Speech by Minister for Manpower Dr Tan See Leng at Committee of Supply 2023
Dr Tan See Leng, Minister, Ministry of Manpower
A1. Mr Chairman, I thank GPC MPs and others who have taken an active interest in MOM’s work and spoken in support of our workers and our businesses.
A2. Our labour market posted strong growth last year.
(a) Total employment grew by more than 200,000 in 2022, surpassing its pre-pandemic level by 3.0%. Resident employment is already 4.4% above 2019 levels.
(b) Resident unemployment rates have recovered to pre-COVID levels.
(c) Resident wages also increased at a faster rate. The nominal median income of full-time employed residents grew by 8.3% in 2022. It is more than double that of the previous year of 3.2%. Even after adjusting for inflation, the real median income growth in 2022 was more than double that of 2021.
A3. However, we are at multiple crossroads. The uncertain global economic environment, global inflation and geopolitical challenges in the medium term will weigh in on the labour market going forward. I hear your concerns about what this means for you and how it will impact your jobs, especially for older workers, but rest assured – we will journey with you every step of the way.
(a) Whether you are in your early 20s or 30s, or whether you are in your mid-40s or late-50s, we will empower you to find and work towards new opportunities, but we need your help, your support to take the first step to move forward to improve your career prospects.
(b) If you want a career change, you can be assured of the support we will provide you to upskill and reskill.
(c) If you fall out of employment, you can be assured that we will step in to help you in your job search.
(d) If your interest is in “hands-on” work, you can be assured of more opportunities to achieve and to be rewarded for the mastery of those skills.
(e) As you approach retirement, you can be assured that if you have worked and contributed consistently to your CPF, you will be able to meet your basic retirement needs in your golden years.
A4. We will leverage our continued economic growth to provide good jobs for you and continue to improve your employment outcomes. Even in the midst of this uncertainty, there are significant opportunities that we can continue to capitalise on.
(a) I shared in my speech with the Ministry of Trade and Industry yesterday how we have a suite of programmes to promote talent development in our enterprises.
(b) For those starting out in their careers, there is the Singapore Global Executive Programme, to support fresh and recent graduates to pursue structured career progression pathways in high-growth companies.
(c) The Global Ready Talent Programme also helps to build a talent pipeline by co-funding local young talent to take on both local and overseas internships.
(d) The Tech@SG pilot has also created more than 1,500 local jobs in tech start-ups in the past three years since launch.
(e) For senior leaders of our promising SMEs, the Enterprise Leadership for Transformation programme also helps them to develop their business strategies and leadership capabilities.
A5. With the ever-changing economy, we need to continue to press on with economic transformation to allow us to emerge stronger and seize new opportunities for Singaporeans. We want you, and invite you to join us on this journey of transformation – this is why we have been engaging Singaporeans to understand their aspirations and anxieties about the economy and jobs under the Forward Singapore Exercise.
A6. Against this backdrop, MOM’s priorities for this COS will centre on three main themes: Seizing opportunities with you, strengthening support for you, and last but not least, securing better workplaces with you.
A7. First, we will seize opportunities with Singaporeans by supporting them to improve their career prospects and their resilience so that they will be empowered to take on good jobs.
A8. At the same time, we will continue to be open to workers of the right calibre and in areas where we need them so that our businesses can build the best team of local and foreign talents to grow.
A9. Our growth should also be inclusive and enable all segments of our workers to reap the economic benefits.
A10. Hence, our second focus is to strengthen support for Singaporeans’ retirement adequacy by enhancing the CPF system so that they can have peace of mind in their golden years.
A11. We will also press on with our whole-of-society effort to provide greater support for Platform Workers, lower-wage workers and senior workers by protecting their interests at work. SMS Koh and SMS Zaqy will elaborate more on our efforts on this front in their respective speeches.
A12. Finally, every one of us desires and deserves a fair opportunity to contribute and thrive at work.
A13. Which brings me to our third focus – and that is to act collectively as one united society, we must work in solidarity to secure safer, fairer, and more progressive workplaces.
(a) We will continue to improve employment opportunities for women, Persons with Disabilities and ex-offenders. MOS Gan will elaborate on these in her speech.
(b) We will also continue with the efforts to improve safety in the workplace. This will be covered by SMS Zaqy in his speech as well.
A14. Let me start by sharing how we are empowering Singaporeans to take on good jobs.
B. “SEIZING OPPORTUNITIES WITH YOU”: EMPOWER BROAD MIDDLE TO TAKE ON GOOD JOBS
B1. We have a strong and vibrant economy that has shown its resilience through COVID. We have an exciting vision to continue transforming our economy. To seize these opportunities, Singaporeans will need to stay open to new challenges and careers, and continuously upskill and equip themselves with future skills. The Ministry of Manpower and the Government will be there with you every step of the way in this journey to improve your career prospects.
