mr Thomas Chua, Ms Jessica Tan and Mr Ang Hin Kee asked about MOM's response. We are grateful to the TWG members who include Mr Ang, for your well-considered and balanced recommendations. They were very constructive. The Government accepts all seven recommendations and will find ways to fully implement them. Let me share our plans.
83. First, payment-related disputes. Some observers have suggested mandating written contracts for all SEPs to minimise payment disputes. The TWG considered this but finds it impractical. This is because buyers of SEPs' services include micro-SMEs and even individual households, such as for private home tuition. Some purchases are of very small value
84. Instead, today we formally launch the Tripartite Standard on Contracting with SEPs. This was developed with tripartite partners in line with the TWG's recommendations. It is an agreed benchmark which SEPs should encourage buyers to adopt. SEPs will be able to identify and contract with progressive service buyers who adopt the standard. Buyers who adopt the standard need to discuss and agree clearly with the SEPs terms of engagement, such as the range of services to be delivered, project timelines and milestones, payment schedules. These will have to be set out in writing.
85. The standard is a good start to make clear the working arrangements between businesses and SEPs. Over time, the standard will help shape contracting norms and entrench best practices.
86. But, even with written agreements, disputes could potentially still arise. For SEPs with sector agencies, we encourage them to continue to approach their sector agencies. These sector agencies would be in a better position to help resolve disputes. For instance, LTA facilitates mediation of disputes between taxi operators and taxi drivers. LTA is best suited for this role because apart from being familiar with issues in the industry, it has convening power as the regulator of both taxi operators and taxi drivers.
87. For other SEPs, from September last year, the Tripartite Alliance for Dispute Management (TADM) started piloting voluntary mediation when they have payment disputes with businesses. With immediate effect, TADM will extend voluntary mediation services to all SEPs who have payment disputes with businesses.
88. Additionally, the TWG recommended that a prolonged medical leave (PML) insurance product be developed to mitigate the SEPs' loss of income during prolonged injury or illness.
89. Today, some SEPs buy additional riders on top of their private insurance plans to provide for this. However, there is a lack of an affordable standalone PML insurance product today. This means that SEPs have no alternative if they do not wish to buy the main insurance product. It is only available as a rider.
90. Observers and SEPs have also asked if service buyers should be made to buy insurance for SEPs, just as businesses buy work injury insurance for their employees. However, unlike a regular employee, most SEPs contract with multiple service buyers. It will not be possible to determine precisely how much coverage each service buyer should provide for the SEP.
91. We will therefore take a practical approach of making the insurance product available for SEPs to purchase for their own protection. I am encouraged that NTUC Income is keen to develop a PML insurance product that will fulfil the TWG's recommendations. Other insurance companies may also step forward to offer such insurance.
92. Let me now address the question of whether all SEPs should be compelled to have this type of insurance.
93. SEPs are a diverse group. They can be found in numerous occupations, many of which have low-risk of injury, such as real estate agents. SEPs themselves have varying health conditions. We therefore agree with TWG that the purchase of PML insurance should largely be kept voluntary.
94. That said, we want to encourage widespread adoption of insurance by SEPs in some higher-risk occupations, as they are most in need of such protection. Making insurance coverage the norm for SEPs in these occupations would make clear to the buyers of their services that the insurance costs would be priced into their fees. This is only fair.
95. As a start, we have identified two occupational groups in which to promote PML insurance coverage.
96. The first group is sports coaches and instructors. Collectively, MOE schools are major buyers of their services. MOE has agreed in-principle to help shape a new norm by contracting only with self-employed coaches and instructors who have such PML insurance coverage. SEP coaches and instructors may then price the cost of PML insurance coverage into their bids for MOE's work or projects.
97. Another occupational group which will benefit from PML insurance are taxi drivers and private hire car drivers. The individual buyers of their services are really the commuters, and there are many. But there are significant intermediaries like the taxi operators and matching platforms like Grab and Uber.
