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Any gotcha in full CPF contribution from employer?

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PNGMK
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Postby PNGMK » Wed, 23 Jul 2014 1:05 pm

Wd40 wrote:
bro75 wrote:Full rate is better IMO. It forces you to save, employer gives the full amount to your cpf and the interest rate is good. The only downside is if you consider yourself a very good investor who can make better returns from your cash.


Given all the furure that is going on right now, among certain section of the citizens, about CPF interest rate and other aspects of CPF, are you sure that full contribution from the employee is the best thing?

Its not about being a better investor or not, its about you being in control of your own money rather and deciding what to do with it rather than not having that choice.

Its true that at the moment the rule is that, you can withdraw all your CPF monies when you give up PR, but who can be sure that this rule wont be changed in the future?


The only possible change or risk I see is that PR's maybe forced to accept an annuity on their minimum sum rather than being allowed to withdraw it should they leave. Even that isn't so bad really. I certainly don't expect to CPF go broke - it's backed by the full force and wealth of the Singapore Gahmen.

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Postby ahiwhr018 » Wed, 23 Jul 2014 5:22 pm

Just an update. The HR threw in an extra condition: employer will only pay the 16% capped at salary of $5000, while I (employee) will have to pay 20% of my full salary (no cap of $5000 for me).

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Postby sundaymorningstaple » Wed, 23 Jul 2014 5:40 pm

You can only pay up to the cap, no more. If you pay more it will have to be refunded. I'd like to know how they plan on doing that, unless they are planning on calling the first $5K your ordinary wages and the balance as "additional" wages. Additional wages, are by definition, not paid for the month just finished (ordinary wages) but for a month previous to the current month. Even then, the limit is capped at a maximum contribution based on a total of 17 months times the monthly cap ($85K/year). But, if they do that, then they will also have to pay on the additional wages as well.

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Postby PNGMK » Wed, 23 Jul 2014 8:29 pm

ahiwhr018 wrote:Just an update. The HR threw in an extra condition: employer will only pay the 16% capped at salary of $5000, while I (employee) will have to pay 20% of my full salary (no cap of $5000 for me).


Something is screwy here. Unless as SMS says they are messing with the 'additional wage' element (or as I suspect is more likely) using your 'employee contribution' to offset their employer contribution.

I KNEW what you thought you were getting was to good to be true. There is ZERO incentive for employers to be biased towards the non-graduated CPF scheme unless they can find some way to claw back their extra CPF costs.

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Postby sundaymorningstaple » Wed, 23 Jul 2014 10:09 pm

Take your salary and if it is over the 5K cap, see if the difference between the 20% on the full amount less the 20% on the capped amount (1K) is equal to 16% of the capped amount (the employers share) if it is, the employer isn't paying anything and you are paying the full 36% on the cap of 5K. You will have been well and truly lied to, OR you didn't understand what they were saying, which is probably more like it.

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Postby ecureilx » Thu, 24 Jul 2014 12:33 am

PNGMK wrote:[.

I KNEW what you thought you were getting was to good to be true. There is ZERO incentive for employers to be biased towards the non-graduated CPF scheme unless they can find some way to claw back their extra CPF costs.


SMEs do what you say, you got to see around ...

all my past employers, except two cheapskate SMEs, insisted on full contribution for new PRs, and for foreigners added the employers contribution as 'additional pay'. in return they emphasize that obtaining PR means employee must agree for full contribution ...

and almost often they had the same answer, it is already budgeted ... so doesn't make any difference ...

sorry, I saw this thread late,

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Postby ecureilx » Thu, 24 Jul 2014 12:36 am

Wd40 wrote:.
Its true that at the moment the rule is that, you can withdraw all your CPF monies when you give up PR, but who can be sure that this rule wont be changed in the future?


that is a rumour among subcontinent friends and a few used that excuse to give up PR and recover their CPF in full ...

surprisingly the guys who believe that rumour are in Banking line :p

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Postby PNGMK » Thu, 24 Jul 2014 2:07 am

sundaymorningstaple wrote:Take your salary and if it is over the 5K cap, see if the difference between the 20% on the full amount less the 20% on the capped amount (1K) is equal to 16% of the capped amount (the employers share) if it is, the employer isn't paying anything and you are paying the full 36% on the cap of 5K. You will have been well and truly lied to, OR you didn't understand what they were saying, which is probably more like it.