Update on Jobs and Skills Efforts to Support Local Workers
B2. During COVID, the Government stood up the National Jobs Council (NJC) to provide jobs and skills opportunities amidst a deep recession and a weak labour market. From April 2020 to April 2022, the combined efforts of the Government, unions and the employers supported the placement of around 200,000 locals under the SGUnited Jobs & Skills Package. Out of which, around 150,000 were placed into permanent jobs, with the rest placed into traineeships and attachment opportunities. WSG and NTUC’s Employment and Employability Institute’s 24 SGUnited Jobs & Skills Centres across the country were also able to assist and place 3,400 jobseekers in 2022.
B3. To complement the NJC’s work, I set up the Jobs Taskforce in September 2021 with the specific goal of helping more locals enter new jobs in 10 key sectors, such as Information & Communications, Manufacturing, and Financial Services. Mr Abdul Samad would be happy to know that through customised efforts targeted at key sectors, we helped place more than 11,000 locals into new jobs in these sectors.
B4. The NJC and the Jobs Taskforce’s achievements are a testament to the calibre and agility of our local workers. MOM and Workforce Singapore (WSG) will continue to help Singaporeans pivot to new jobs and new careers. For example, WSG offers many Career Conversion Programmes, or CCPs. CCPs provide salary and training support to employers to reskill new hires and workers for new or redesigned jobs. In 2022, WSG launched several new CCPs for emerging jobs such as Sustainability Specialist, Carbon Project Developer, and Customer Intelligence Analyst. Ms Cheng Li Hui asked how we are helping SMEs with hiring. SMEs can tap on the full suite of programmes offered by WSG. In particular, WSG has designed the CCP for SME Executives to meet the specific needs of SME hires. This programme helps new employees acclimatise to a SME working environment.
B5. Mr Desmond Choo and Mr Patrick Tay would like to know how we can better support mature workers, including PMEs, in their employment and employability. I appreciate that mature workers may find it slightly more challenging to switch careers. Hence, the CCPs provide an even higher level of support – 90% of salary and training costs – for mature workers aged 40 and above. To provide more options for mature workers, WSG also offers the SGUnited Mid-Career Pathways, or SGUP for short, which provides full-time attachments, with an allowance, for those aged 40 and over. In 2022, WSG supported about 1,900 workers through CCPs and another 1,100 through SGUP.
B6. One such individual is Mr Noor Hashim, a 50-year-old who was previously an independent systems security auditor with a local Security Auditor company.
(a) He wanted to explore career options in the IT industry and signed up for a 6-month course under the SkillsFuture Career Transition Programme.
(b) Equipped with new tech skills, Mr Hashim applied for the SGUP Programme on the MyCareersFuture website in September 2022.
(c) He landed an attachment as an IT Cloud & Infrastructure Specialist with the host organisation, Swiz Technologies.
(d) During the 6-month attachment, Swiz Technologies provided on-the-job training, including step-by-step demonstrations to help him understand how to perform the job tasks of an IT Cloud & Infrastructure Specialist.
(e) I am glad to hear that based on his strong performance in the attachment programme, Mr Hashim will be converted to a full-time staff with Swiz Technologies this month.
Update on ForwardSG Empower Pillar and Career Health
B7. But ultimately, the Ministry of Manpower is here to support Singaporeans’ career aspirations. That is why we have been engaging and speaking to Singaporeans from all walks of life to understand their aspirations and their anxieties about the economy and jobs.
B8. These conversations under Forward Singapore have allowed us to come together to forge a new social compact. A social compact has to be mutually reinforcing, mutually consolidating. It is a two-way dialogue, so that we can take in your responses, and forge a new compact together. We have worked with the Institute of Policy Studies to convene a Citizens’ Panel on employment resilience, and convene a group of citizens to discuss, to propose ideas to increase career mobility and to help workers to bounce back from setbacks, such as unemployment. The Citizens’ Panel will conclude its work by the end of March, and I look forward to hearing their recommendations.
B9. Having heard from many fellow Singaporeans so far, I hear a common theme. Whether you are starting out in your career, whether you are in your mid-career, or in a later stage of your career, you aspire to improve your career prospects. Better career health is key to helping our workers move up the career ladder, stay current, stay employable, or it facilitates them to be able to switch to a new job that better matches their skills and interests.
B10. I spoke about career health when I launched the Citizens’ Panel last month. Just like physical health, career health has three aspects.
