WORKERS in Singapore got a May Day present when Prime Minister Lee Hsien Loong gave the Government's nod to a partial restoration of employers' Central Provident Fund contributions in view of the healthy economic outlook.
At the annual May Day Rally on May 1, PM Lee announced a 1 percentage point increase in the employers' contributions to applause from the 1,400 unionists and guests present.
Even employers had cause for cheer as the two-stage increase - half in September and the remainder in March next year - will give them sufficient time to adjust to the new total rate of 35.5 per cent.
And Mr Lee held out another promise: If the economy continued to perform well, total contributions could inch up a further 0.5 percentage point to the target rate of 36 per cent within a year or two.
"But we need to watch our overall costs, and make sure we stay competitive internationally," said Mr Lee.
With the increase, the employers' rate will be brought to 15 per cent in September, and to 15.5 per cent next March.
The first increase will go to CPF Medisave accounts, and the second to Special Accounts to build up savings for workers' retirement and medical needs.