The Tripartite Workgroup on Older Workers suggested in 2019 that senior workers who are over 55 to 70 years old should have their CPF contribution rates gradually increased in order to assist them save more money for retirement. This would help to boost the retirement adequacy of these workers.
On January 1, 2022, and January 1, 2023, respectively, the first two stages of the hikes went into effect. With a long-term goal of implementing the entire increase by 2030, the government kept raising the older worker contribution rates in 2024.
(a) In order to assist older employees in increasing their retirement savings, the Special Account has received the entire increase in CPF contribution rates.
(b) The employee contribution rates are still being phased in for people making more than $500 to $750 per month.
(c) The graded contribution rates for first- and second-year Singapore Permanent Residents remained unchanged.
1. From January 1, 2025, the CPF Ordinary Wage ceiling will increase
a) The CPF Ordinary Wage (OW) ceiling sets a maximum amount of OW that qualifies for CPF contributions for each employee during a given calendar month. By 2026, the OW maximum will be increased to $8,000. Since September 1, 2023, the rise has been implemented in four stages to give employers and employees time to adjust.
(b) The $102,000 annual salary cap for CPF, which establishes the maximum amount of CPF contributions payable for all salaries earned in the year, including both Ordinary Wages and Additional Wages, will remain unchanged.
(c) The CPF Annual Limit and Additional Wage cap will stay at [$102,000 – Total Ordinary Wage subject to CPF for the year] and $37,740, respectively. There won’t be any modifications made to these figures.
2. CPF Contribution Rates Will Increase Effective January 1, 2025
(a) To improve their retirement adequacy, employees over the age of 55 to 65 will see an increase in their CPF contribution rates as of January 1, 2025.
(b) To assist senior workers in saving more for retirement, the increase in CPF contributions for employees over the age of 55 to 65 will be entirely allocated to the Retirement Account (RA), up to the Full Retirement Sum (FRS), upon the closing of the Special Account. Contributions will go into the employee’s Ordinary Account if they have placed the FRS in their RA.
(c) The employee contribution rates are being phased in for people making more than $500 to $750 per month.
(d) The graded contribution rates for first- and second-year Singapore Permanent Residents (SPRs) shall remain unchanged.