(a) One, having better insights and awareness. We need to be more sensitised and more aware of our career prospects relative to how the industry and the economy is growing or transforming.
(b) Two, taking deliberate and purposeful actions to keep up our career health. Information is only meaningful if we process it and act on it. This means taking pre-emptive and proactive steps to stay ahead of the competition and being ready to seize new opportunities when they come.
(c) Three, how do we bounce back from setbacks. Sometimes, in spite of whatever we do, curve balls will still come our way, out of the blue. We are thinking about how to give a stronger helping hand to help workers to bounce back stronger and better from setbacks. But for this to work, workers need to keep up their career health, so that they are better prepared for setbacks and ready to pick themselves up.
B11. One way MOM is helping to improve awareness on career health is through the JTMs, or Jobs Transformation Maps. These JTMs provide detailed insights on the impact of technology and automation on jobs in each sector. Prof Hoon Hian Teck and Mr Sharael Taha asked about how we ensure our workforce is globally competitive, including how to cope with threats arising from Artificial Intelligence. These JTMs provide detailed insights on the impact of technology and automation on jobs in each sector. The JTMs will empower you to take control of your career development and progression by giving you information on the critical skillsets you will need to stay relevant and competitive.
B12. Mr Cheng Hsing Yao, Ms Janet Ang, and Mr Liang Eng Hwa asked how MOM can support our businesses to grow and cope with manpower shortages. Fundamentally, to cope with the manpower crunch, businesses must continue to transform, increase their productivity, and improve manpower efficiency. The Government remains committed to supporting businesses and workers to achieve this. The JTMs will guide businesses on how they can transform their businesses and jobs, to remain competitive and resilient. To find out more, you can access the JTMs on Workforce Singapore’s website. For individuals, you can also find resources there to reskill, to upskill, or to embark on career transitions.
B13. To date, 10 JTMs have been completed, with eight additional JTMs in progress. One example is the Food Manufacturing JTM launched by Enterprise Singapore in December 2022, which identified emerging job roles such as Novel Foods Technical Manager, and set out pathways to redesign jobs. Workers can reskill themselves via programmes such as the CCP for Food Manufacturing Professionals and Associates, and the SkillsFuture Work Study Programmes to move into emerging or redesigned roles. There will be more JTMs to be launched this year.
B14. There is tremendous potential to harness data and artificial intelligence to provide you with more personalised jobs and skills insights. This can help to improve job matching and allow you to better plan what next steps you can take – either to take a course to upskill, to make a career switch, or to progress in your career.
(a) I am happy to announce that we will launch a new CareersFinder feature on the MyCareersFuture portal in 3Q 2023. CareersFinder is a jobs and skills recommender.
(b) We have heard feedback that some of our workers prefer to explore job opportunities and skills upgrading at the same time, as they are inter-related.
(c) CareersFinder is the first step to try and integrate jobs and training recommenders. It uses data on skills adjacencies and job transitions in the labour market to help jobseekers to identify potential career opportunities, personalised based on their individual profiles, and recommend suitable training programmes to help them achieve their career goals.
(d) CareersFinder is a new feature, which will be launched in a beta version. But it will become more powerful as the data grows. We will continue to enhance it over time, to make it even more responsive to jobseekers’ needs.
(e) Individuals who wish to find out more about CareersFinder can also register their interest via WSG’s website.
B15. Besides supporting workers to reskill and upskill, we need to build a more inclusive labour market that rewards mastery of skills in different areas. Our labour market must also provide multiple pathways to success, to cater to different interests and inclinations. Our society has traditionally valued “head” work much more over “hands-on” and “heart” work, contributing to occupational wage disparity. But “hands-on” work – the craft required to make something well, to fix a complex machine – is just as important for our society to function. This is as Mr Edward Chia and Mr Pritam Singh have also highlighted. And many of these “hands-on” jobs require deep skills too. We are partnering NTUC to look into how we can redesign skilled trades, particularly those that remain indispensable in our future economy – to offer better salaries, clearer career and skill progression ladders, and other ways to attract, retain, and reward workers in these jobs. Over time, if we are able to shift the prospects and perceptions of such jobs and offer attractive career pathways for skilled trades, we will be able to increase the number of locals in these roles in a sustainable way. More details on this initiative will be shared at a later date when the Forward Singapore exercise concludes.
C. “SEIZING OPPORTUNITIES WITH YOU”: BUILD UP COMPLEMENTARITY OF FOREIGN WORKFORCE
C1. A crucial aspect of how we create good opportunities for local workers is by having a vibrant, growing economy that is open to international investments, companies, and talent. Working alongside global talent and in top companies means locals have access to more opportunities to take on challenging assignments and move up in their careers. This also creates more opportunities for other companies in the ecosystem, and it in turn creates more good jobs for Singaporeans at every level of the workforce, creating a virtuous cycle.
