Company CPF Contribution for Non PR Foreigner

[pacer0928]

Hello everyone, to my knowledge, foreign workers on Employment Passes are not enrolled into CPF program.

I was wondering under this situation, does the company pay you in cash the contribution they would have put into your CPF account?

I have heard from a local friend that this is possible.

Please comment! Thank you very much.

[Strong Eagle]

No. Why would a company pay more than legally obligated or by contract with you?

[bogdang]

My company has a pension plan for foreigners which kind of makes up for the fact that you cannot participate in CPF.
I'm guessing only large MNCs do it.

[sundaymorningstaple]

Mandatory CPF Contributions for EP holders was stopped in 1995 and voluntary contributions by EP holders were stopped a couple of years later but I cannot remember the actual year that this happened nor can I find it on the CPF site.

[apollo_69]

I've just had an offer from an MNC consulting shop which states that CPF contributions will be added to my salary until and unless I take permanent residency / citizenship.....best to check with your employer on a case by case basis of course.

[sundaymorningstaple]

So basically they are giving you a 14.5% uplift on your basic salary. CPF is computed as 34.5% of your Basic Salary, with 20% being contributed by the employee and 14.5% being contributed by the employer. This way, the employer doesn't take on an added cost burden if you suddenly apply for PR as the employer as pre-figured his total employment costs with CPF costs factored in and has therefore negotiated a figure that is within a range that will allow for the add-on of 14.5% and still be within their total employee cost budget if you decide to opt for PR later.

[ringo100100]

I have worked for three companies here, one local and two US, all have paid me the employers CPF. But it is capped at a certain level.

I guess they don't have too, but all that I have spoken to do. If they didn't, I would want it rolled into my basic.

[sundaymorningstaple]

I have worked for three companies here, one local and two US, all have paid me the employers CPF. But it is capped at a certain level.

I guess they don't have too, but all that I have spoken to do. If they didn't, I would want it rolled into my basic.

At least that's what they told you. Did you become a PR while at any of them?

I ask, as that is the only way you would know for sure as then you would have taken a 34.5% cut in your take home pay. Well, technically you would have seen a 14% cut in your take home pay as it's graduated for the 1st & 2nd year with the 1st year as 9% deducted from the employee salary and 5% paid by the employer. But, if they were originally giving you your basic "plus" the employers share then they would take away both from your salary or 14%.

[ringo100100]

I am not a PR, just on EP.

The payment comes through as a different line on the pay slip. So I agreed my salary and that comes through 1/12 as basic pay. Then I also get $X under a line called CPF contribution.

Plus when I get my bonus, I get my agreed bonus plus a separate amount called CPF.

I agree they don't have to and i'm surprised they do, but I am happy to accept.

[littlegreenman]

I agree with SMS.

If they tell you they pay you CPF in cash while on EP, what they are really doing is make sure they don't have a cent more cost if you take up PR which would then lower your actual take home salary. So although it might sound good that they pay you CPF in cash while on EP you actually will lose out having a lower salary should you take up PR later.

[Strong Eagle]

I agree with SMS.

If they tell you they pay you CPF in cash while on EP, what they are really doing is make sure they don't have a cent more cost if you take up PR which would then lower your actual take home salary. So although it might sound good that they pay you CPF in cash while on EP you actually will lose out having a lower salary should you take up PR later.

Not to triffle, but why would he have a lower salary later? He'd have the same salary but a smaller take home due to employee CPF deduction.

[littlegreenman]

I agree with SMS.

If they tell you they pay you CPF in cash while on EP, what they are really doing is make sure they don't have a cent more cost if you take up PR which would then lower your actual take home salary. So although it might sound good that they pay you CPF in cash while on EP you actually will lose out having a lower salary should you take up PR later.

Not to triffle, but why would he have a lower salary later? He'd have the same salary but a smaller take home due to employee CPF deduction.

Okay, yes you are right. Don't get me wrong, I am very pro CPF. I am just thinking in terms of take home pay it might squeeze some families financially if both parents take up PR. Which is sad because if they are planning on really putting down routes they should not have to suffer and short term liquidity is a factor.

[ringo100100]

LGM I don't really understand the point.

We both agree a salary. They give me this salary. Then they pay me the CPF on top. Turning into a PR is a red herring.

Currently my total package is equal to that of a PR/ citizen. By rights as an EP they could reduce my package by not giving me the CPF contribution.

[Strong Eagle]

LGM I don't really understand the point.

We both agree a salary. They give me this salary. Then they pay me the CPF on top. Turning into a PR is a red herring.

Currently my total package is equal to that of a PR/ citizen. By rights as an EP they could reduce my package by not giving me the CPF contribution.

I think the only reason they are doing this is because they must have some sort of pay equity policy in place so that 'benefits' like CPF are applied equally for EP's and PR's alike. I bet these companies took advantage of the Provident fund when EP's could contribute.

[littlegreenman]

LGM I don't really understand the point.

We both agree a salary. They give me this salary. Then they pay me the CPF on top. Turning into a PR is a red herring.

Currently my total package is equal to that of a PR/ citizen. By rights as an EP they could reduce my package by not giving me the CPF contribution.

Exactly, to be more specific you both agree a basic salary. Although you might not consider taking up PR one day, many others do and once they are a PR they have a real shortage of income. While I agree that the employee should be paying his 20% I disagree that they should shoulder the employer's 14.5%. That is why there is an employer and a employee contribution in the first place. What happens very often is that the employer deducts 14.5% from the employees salary, which is unjust as it should be the employer's contribution, not the employee's through the employer.

To make it short: what an employer pays an EP should be a basic salary, period. Not basic+CPF equivalent 14.5%.