98. MOM and LTA will study how to ensure that active taxi and private hire car drivers also have PML insurance coverage, together with these intermediaries, the National Taxi Association (NTA) and the National Private Hire Vehicles Association (NPHVA).
99. Together, sport coaches, taxi and private hire car drivers comprise about 30% of all SEPs. In consultation with relevant stakeholders, MOM will also work closely with MOE and LTA on the way forward to promote PML insurance coverage as a norm, starting with these two occupational groups. The aim is to have a viable plan and for a PML insurance product to be available in 2019.
100. The Government also accepts the TWG's recommendation to help SEPs save more regularly for their healthcare and retirement needs through a "contribute-as-you-earn" (CAYE) model.
101. CPF is the cornerstone of our social security system. CPF schemes are not limited to regular employees. SEPs can also make use of CPF to save for their healthcare and retirement needs.
102. Currently, SEPs are already required to contribute to their Medisave accounts on an annual basis. They can additionally make voluntary CPF contributions to build up their retirement savings.
103. Even though Medisave contributions are mandatory today, about one in four SEPs have not been keeping up with their Medisave contributions. The question is: why?
104. Well, this is because SEPs are given up to 12 months from the time income is assessed to make their Medisave contributions. A key challenge is that they may not set enough cash on a regular basis. So when the time comes to make that lump sum contribution to their Medisave accounts, they find it difficult to do so.
105. Without sufficient Medisave contributions, these SEPs may not be able to pay for out-of-pocket healthcare expenses or keep up with their MediShield Life premiums. They will face a longer-term risk of not being able to pay for their healthcare in old age. So we are very concerned about them.
106. It will be easier for them to make smaller, but more regular contributions as they receive the earnings. So this is why the Government agrees to study how to implement the TWG's recommendation for a CAYE model for SEPs' Medisave contributions.
107. This means that a Medisave contribution is required as and when a service fee is earned, similar to employees today who pay CPF when they receive their monthly salaries. The service buyer or intermediary who contracts with the SEP will deduct and transmit the Medisave contribution to the SEP's Medisave account whenever they pay the SEP.
108. There is no change to the SEP's obligation to make the Medisave contribution, and for the time being, neither will we require SEPs to contribute to their Special Account to build up their retirement savings. While this is an important issue, this matter should be reviewed only after we have effectively addressed the problem of SEPs defaulting on their Medisave contributions.
109. Mr Chen Show Mao offered several suggestions to nudge SEPs to make voluntary contributions beyond Medisave. We thank him for his suggestions and will study their feasibility.
110. Realistically, CAYE can only work for SEPs who contract with corporate service buyers, or get work through certain significant intermediaries. The individual hirer of a private home tutor, for example, will not be in a position to help the SEP make his Medisave contribution.
111. Intermediaries who work with SEPs such as Grab and Caregiver Asia have indicated their support for CAYE. But CAYE will not be straightforward to roll out. We will have to work through implementation issues, such as the correct amount of Medisave contributions to deduct in each transaction.
112. The Government, as a service buyer, will take the lead to implement CAYE. Government Procurement Entities aim to start a pilot by 2020 which will allow us to work through the implementation issues for CAYE and help smoothen its subsequent implementation in the private sector. We will provide more details when ready. In the meantime, we welcome companies to continue their voluntary Medisave contributions for their SEPs.
113. The final recommendation by the TWG is for tripartite partners to support SEP associations in developing occupation-specific competency frameworks.
114. Our tripartite partners are committed to doing so. To date, 15 of the 23 priority sectors have launched Skills Frameworks that support the sector's industry transformation. These Skills Frameworks provide key information on sector, career pathways, occupations/job roles, and the skills required for these occupations/job roles. They also list the training programmes that individuals or employers can tap. The information in these Skills Frameworks will be relevant to both employees, as well as SEPs in those sectors.
115. The Freelancers and Self-Employed Unit (U FSE) in the Labour Movement is also working with many groups, such as the sport coaches to develop a training and accreditation scheme.