C2. Mr Raj Thomas asked about how we will continue to attract top talent to Singapore. Last year, I announced the Overseas Networks & Expertise Pass, or ONE Pass, for talent earning at least $30,000 in fixed monthly salary, which is comparable to the top 5% of EP holders, or those with outstanding achievements in arts and culture, sports, research, and academia. This was a highly targeted enhancement to attract top talent in diverse fields, so that we can keep ahead of the competition. I am happy to say that we have received many promising applications so far, from a very diverse group of accomplished individuals across sectors.
C3. I would like to share two examples of ONE Pass holders who are making or have the potential to make positive contributions to Singapore. Ms Yuki Yasui is the Managing Director of the Asia Pacific Network at the Glasgow Financial Alliance for Net Zero, a global coalition of leading financial institutions committed to accelerating the decarbonisation of the economy. Ms Yasui plays a key role in driving decarbonisation in Singapore, including helping financial institutions draw up their net zero transition plans, and mobilising finance to support decarbonisation efforts in key industry areas such as energy, cement, and steel.
C4. We also have Professor Rachel Watson, who joined A*STAR this month as the Executive Director of the A*STAR Skin Research Labs and The Skin Research Institute of Singapore. Prof Watson is internationally renowned in dermatology. Through her leadership, she will catalyse our local community of research scientists, academics and industry professionals to tackle complex challenges in skin disease and skin health for the benefit of Singapore and Singaporeans.
C5. These are just two examples. We look forward to the valuable contributions that our ONE Pass holders will bring and the opportunities that they will create for Singaporeans -.
C6. Mr Raj Thomas, Mr Liang Eng Hwa and Mr Yip Hon Weng highlighted - it is key for our foreign workforce to complement our local workforce to drive our local economy. We would also like to assure Mr Yip that MOM collaborates closely with agencies such as MTI and MND to ensure that our economic growth is sustainable as we maintain a balance between our various objectives. At the last COS, I announced significant changes to our foreign workforce policies to strengthen the complementarity of our foreign workforce. Our focus has been on implementing these changes well. Allow me to give you a quick update.
C7. To ensure that foreigners coming in on these passes are of the right calibre, we have benchmarked the cost of hiring an EP and S Pass holder to the wages of the top one-third of local Professionals, Managers, Executives and Technicians (PMETs) and local Associate Professionals and Technicians (APTs) respectively. With these clear benchmarks, employers can expect regular and predictable adjustments to the EP and S Pass qualifying salaries and levies.
C8. This year, there will be no change to the EP qualifying salary. We will, however, proceed with the second step of the increase to the S Pass qualifying salary and the Tier 1 levy in September 2023, as I had announced last year. The S Pass minimum qualifying salary will be raised from $3,000 to $3,150. The qualifying salary for older S Pass holders will be higher, given that local APT wages rise with age. The S Pass Tier 1 levy will also increase from the current $450 to $550 in September 2023. Employers will be able to find these details on the MOM website.
C9. COMPASS, a new transparent and holistic assessment framework for EP applicants, will be applied to new EP applications from September this year. COMPASS incentivises firms to strengthen their local workforce, complemented by a high quality and diverse foreign workforce. We have released details on the four foundational criteria progressively over the past year. Firms now have access to a Workforce Insights Tool on MyMOMPortal, where they can see how they fare on the firm-level criteria of COMPASS and benchmark their performance to industry peers.
C10. Members may recall that under the COMPASS framework, applicants can score points under Criterion 2 on “Qualifications”. Today, employers are already responsible for ensuring the authenticity of their candidate’s qualifications before hiring. To safeguard against gaming by submitting fraudulent educational qualifications, employers who wish to score points under Criterion 2 on “Qualifications” will be required to submit verification proof for qualifications declared on the EP application. We have consulted tripartite partners and industry associations and we will implement this new process in September 2023 together with COMPASS. We will share more details in due course. Rest assured, we will ensure smooth implementation and we will minimise disruptions to employers’ hiring process.
C11. We will be releasing further details on the two bonus criteria, the Skills Bonus (Criterion C5) and the Strategic Economic Priorities Bonus (Criterion C6), later this month. Applicants meeting the respective criteria will earn bonus points towards their total COMPASS score.
C12. The Skills Bonus is accorded to EP applicants in occupations on the Shortage Occupation List (SOL). The SOL identifies occupations requiring niche and highly specialised skills in short supply within our workforce, and which are critical to sustaining investments in both key growth or strategic priority areas.
