The Central Provident Fund (CPF) is an important component of Singapore’s social security structure. Introduced in 1953 before coming into effect on 1 July 1955, the CPF is a compulsory savings scheme that requires all employers and employees to contribute a portion of the employee’s monthly gross salary to the provident fund. The introduction of the CPF came at a time when many workers, except those working in the civil service or in some of the larger companies, were not provided with any form of retirement benefits by their employers. As a result, the workers had to depend on their personal savings when they retired, which was insufficient in most cases. To address this problem, the government felt that a provident fund was necessary to ensure that workers could support themselves in retirement.
The idea of setting up the CPF was raised in the Legislative Council on 22 May 1951 when the Central Provident Fund Bill was introduced. The bill was, however, passed by the Legislative Council only on 24 November 1953. The delay was attributed to various factors, including the appointment of a select committee to examine the proposal and the introduction of another retirement scheme by the Retirement Benefit Commission. The alternative model was a pension system that required an employer and an employee to make a weekly contribution of 60 cents until the retirement of the employee. Upon retirement, the employee would then receive a monthly pension of $30. The Legislative Council opted eventually for the CPF scheme and recommended the establishment of a statutory board to manage the fund. The CPF Board was set up on 28 January 1954 following the enactment of the Central Provident Fund Ordinance on 11 December 1953. The CPF office was located in the Victoria Memorial Hall.
When the Central Provident Fund Ordinance was passed in 1953, all workers earning less than $500 were required to make the mandatory 5 percent monthly CPF contribution, with employers contributing a similar amount. An amendment was subsequently made in July 1955 to exempt workers earning less than $200 from contributing to CPF while their employers were still required to pay their share. Presently, there are no CPF exemptions for working Singapore citizens who earn more than S$50 a month.
The CPF has undergone many significant changes since its implementation in 1955. Some of these changes include the creation of the Special Account (1977) and Medisave Account (1984), as well as the liberalisation of the usage of CPF funds for other purposes such as housing (1981) and investments (1986).
1. Reutens, L., & Lee, M. (2000). A people's wealth, a nation's health: The CPF story (p. 8). Singapore: Central Provident Fund Board. Call no.: RSING 354.5957 CEN.
2. Singapore. Supplement to the Laws of the Colony of Singapore. (1953). Central Provident Fund Ordinance 1953 (Ord. 34 of 1953, p. 219). Singapore: Government Printing Office. Call no.: RCLOS 348.5957 SGGAS; Singapore. Ordinances of the Colony of Singapore passed during the year... (1955). Central Provident Fund Ordinance 1955 (Ord. 25 of 1955, p. 1). Singapore: Government Printing Office. Call no.: RCLOS 348.5957 SIN [RFL]; It’s law now – but still a riddle. (1955 July 1). The Straits Times, p. 7. Retrieved from NewspaperSG.
3. Central Provident Fund Board (2011, June 30). Looking back. Retrieved June 25, 2014, from Central Provident Fund Board website: http://mycpf.cpf.gov.sg/CPF/About-Us/HistoryofCPF.htm
4. Cheong, C. (2005). Saving for our retirement: 50 years of CPF (p. 18). Singapore: SNP Editions. Call no.: RSING q368.40095957 CHE.
5. Provident fund for all employees. (1951, January 16). The Singapore Free Press, p. 5. Retrieved from NewspaperSG.
6. Benefit bill for committee. (1951, May 23). The Straits Times, p. 5. Retrieved from NewspaperSG.
7. Colony of Singapore. Proceedings of the Legislative Council. (1953, November 24). Third Reading of the Central Provident Bill (Vol. 3, pp. B366). Singapore: Government Printing Office. Call no.: RCLOS 328.5957 SIN; Now the workers need not fear the day they have to retire. (1953, November 25). The Singapore Free Press, p. 2. Retrieved from NewspaperSG.
8. Colony of Singapore. Proceedings of the Legislative Council. (1953). Report of the Select Committee on the Central Provident Fund Bill (No. 65 of 1953) (Vol. 3, p. C427). Singapore: Government Printing Office. Call no.: RCLOS 328.5957 SIN; Cheong, 2005, p. 18.
9. Reutens & Lee, 2000, p. 7.
10. Reutens & Lee, 2000, p. 7.
11. They will run the big fund. (1954, January 29). The Straits Times, p. 4. Retrieved from NewspaperSG.
12. Death could mock the law. (1955, July 6). The Straits Times, p. 4. Retrieved from NewspaperSG.
13. Cheong, 2005, p. 18.
14. Boon, G. T. (1953, December 1). Provident fund gets a big welcome. The Singapore Free Press, p. 12. Retrieved from NewspaperSG.
15. Cheong, 2005, p. 18.
16. Ministry of Manpower. (2012, December 13). CPF contributions. Retrieved from Ministry of Manpower website: http://www.mom.gov.sg/employment-practices/employment-rights-conditions/workright/Pages/cpf-contributions.aspx#employees
17. Reutens & Lee, 2000, p. 7.
The information in this article is valid as at 2014 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.