Tuesday, December 19, 2006

Should employer pay more CPF?

There is some discussion in the newspaper on the need for the employer to increase the contribution rate to the Central Provident Fund.

The final outcome is not significant in financial planning. It is clear that the CPF is no longer the sole source of funds for retirement.

Each person must have personal savings to ensure an adequate retirement. The CPF contribution can make an important portion of the total savings, but it has to be supplemented by personal savings.

I recommend that each person should have personal savings in a flexible investment account, such as the Flexi-Link that is offered by NTUC Income. We will make it easy for our policyholders to top up their savings in the Flexi-Link and enjoy bonus units of 2% (to reduce the upfront cost).

We will also make it easy for topping up. Just call our hotline, and make your payment within 14 days. If you invest with CPF, we will arrange for deduction from CPF.

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