C13. Mr Gerald Giam asked for an upate on the occupations expected to be included in the SOL. MOM, in consultation with sector agencies, is finalising the inaugural SOL. I would like to assure Mr Giam that the evaluation process is a rigorous one, taking into account quantitative metrics of shortage alongside various qualitative factors. One key consideration is ensuring that sector agencies have worked with industry to put in place plans to develop the local pipeline for these good jobs, including working with our Institutes of Higher Learning to equip graduates with the necessary skills, as well as developing and upskilling those already in the sector or adjacent roles. Where relevant, the sector agencies also obtained input from industry partners and unions.
C14. The SOL will include specialised roles spanning areas such as tech, healthcare, and sustainability, where there are global shortages of skilled professionals. The SOL will be reviewed regularly, with a major refresh every three years – this ensures that the SOL is responsive to industry developments, while preserving enough certainty and runway for businesses.
C15. The Strategic Economic Priorities (SEP) Bonus was designed together with MTI, participating economic agencies and the labour movement NTUC. This is a highly selective bonus which supports firms that are contributing to Singapore’s strategic economic priorities through ambitious investment, innovation, internationalisation, or company and workforce transformation activities. Economic agencies will work with firms receiving the SEP Bonus to pursue these needle-moving economic priorities and who are able to demonstrate their commitment to developing our local workforce. NTUC will work with firms on company and workforce transformation efforts, for example, by establishing Company Training Committees to chart out worker upskilling plans. Firms receiving the SEP bonus would be expected to maintain healthy workforce profiles on nationality diversity and local PMET employment, as a condition for renewal.
C16. Full details will be released on MOM’s website by the end of March.
C17. Mr Patrick Tay asked for an update on the Fair Consideration Framework (FCF). Since 2016, MOM has engaged a total of more than 1,800 employers under the FCF. As I announced at last year’s COS, COMPASS builds on our current efforts under the FCF by applying firm-related attributes at the point of application. Once COMPASS is rolled out, the FCF Watchlist will be re-purposed to focus on firms scoring poorly on the firm-related attributes. TAFEP will conduct workshops for these firms to highlight measures that firms can take to improve their hiring practices.
C18. Mr Tay also asked to publish the list of companies with weak workforce profiles. I have explained before that doing so will affect the business of these firms and potentially hinder their effort to improve their practices. Instead, our approach is to have TAFEP work with them to improve their practices. Please rest assured that MOM will continue to take fair consideration seriously, and I will elaborate on our efforts under the Workplace Fairness Legislation in the second part of my speech.
C19. Mr Choo and Mr Cheng have suggested calibrating our foreign workforce policies further, to address issues such as insufficient locals in certain sectors, or in anticipation of our ageing population. We already do so today – sectors such as Construction and Process have higher foreign worker quotas as we recognise that fewer locals join these sectors, and we exercise flexibilities to better support essential services like healthcare and cleaning of public housing. Our moves announced last year also took on a more nuanced and targeted approach. For instance, businesses that can contribute to our strategic economic priorities can tap on the Manpower for Strategic Economic Priorities scheme (M-SEP) to access additional quotas.
C20. Another example is the Non-Traditional Source (NTS) Occupation List. Members would recall that I announced this last year, to allow employers in the Services and Manufacturing sectors to hire Work Permit Holders from NTS countries for seven occupational types. This NTS Occupation List is intended to help firms adjust to the S Pass qualifying salary and levy increases. We will hence implement the NTS Occupation List on 1 September this year.
C21. Employers who wish to hire NTS Work Permit Holders will be subject to a sub-quota of 8% and a fixed monthly salary criterion of at least $2,000. The sub-quota guards against over-reliance on NTS workers and ensures that employers diversify their workforce. The salary criterion safeguards against cheap-sourcing and incentivises employers to hire higher-skilled or more experienced workers from these source countries . Employers who are putting their existing NTS S Pass holders on Work Permits will have no trouble meeting the salary criterion. MOM will continue to work closely with agencies and industries to review the NTS List from time to time.
D. "STRENGTHENING SUPPORT FOR YOU”: PROTECTING OUR VULNERABLE WORKERS
D1. Members of the House, our growth must also be inclusive so as to enable all segments of our workers to reap the benefits. We will therefore also further strengthen our support for you. Let me share how we are doing so, especially in the area of retirement adequacy. SMS Koh and Zaqy will elaborate further on how we intend to strengthen protection and support for Platform Workers, lower-wage workers, senior workers and migrant workers in their speeches.
E. “STRENGTHENING SUPPORT FOR YOU”: RETIREMENT ADEQUACY
E1. Even as we were tackling the immediate challenges of the pandemic, we maintained a steady focus on our longer-term objective of enhancing our workers’ retirement adequacy.