116. There are SEP associations that have proactively helped their SEPs to learn new skills. For example, the NTA, under the leadership of Mr Ang Hin Kee, saw that foundational digital skills, as well as familiarity with digital applications – such as Parking.sg and mobile payment apps – would benefit its members in their day-to-day work. They also knew the course schedule had to cater to taxi drivers' unique work schedules.
117. NTA worked closely with one of the SkillsFuture Singapore (SSG)'s appointed training providers and SSG to customise the SkillsFuture for Digital Workplace programme for NTA members. SSG also provides course fee subsidies for the programme to keep the cost affordable for the drivers. If I understand correctly, they pay about $50 for each course.
118. SEP associations can strengthen support to help their members make their SEP careers more sustainable. The Government and the tripartite partners are keen to work with more SEP associations on this front.
119. Mr Chairman, let me summarise the Government's response to the TWG’s seven recommendations.
120. Three recommendations are being implemented from today or have been on-going. They are the Tripartite Standard on Contracting with SEPs, which we just launched; the extension of voluntary mediation services by the Tripartite Alliance for Dispute Management to cover SEPs; and the support of the tripartite partners for SEP associations to develop occupation-specific competency framework so that SEPs can remain relevant.
121. Another three recommendations will be implemented in 2019 or 2020. They are to make available a Prolonged Medical Leave insurance (PML) product. To promote PML insurance coverage as a norm, starting with two occupational groups – sports coaches and instructors, as well as taxi and private hire care drivers. And to start a pilot programme where the Government, as a service buyer, will implement Contribute As You Earn (CAYE) for the Medisave obligations for its self-employed contractors.
122. The recommendation to introduce CAYE for other service buyers will require further study. The Government will focus on selected occupations where there are significant intermediaries or where there are large corporate service buyers we can work with.
123. We are confident that the TWG recommendations will help address the main common challenges that SEPs face. And we will continue to monitor the SEP landscape to stay on top of the changing trends.
124. Mr Chairman, as we look to support SEPs better, we are also committed to making our workplaces progressive for all, including for our women. Our female employment rate has improved steadily. Over the last three years, it averaged 72%², higher than the 69% average in the previous three years. In terms of full-time employment, we are ranked sixth, compared to 35 OECD countries³.
125. With more women in the workforce, has workplace harassment become a bigger problem? I would like to assure Ms Kuik Shiao-Yin, Mr Louis Ng, Ms Thanaletchimi and Mr Dennis Tan that the Government takes this matter seriously and that the situation is closely, carefully monitored.
126. Together with the tripartite partners, we have taken a multi-pronged approach towards protecting people against workplace harassment. In 2014, the Protection from Harassment Act (POHA) was introduced. Employees who experience workplace harassment should seek help promptly, including for attacks on employees in cyberspace, as raised by Ms Thanaletchimi. They can report such incidents to MOM, as well as to Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), which Ms Kuik Shiao-Yin suggested. They can also seek civil remedies directly through the courts, or report serious cases to the Police.
127.  Between 2013 and 2017, an average of about 20 police reports were filed annually involving sexual harassment or insults of modesty occurring at the workplace. They were thoroughly investigated and the offenders taken to task.
128. Some employees prefer to resolve the matter privately without involving the authorities, but would rather report the matter to their employers. Legislating mandatory reporting by employers, as suggested by Ms Thanaletchimi, will close off this avenue for such employees and discourage them from raising the matter with anyone. This is not helpful to them.
129. Instead, the tripartite partners introduced the Tripartite Advisory on Managing Workplace Harassment in 2015 to remind our employers on their obligations to prevent and manage workplace harassment. They should also inform the employees of the avenues where they can seek help.
130. Last year, we also launched the Tripartite Standard on Grievance Handling which covers workplace harassment. Three hundred and twenty employers adopted the standard, covering about 260,000 employees. A mediation body called for by Ms Thanaletchimi already exists as TADM can also mediate harassment cases.
