System to Detect Non-payment of CPF Contributions

Dr Chia Shi-Lu asked the Minister for Manpower in light of the Report of the Auditor-General for FY 2013/2014 on the Ministry's failure to detect under-payment of CPF contributions over a period of 10 years to a company's employees who performed National Service (a) whether the system for detection will be improved; (b) how will this be done; and (c) when will the new detection system be activated.

Mdm Speaker, I would like to thank the Member for his question. The CPF Board has several measures in place to ensure the timely and accurate payment of CPF contributions. This includes an automated system to detect late payments, as well as proactive audits on employers. CPF Board cannot carry out its audit exhaustively on each and every one of the 140,000 employers on a yearly basis. With every system that covers such a wide-ranging number of companies, what we do is we take a risk-based approach. We target our enforcement effort at higher risk industries and firms, and complement it with an investigation regime on complaints that are lodged by employees or whistle-blowers. Through this approach, in 2013, CPF Board recovered $420 million in late, under- and non-payment of CPF contributions for more than 250,000 workers.

CPF Board's audit checks include CPF contributions for NSmen's make-up pay. Among the reasons for underpayment or non-payment of CPF contributions, errors made on NSmen's make-up pay contributes a relatively small factor.

We do take the AGO's findings seriously. It is important that these findings are surfaced. CPF Board has strengthened its audit process to better detect employer CPF liabilities arising from NS make-up pay. It now further requires employers to declare which of their employees have gone for reservist training and provide supporting documents, including an acknowledgement from MINDEF, on the NS make-up pay amount.

CPF Board also works with MINDEF to educate and remind employers that they are required to make CPF contributions for the period that their employees are on NS training.

I thank the Minister for his comprehensive reply. I just have one supplementary question, which is also more of a suggestion. I understand, for certain types of make-up pay, the NSmen get a notification telling them the amount paid, when it is going to be paid and so on. I was wondering whether the appropriate agencies will look into such a notification system for those who have smartphones or maybe through email alerts, so that the NSmen can be more aware when these things are paid. Of course, if the amounts are wrong or if there is no payment, then the NSmen will be aware of these lapses. I was wondering whether MOM could coordinate something to look into this form of

Page: 19

notification system.

Mdm Speaker, we will be quite happy to take on board any suggestion or approach that will help us to enhance the system.