Enhancing the CPF system especially for vulnerable segments
E2. Mr Samad and Mr Saktiandi Supaat asked for an update on the retirement adequacy for Singaporeans. We recognise that the number of retiree households has been increasing, and have been enhancing the CPF system; especially for the vulnerable segments who may require further support, including our senior workers and lower-wage workers.
E3. Over the last decade, the proportion of active CPF members attaining their cohort Basic Retirement Sum (BRS) at age 55 has improved from about 5 in 10 to almost 7 in 10 today. We expect this number to increase to about 8 in 10 in 2027.
E4. Mr Mohd Fahmi Aliman and Mr Yip Hon Weng spoke in favour of enhancing the employability of seniors. This is an important strategy to help CPF members continue to build up their retirement nest egg through employment even after age 55. SMS Koh will be elaborating more on our efforts in supporting the retirement adequacy for senior workers.
E5. We also provide additional support for our lower-wage workers. We implemented enhancements to the Workfare Income Supplement Scheme (WIS) this year to increase the maximum annual payments, up from $4,000 to $4,200, and expanded coverage so that over half a million lower-wage workers can benefit. Together with the enhanced WIS, our efforts in uplifting the wages of lower-wage workers will help them to save more for their retirement. SMS Zaqy will share more details later.
E6. For seniors who require further support for their retirement
(a) CPF payouts are one of the many sources of retirement income.
(b) Seniors may also receive targeted support from the Government through schemes such as ComCare and the Silver Support Scheme, which we enhanced in 2021.
(c) Further, at Budget 2023, the Government announced enhancements to the Assurance Package and permanent GST Voucher scheme, to help Singaporeans tide through this period of higher inflation and to cushion the impact of the GST rate increase.
(d) In addition, seniors who are able to, may also tap on their accumulated private savings if available. If not, they may receive additional support from the community such as through charities.
Ensuring relevance of the CPF system for all
E7. As you can tell, we are building from a position of strength. We are doing more to enhance the CPF system.
E8. Mr Louis Chua asked for a review of the interest rates for the CPF Ordinary Account or OA. We are aware that the OA pegged rate has remained relatively stable amidst the current elevated interest rate environment while the yields of other market instruments of comparable risk and duration have increased. Let me reassure the Member – we are watching the interest rate environment very closely to ensure that the CPF interest rate pegs remain relevant in the prevailing operating environment while taking into consideration the longer-term outlook.
E9. Even as we study this, I should point out that during the low interest-rate environment of the last decade, we have paid a fair interest rate. The 2.5% floor for the OA has exceeded the pegged rate for over 20 years, even when market interest rates were low, such as during the Global Financial Crisis.
E10. Mr Saktiandi asked if we intend to revise the interest rates on the respective CPF Accounts as market interest rates crossed 4% in 2023. The Special Account interest rate is pegged to the twelve-month average yield of 10-year Singapore Government Securities (SGS) plus 1% and is reviewed quarterly. This helps to smoothen the short-term market fluctuations on the interest rates. If the pegged rate exceeds the floor rate of 4%, members will correspondingly earn the higher interest rates (of the two) on their CPF savings.
E11. On top of this, the Government has and will continue to pay 1% of extra interest on the first $60,000 of members’ combined CPF balances, including the first $20,000 in members’ OA. Members aged 55 and above receive 2% extra interest on the first $30,000 of combined CPF balances, and 1% on the next $30,000.
E12. Mr Louis Chua also asked if the CPF Investment Scheme (CPFIS) could be made more comprehensive and if there could be more direct means by which members can earn higher investment returns other than via CPFIS.
E13. Mr Chua has raised similar points last year. With the benefit of hindsight, it will always appear easy to achieve higher rate of returns. But we have said before that higher returns come with higher risk, and a greater potential for losses.
E14. Today, CPF members can invest in a diverse range of products including exchange-traded funds, shares and gold products.
E15. Members who prefer not to take any risks with their retirement savings already enjoy risk-free interest rates of up to 6% per annum on their CPF savings, where investment risk is entirely borne by the Government.
E16. I would like to reassure Mr Louis Chua that in addition to our recent enhancements to the CPF system, we review CPF interest rates and the range of investment products under the CPFIS regularly to ensure that they remain relevant to members’ needs and the changes in the operating environment.
E17. I would also like to thank Mr Pritam Singh for his suggestion during the recent Budget debate to reallocate a greater proportion of CPF contributions for younger members to their Special Account. This was raised by Ms Cheryl Chan during the CPF (Amendment) Bill in 2021, and by Mr Saktiandi Supaat during his cut. We are considering this idea and are very glad members have come out to support it. I sincerely hope that if and when we eventually put up the proposal, the Workers’ Party would be in full support of it.