131. What about gender pay gap which Dr Intan was concerned about? Assoc Prof Daniel Goh cited a study by ValuePenguin. I think he did so during the debate on the Budget, and the study said that gender pay gap "has remained at around 18% to 19%" from 2006 to 2016. Unfortunately, the study did not make an apple-to-apple comparison as it included both full-time and part-time employed residents. More women than men worked part-time to meet their family and caregiving responsibilities and naturally earned less.
132. MOM’s Comprehensive Labour Force Survey allows us to look at only full-time employed residents and compare salaries of men and women in similar occupational groups. The data shows that a gender pay gap of 11.8% in 2017 still exists. But this is a significant improvement from 20% 10 years ago. There was also broad-based improvement across most occupational groups.
133. The remaining pay gap can be attributed to the fact that women are more likely to exit the workforce, or have intermittent patterns of work, for reasons, such as childcare and sometimes caring for the elderly. If and when they return to the workforce, as a result, they also have to catch up with their male counterparts.
134. The same reason probably explains why more men than women achieve retirement adequacy. In 2017, 66% of active male members and 53% of active female members turning 55 met their CPF Basic Retirement Sum (BRS). So, 66% for the active male CPF members, and 53% for the active female CPF members.
135. Mr Chong Kee Hiong will be pleased to know that the gap is closing. In 2007, the median retirement savings for women at age 55 were about 60% of median balances at age 55 for men. By 2017, 10 years on, this ratio has improved to 74%. And we expect the gap to further narrow over time.
136. To address Assoc Prof Daniel Goh’s concern about the gender difference in CPF LIFE pay-outs, the best way is really to enable the women to remain in the workforce, so that they continue to advance in their careers and build up retirement savings. This was the key thrust of my speech last night at an event organised by the Singapore Chinese Chamber of Commerce and Industry to celebrate International Women’s Day.
137. Mr Desmond Choo and Ms Thanaletchimi will be pleased that during the event, I also announced that the Government will set aside about $30 million to further promote Flexible Work Arrangements.
138. We will do so through the enhanced the WorkPro Work-Life Grant, which will provide higher grant support to employers, especially for putting in place job-sharing schemes. This enhancement comes on top of the Tripartite Standard on Flexible Work Arrangements launched last year which now covers some 250,000 employees. The Tripartite Standard on Unpaid Leave for Unexpected Care Needs which I launched a few days ago during PMO’s COS debate; and, thirdly, the very significant expansion of pre-school places which the Government is fully committed to.
139. These measures that I have highlighted will help the current and future cohorts of younger women remain in the workforce and improve their retirement adequacy. For the older cohorts of women who still did not manage to save enough for retirement, we have introduced a number of measures to help. In 2016, we made it easier for members to transfer CPF savings to their spouses’ account by lowering the minimum threshold they must meet, from the Full Retirement Sum to the Basic Retirement Sum.
140. From October 2018, we will also make it easier for children to transfer CPF savings to their parents and grandparents. I will say more about this later.
141. Mr Chairman, overall, with our tripartite efforts, we have made progress in helping Singapore women to better manage their family responsibilities and work aspirations. There is certainly more to be done, and we will continue to strengthen our efforts.
142. Mr Chairman, beyond helping our workers gain access to good jobs and have good employment outcomes, we also want to help them have better retirement adequacy for better peace of mind in old age. Our CPF system serves Singaporeans well in supporting our three basic needs, namely, housing, healthcare and retirement. Today, six in 10 active CPF members turning age 55 have at least the Basic Retirement Sum in their Retirement Accounts. By 2020, we expect this proportion to increase to 70% and even more over time.
143. To help CPF members save more for their retirement, we stepped up efforts to encourage members to top-up their own or their loved ones’ CPF accounts. In 2017, over 61,000 members received about $1 billion in cash top-ups to their Special or Retirement Accounts. In addition, over 35,000 members received about $1 billion in CPF transfers. Forty percent of these members who received cash top-ups, CPF transfers or both, had less than Basic Retirement Sum. In other words, these top-ups and transfers were very useful to them.
