Lawrence Wong: Higher CPF Salary Ceiling Needed to Avoid “Storing Up More Problems”

DPM and Finance Minister Lawrence Wong has said it is necessary the CPF salary ceiling to keep pace with inflation to avoid “storing up more problems”.

He said this in response to a question on CAN’s Ask the Finance Minister programme on Fri (17Feb).

“But we also need to look at the long term. Retirement adequacy is a very important issue and if we don’t start building up for our retirement, we are storing up more problems for ourselves and for society.”

He added:

“The CPF salary ceiling ought to be keeping pace with inflation. That’s the right way to think about this. It can’t be that we set the salary ceiling at S$6,000 and forever it doesn’t change.”

In his Budget 2023 speech, Wong announced that the CPF monthly salary ceiling will be increased in stages from S$6,000 to S$8,000 by 2026.

The move was to “keep pace with rising salaries” and would help middle-income Singaporeans save more for their retirement.

However, middle-income Singaporeans and Small-Medium Enterprises are upset with the increase.

SMEs say that they are already facing cost pressures on other fronts, such as the rise in foreign worker levies, local qualifying salaries and wage adjustments under the Progressive Wage Model, and raising the CPF salary ceiling will further impact manpower costs.

Middle-come Singaporeans are worried that during this period of high inflation and the looming threat of a recession, they will have to further tighten their belts as they will have less disposable income.

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