E18. [Announcement at Budget] To help middle-income Singaporeans save more for retirement, we will also be raising the CPF monthly salary ceiling from $6,000 to $8,000 in 2026 to keep pace with rising salaries. This will be done in phases, starting with $300 this year, to allow employers and employees to adjust to the changes. There will be no change to the annual salary ceiling at $102,000.
E19. An example of a worker who is supportive of the higher salary ceiling is Mr Fadzli Jamil. He is 38 years old and the Associate Dean in the School of 3D Design at the Nanyang Academy of Fine Arts. As a result of just raising the monthly salary ceiling for his CPF contributions, he can expect around an additional $100,000 in his combined CPF balances or a $500 increase in his monthly CPF LIFE payouts if he works until age 65 and starts his payouts then. For each year, should he choose to defer the start of his payouts, his monthly payouts will increase further, by up to 7%.
E20. Employers’ business costs are also likely to remain manageable, as the increases are spread out over four years. The additional business cost impact is around half a billion per annum, because not all workers are affected by the maximum increase of $2,000, and the annual salary ceiling which remained unchanged at this juncture will also limit the impact on business costs.
Fundamental review under Forward Singapore Exercise for retirement adequacy
E21. As part of the Forward Singapore Exercise, we are taking a deeper look at what should be done to improve the retirement adequacy of Singaporeans. This is especially relevant with greater economic uncertainties amidst global challenges, at least in the medium term.
(a) For the group that are in their 50s and early 60s today, they have a limited runway to work and save. With this in mind, we will review our range of solutions both from within and outside the CPF system, such as work-based incentives and the Silver Support Scheme to give them greater reassurance that they can meet their basic retirement needs.
(b) We will also do more for our younger and middle-aged workers and the Pioneer and Merdeka Generation seniors, many of whom are retirees.
E22. Ultimately, we want to strengthen our support such that as long as you work and contribute consistently to your CPF, you will be able to meet your basic retirement needs. We will provide further updates on our efforts to strengthen the CPF system in due course.
F. CONCLUSION – THE WAY FORWARD
F1. Let me now conclude the first part of my speech.
F2. I believe that if we journey through the crossroads together, we will be able to align the crossroads and forge a new social compact - one where the Government, employers and our fellow Singaporeans can work together to improve career prospects, strengthen retirement adequacy, and bring fair levels of reward and respect for all forms of work. It is one where no worker is left behind as Singapore progresses.
F3. In your working years, we will empower you to find and work towards new opportunities if you take the first step. We will also help you to upskill, to reskill, and facilitate your job search based on your skills and interests. With improved career health, you will be able to stay ahead of technological trends and seize many new job opportunities within and beyond your sector.
F4. In your golden years, we will support you such that you will be able to have peace of mind if you have worked and contributed consistently to your CPF.
F5. I look forward to having more conversations with you and working together to create an inclusive society, abundant and brimming with opportunities.
F6. I will share more about securing better workplaces with you in the next segment of my speech. Thank you.
G. “SECURING BETTER WORKPLACES WITH YOU”
G1. SMS Koh, SMS Zaqy, MOS Gan and I have shared about MOM’s three themes for this COS: Seizing opportunities with you, Strengthening support for you, and Securing better workplaces with you. I have earlier covered the first two themes and I will now touch on the third; how we stand in solidarity to secure safer, fairer and more progressive workplaces with you. We are doing so in a couple of ways.
G2. MOS Gan has shared details of our efforts to support our women at work, and help Persons with Disabilities and ex-offenders find employment. SMS Zaqy has also elaborated on our efforts to ensure safety in the workplace.
G3. Now, let me share about the workplace fairness legislation, which is a significant step towards ensuring a level playing field. Members will have seen the 20 interim recommendations by the Tripartite Committee on Workplace Fairness, which I co-chair with Brothers Ng Chee Meng and Dr Robert Yap.
G4. Calls for legislation date back to 1998, with various parties, including labour MPs, proposing for legislation to strengthen our efforts in tackling discrimination. Indeed, this significant move is going to strengthen our overall framework to uphold workplace fairness. Mr Gerald Giam asked for comprehensive protection for persons with disability, while Mr Leong Mun Wai suggested to cover sexual orientation in the legislation. They both can be assured that all forms of discrimination are not tolerated. This is our national policy, and it is reflected in the Tripartite Guidelines for Fair Employment Practices today (TGFEP).