144. We have also enhanced the Workfare Income Supplement and introduced Silver Support to provide additional retirement support to lower-income Singaporeans. Today, about 152,000 seniors qualify for Silver Support. They constitute about 30% of the population of seniors aged 65 and above. I am pleased to share with Members that about two-thirds of the Silver Support recipients are women. I think this shows very clearly that we are not averse to helping those who need more help and that, of course, includes women, especially those of the previous generation who did not have as much of a runway to build up their retirement savings.
145. Assoc Prof Daniel Goh asked if the pay-outs can be the same, regardless of flat types. Although all Silver Support recipients are already means tested, the degree of family support they enjoy is not the same. The purpose of Silver Support is to top-up and to help those who perhaps do not have as strong family support and also because they accumulated too little during their productive years. So, housing type is not a perfect proxy for family support, but it is an uncomplicated indicator. Singaporeans with exceptional circumstances can appeal to be eligible for Silver Support or to receive higher pay-outs. The appeals will be seriously considered.
146. Since the scheme started in July 2016, about 10,000 appeals had been received. About half were approved because of the appellant's changed circumstances. This is why it is also not so meaningful to look only at those who drop out from Silver Support because there are also those who qualify. There are those who did not qualify in the past but then subsequently qualify. So, there are people who used to get it but no longer get it because the assessment is updated regularly and they no longer meet the eligibility criteria. But there are also people who did not meet the criteria in the past, but then subsequently were able to. The important thing is that about 30% of seniors above the age of 65 continue to receive Silver Support.
147. Mr Leon Perera asked about giving CPF members flexibility with their mandatory CPF contributions. I understand his point of view. But I should emphasise that the primary purpose of CPF is to save for our retirement.
148. Today, while the CPF system is enabling more Singaporeans to have adequate savings in retirement, there are still groups that we want to help build up retirement adequacy. For example, as pointed out by Members like Dr Intan Mokhtar and Mr Zainal Sapari, low-wage workers and older workers continue to need help.
149. Besides the schemes that I have described earlier, we have also tightened rules on CPF withdrawals for everyone, precisely to ensure that retirement savings continue to be steadily built up and are not depleted. For those who have built up substantial CPF savings, we are helping them grow those savings in better ways, which I will talk about later. It will, therefore, be incongruent with our current focus to start loosening up, whether in terms of the rules on withdrawal or contributions. Let us stay focused on the task at hand, safeguard and grow our CPF savings so that all Singaporeans can have better peace of mind in retirement, for as long as they live.
150. Mr Chairman, Mr Zainal Sapari expressed concerns that some CPF members who invest through the CPF Investment Scheme (CPFIS) might not fully understand the risks and costs involved. So their painstakingly built-up retirement savings may be lost.
151. Currently, there are two ways for members to grow their CPF savings. For those who have no appetite for risk, they can earn risk-free interest on their CPF savings. Those who have an appetite for risk may choose to invest their monies through CPFIS.
152. However, a member who is willing to take risk may not have the knowledge to invest. Based on a poll commissioned on behalf of the CPF Advisory Panel in 2015, more than half of the CPFIS investors considered themselves to have "limited" investment knowledge but it did not prevent them from taking those investments.
153. CPF members should exercise caution when investing their CPF savings. Over a two-year period between October 2014 and September 2016, 29% of members who invested their Ordinary Account (OA) savings made cumulative total losses. Another 22% achieved cumulative profit that is less than or just equal to the OA interest rate of 2.5% per annum. In other words, slightly more than half of the members with a CPFIS-OA account did not do better through their own investments than if they simply left their CPF balances alone to earn a risk-free interest rate.
154. We have been studying the feasibility of a third option for this group of members and the scheme is called the Lifetime Retirement Investment Scheme (LRIS). This LRIS is targeted at CPF members who have an appetite for risk but neither the knowledge nor time to invest. We are aiming for something low cost. We want to take advantage of the longer time horizon available to CPF members to earn better upside investment gains.
155. Yet, the product should also provide some assurance against downside risks. Members can well imagine that such a scheme is not easy to design and will require further study. In the meantime, we will make three enhancements to better cater CPFIS to members with an appetite for risk, and have both the knowledge and time to invest.
