The initiative follows the financial firm’s voluntarily scrapping of retirement age
Prudential Singapore is the first financial institution to raise its CPF contribution rate for employees above the age of 55.
The move follows last year’s scrapping of retirement age – both of which are aimed at helping older employees be more financially ready for a longer life expectancy.
Effective since 7 August this year, older employees have the option of enjoying the total CPF contribution rate of 37% – similar to that offered to younger workers.
Prudential’s proactive initiatives greatly align with Singapore’s recently announced policy on retirement, which focus on raising the retirement and re-employment ages, as well as CPF contribution rates.
READ MORE: MOM reveals revised retirement policy
Prudential Singapore’s CEO Wilf Blackburn said this new CPF scheme is in line with the company’s ambition to create a more age-friendly workplace.
“We believe in rewarding our people based on performance,” Blackburn said. “It is with this in mind that we have decided to make equal our CPF contributions for all employees, regardless of age.
“Additionally, with rising lifespan and healthcare costs, we recognise that our employees will need to save more to fund their extended years. The additional CPF monies could help them build a bigger retirement nest egg so they will be more financially ready for the future.”
Prudential’s new CPF scheme for its older employees is an opt-in scheme as the insurer recognises that some individuals may prefer to have more disposable income to meet their current needs. It is introduced in close consultation with the Singapore Insurance Employees’ Union (SIEU).
The 37% CPF rate is a joint contribution: 17% coming from Prudential, if an employee voluntarily increases his individual CPF contribution rate to 20%. Currently, the mandatory total CPF contribution rate for employees above 55 is between 12.5% and 26%.
Under the new retirement policy, the Ministry of Manpower aims to raise CPF contribution rates to 37% by 2030 for employees between 55 and 60 years old.