G5. The Tripartite Committee has recommended that the new legislation provide stronger protection against discrimination on the grounds of nationality, age, sex, race, religion, disability and mental health conditions. Stronger protection against discrimination in the proposed areas also supports Singapore's key social and economic objectives. For instance, protecting against discrimination on the grounds of age helps to support the employment of mature workers, which is critical for our ageing society. These characteristics are the common and familiar forms of workplace discrimination in Singapore. Together, they account for more than 95% of discrimination complaints received by TAFEP and MOM in the past five years. We have experience dealing with these cases, and we are confident to mediate them effectively. Tripartite partners will work with relevant stakeholders to ensure that there is clarity on issues such as definitions and scope of employers’ responsibilities, to enable the legislation to achieve its intended effect.
G6. Some MPs have raised suggestions on the legislation. Mr Leong asked how the legislation will address job security for Singaporeans. Legislation will benefit Singaporeans by better protecting them against workplace discrimination. There will be a wider range of enforcement levers against errant employers that are more effective as deterrence against workplace discrimination. The Fair Consideration Framework job advertising requirements will also be legislated, which will allow us to take action against employers who breach this requirement using the new enforcement levers.
G7. The Tripartite Committee has also recommended protection against retaliation for those who report workplace discrimination or harassment, to give assurance to employees to come forward to report it. The majority of complaints on nationality discriminations are by locals indeed, so they will benefit from the greater protection.
G8. Mr Leong also suggested small firms should not be exempted from the legislation. Small firms may not have the corporate competencies to comprehensively implement the new rules from day one, as the proposed legislation is only the first step. We will exempt small firms with fewer than 25 employees for a start. Workers in small firms, however, will continue to still be covered by TGFEP. Those who are unfairly dismissed can lodge claims with the Tripartite Alliance for Dispute Management (TADM). For these employers, we will also step up education and enforcement efforts via the TGFEP. The Tripartite Committee agrees that we will monitor the ground situation after legislation is introduced, and review the exemption with a view to tightening it within five years.
G9. Mr Leong referred to a specific case in a religious organisation in 2013. For that case, based on prevailing guidelines and laws, the church did not have sufficient grounds to dismiss the employee. With the introduction of the workplace fairness legislation, the tripartite committee consulted various agencies, religious organisations and advocacy groups on their views. We recognize that maintaining religious harmony is important in our multi-religious society. It is therefore important to give religious organisations the space to practice their religion. As such, given the purpose and the character of religious organisations, the Tripartite Committee has recommended allowing religious organisations the discretion to make employment decisions based on religion and their religious requirements. It must be emphasized that this discretion given to religious organisations is very carefully scoped. It will only apply to places of worship and religious organisations with sole religious purpose and function. It will also not allow them to discriminate based on other protected characteristics where there is no religious basis to do so.
G10. On the question of Vaccination Differentiated Measures, we have reached out to and offered employment assistance to the unvaccinated workers. They can also approach WSG or e2i if they require further assistance. Workers who feel that their employers are imposing vaccination as a requirement without genuine occupational needs may approach MOM or TAFEP for assistance. Since the release of the updated advisory on COVID-19 vaccination at the workplace in October 2022, there has only been a handful of such complaints.
G11. Ms Janet Ang and Ms Yeo Wan Ling will be assured to know that we will also continue to engage employers, employees, HR partners and other key stakeholders to make clear the intent of the legislation and the whole-of-society effort required to uphold workplace fairness. During the implementation process, we will also work with NTUC to help employees to better navigate the case management process and seek remedies for their grievances. And we will work with SNEF to guide employers to adopt fair employment practices and comply with the legislation. Even as we introduce stronger worker protections in legislation, we want to preserve Singapore's harmonious and non-litigious workplace culture. To this end, the Committee has also made recommendations to encourage disputes to be resolved within the firm in the first instance, and if not, through mediation to repair the employment relationship where possible, with adjudication at the courts only as a last resort. We will continue to welcome all feedback, including from MPs today. The Tripartite Committee will take the feedback into consideration for its final recommendations.
H1. With that, Mr. Chairman, let me now conclude in Mandarin.
(a) 换句话说，无论你是处于哪一个年龄层 – 20岁、30岁、40岁，还是年过50 – 我们都会帮助你提升求职能力，续创更好的就业机会。
H5. 所谓：“保健胜于治疗”。国人是否能够持续把握新机遇，关键是在于个人的职业健康。我们必须为自己的职业健康负责，了解职业的需求、行业的发展趋势、以及自己的兴趣和能力。我们将在职业前程配对网站（MyCareersFuture）推出“职业搜寻” CareersFinder功能。这项功能将通过数据分析和人工智能，提供更个人化的职业规划和工作配对辅导。