156. First, we will introduce a self-awareness questionnaire (SAQ) that will be available to all CPF members. This questionnaire will provide feedback to the member on his level of basic financial knowledge and remind him of the different options available to him to grow his CPF savings, such as CPF interest rates or the upcoming LRIS.
157. But regardless of the feedback, members can still decide whether or not to invest through the CPFIS. The questionnaire will be part of the process of opening a CPFIS account from 1 October this year. Members who already have a CPFIS account are not required to take the questionnaire but are strongly encouraged to do so.
158. The second enhancement is to disallow sales charges for products that are offered under the CPFIS. Currently, financial advisors can receive a sales charge of up to 3% of the transacted amount when members use their CPF to purchase unit trusts and investment-linked insurance policies.
159. This sales charge has an unintended consequence that is detrimental to CPF members' interests. It encourages financial advisors to sell products to earn more commissions which causes the members to "churn" their investments. Buy sell, buy sell. Each time, there is a sales charge.
160. Our target group of CPFIS members will generally not need to rely heavily on financial advisors to decide which investment products to purchase. They can already directly buy unit trusts on online platforms, such as FundSupermart, Navigator and POEMS for zero sales charge. Therefore, the sales charge adds another layer of cost that reduces the member’s investment returns.
161. By removing the sales charge financial advisors no longer have an incentive to push products. This also reduces the cost of investing for CPFIS members and will better align the investment behaviour to members who have time and knowledge.
162. The third enhancement is to reduce the maximum wrap fees charged for CPFIS investments such that wrap fees cover only the cost to maintain wrap accounts. For Members' information, currently, some CPF members set up a wrap account on investment platforms. Financial advisors can charge an annual wrap fee of up to 1% of the amount of funds that they manage in the wrap accounts. The wrap fee covers advisory services and the costs to maintain the wrap account.
163. We are not opposed to wrap accounts as they are generally considered to bring convenience to investors. Again, the targeted members for CPFIS are not expected to rely on advisory services that are usually included in the wrap fees.
164. We will therefore lower the cap on annual wrap fees to 0.4% of the total amount managed. This is similar to the fees charged by online investment platforms in the cash market. We will review the cap on wrap fees from time to time as the investment landscape evolves.
165. We are mindful that these enhancements may affect the financial advisory industry which will no longer be able to impose the sales charge on new CPFIS investments and will have to charge only lower wrap fees onwrap accounts. However, we do not expect this impact to be too substantial.
166. Currently, the Life Insurance Association estimates that about 15% of premiums from new insurance business came from CPFIS products while the remaining 85% of premiums came from the cash market. Nonetheless, to give the industry adequate time to adjust, we will implement these fee changes in two steps:
167. (i) The cap on sales charges will be reduced to 1.5% from 1 October 2018 and further reduced to 0% from 1 October 2019; and
168. (ii) The cap on wrap fees for both existing and new accounts will be reduced from 1% to 0.7% from 1 October 2018 and further reduced to 0.4% from 1 October 2019.
169. Please allow me to wrap up this section in Mandarin.

170. 主席, 我们将调整公积金投资计划, 近一步保障公积金会员的利益。
     
     公积金会员可以通过自行评估, 更清楚了解, 要为存款赚取最好的回报, 应该选择哪一种方式才比较合适。

      

     时间不足或对投资理财不熟悉的会员, 把公积金存款留在户口里赚取无风险利息或许是最理想的做法.

      

     即有时间又有投资理财知识的会员, 以后须付的几项费用也将减少。

     
     
171. Mr Chairman, let me conclude. We are taking active steps to help Singaporeans move into better jobs and secure better employment outcomes, even as the economy restructures. The women in our workforce have made progress and will get more help to stay in employment. Our self-employed persons and CPF members will also enjoy better protection. MOM will continue to improve our schemes and programmes to ensure that we have an inclusive workforce and progressive workplaces. We have our work cut out for us and we look forward to Members' support.