Probably not lied to but perhaps some obfuscated numbers were presented. I'd be wanting to know what my total salary including all contributions is in this case - for sure it will be calculated as Base + EE + ER + AWS (13 month - if any) as opposed to AWS + Base inclusive of EE and exclusive of ER - quite possibly a substantial ($12,000 p.a.) difference.

I recently shifted employers and the first thing (well second) HR wanted to know is whether I had proof I had been a PR for so many years so they were certain I was not on the graduated CPF system - the young woman was amazed when I told her such a thing didn't exist when I became a PR and my TOTAL ER and EE contributions were promptly deducted from my base once I became a PR (in fact, it was a condition of the company agreeing to support my PR application).

I still think the OP started counting his chickens before they hatched.

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Postby ahiwhr018 » Fri, 25 Jul 2014 2:08 pm

You folks were right. It was a mistake by the HR. Both employer and employee CPF contribution is capped to $5000 salary.

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Postby ecureilx » Fri, 25 Jul 2014 3:22 pm

ahiwhr018 wrote:You folks were right. It was a mistake by the HR. Both employer and employee CPF contribution is capped to $5000 salary.


and the employer contribution isn't from your pocket right? (PNGMK claims it should be from YOUR pocket ;) ;) )

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Postby Mi Amigo » Fri, 25 Jul 2014 4:35 pm

I think what PNGMK was saying was that in some cases (e.g. his case), there's a condition in the original employment contract (signed when an EP is obtained) stipulating that the employee is liable to pay all CPF contributions (employer's and employee's) if they become PR. I don't think he was claiming that this would always happen - it didn't in my case, for example. Depends on what the contract says and/or what is discussed with the employer at the time of applying for PR.
Be careful what you wish for

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Postby PNGMK » Fri, 25 Jul 2014 5:04 pm

Mi Amigo wrote:I think what PNGMK was saying was that in some cases (e.g. his case), there's a condition in the original employment contract (signed when an EP is obtained) stipulating that the employee is liable to pay all CPF contributions (employer's and employee's) if they become PR. I don't think he was claiming that this would always happen - it didn't in my case, for example. Depends on what the contract says and/or what is discussed with the employer at the time of applying for PR.


+1

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Postby ecureilx » Fri, 25 Jul 2014 5:15 pm

Mi Amigo wrote:I think what PNGMK was saying was that in some cases (e.g. his case), there's a condition in the original employment contract (signed when an EP is obtained) stipulating that the employee is liable to pay all CPF contributions (employer's and employee's) if they become PR. I don't think he was claiming that this would always happen - it didn't in my case, for example. Depends on what the contract says and/or what is discussed with the employer at the time of applying for PR.


and i believe I said before also taking all from employee's pocket is wrong ....

lets leave it there then.,.

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Postby PNGMK » Fri, 25 Jul 2014 9:14 pm

I had a large retention bonus come in yesterday. The new MNC that bought my old nice foreign employer had insisted I move to a Singapore contract. I am not sure they'd realized that once my retention bonus hit they'd be liable for 10% ER CPF on top of it! A very large, unexpected bonus on a bonus. Of course I lost some of the RB to EE CPF but that's ok.

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Postby Wd40 » Fri, 25 Jul 2014 10:13 pm

ecureilx wrote:
ahiwhr018 wrote:You folks were right. It was a mistake by the HR. Both employer and employee CPF contribution is capped to $5000 salary.


and the employer contribution isn't from your pocket right? (PNGMK claims it should be from YOUR pocket ;) ;) )


Many IT vendors(body shopping companies) I know do this. But then its explicitly written in the contract, that employer CPF contribution is currently part of the package, I think I have mentioned this atleast 50 times on this forum oredi :oops:


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