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Second Minister for Manpower
Mrs Josephine Teo
COS Speech 2018
Transform and Grow - Update on LEDS
A1. Mr Chairman, I will be sharing what more MOM is doing to help Singaporeans have better jobs, better employment outcomes and better protection.
A2. Let me start with better jobs.
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A3. Given that our workforce growth is slowing, our businesses have to become more manpower lean.
A4. At the same time, businesses may need to redesign jobs to support an ageing workforce or be more attractive to local jobseekers, who now have higher aspirations.
A5. MOM together with several sector lead agencies are helping businesses transform through the Lean Enterprise Development (LED) Scheme.
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A6. Ms Jessica Tan asked about its effectiveness. Since its launch in Oct 2015, we have built up good momentum.
A7. We have helped about 6,700 companies, which is three times the number a year ago.
Example 1 (Manpower lean)
A8. One interesting project was undertaken by the Gratify Group - a company which owns many different F&B brands.
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A9. Owner Frank Lau wanted to make sure that his company’s expansion plans would not be held back as a result of a lack of manpower.
A10. Hence, when conceptualising its new brand – “Omoomodon”, he set himself a challenge
i. That every outlet must be able to operate with just three staff per shift,
ii. When most similar concepts needed at least 5 staff per shift.
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A11. In the F&B business, what Frank wanted was certainly a tall order.
A12. But Frank believed he needed to push the boundaries to have any chance of scaling the business in a sustainable way.
A13. He engaged the Singapore Productivity Centre (SPC) to re-design his workflow and processes.
A14. They started with the menu, with food preparation very much in mind.
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A15. They studied operational flows at many food outlets, and collected data on time- consuming tasks
A16. The end result included a central kitchen, self-service ordering and payment, and optimised kitchen designs.
A17. Staff were also crossed-trained to prepare food and attend to customers.
A18. The improved job scope resulted in better pay and higher retention:
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i. Salaries offered by Omoomodon are on average 15% higher than market rate,
ii. There is lower attrition as workers are more motivated to stay with the company.
A19. Thanks to these measures.
i. Manpower required for each new outlet was reduced by up to 60%.
A20. This example shows how transformation is possible. 7
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A21. The LED Scheme supports such transformation.
A22. It provides a “one-stop” service for businesses, especially SMEs, to access schemes offered by different Government agencies, without having to figure out where and who to approach for what.
A23. However, not all transformations need customised solutions like Frank did.
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A24. Many businesses will benefit just adopting ready-to-go (RTG) productivity solutions.
A25. For example, the Smart Management & Tracking System or SMTS
i. Uses RFID technology to manage, track and audit assets to reduce stock taking time
ii. Useful for nearly all businesses in manufacturing and retail.
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A26. There are now more than 40 RTG solutions pre-approved by Government agencies such as SPRING Singapore, A*STAR and IMDA.
A27. These RTG solutions have been tried and tested, so there is no need for businesses to worry about ineffective solutions, or fly-by-night vendors.
A28. Through the LED Scheme, we aim to make technology and innovation pervasive:
i. Not only at the enterprise level,
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ii. But also at the industry level.
iii. Not just in 1-2 sectors, but across all the 23 ITM sectors.
A29. For instance, under the Lean Hotel Initiative:
i. 16 hotels came together to collectively identify gaps and design industry solutions.
ii. In just four months, the hotels had achieved productivity savings of between 4.5% to 28%, without having to compromise service quality. 11
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A30. We also plan to go beyond ITMs to non- ITM sectors,
A31. And are in discussions with several industries such as furniture, farms, lifts and escalators to support their transformation.
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Update on Adapt and Grow
B1. As businesses transform and jobs become better, so too must workers adapt.
B2. This is how we can achieve better employment outcomes.
B3. As mentioned by Minister Lim, the Adapt and Grow initiative helped place more than 25,000 jobseekers into new jobs and careers in 2017, about 20% more than in 2016 (around 21,000).
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B4. Broadly speaking, we aim to help both
i. Missed matches – where employer and jobseekers have not found each other – and
ii. Mismatches – where there are skills or wage gaps that make it hard for the jobseeker to secure a job.
Update on “missed matches” - My Careers Future
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B5. Of the 25,000 jobseekers placed, ~ 60% involved missed matches (~15,000) i. The jobseekers were job-ready but somehow missed finding the right employers.
ii. WSG and NTUC-e2i helped them to find a match.
B6. Mr Patrick Tay and Mr Chong Kee Hiong asked for an update on our efforts to strengthen job matching through the national Jobs Bank.
B7. We are transforming JobsBank into a new platform called MyCareersFuture. 15
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B8. MyCareersFuture will have new features to help jobseekers and employers find better matches:
i. It will have intelligent job matching, and can recommend jobs to jobseekers that would best fit their skill sets.
ii. It will also highlight jobs that are supported by Adapt and Grow programmes such as PCPs, to help bridge job and skill mismatches.
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B9. MyCareersFuture has been up and running since 2 Jan 2018, and the portal will be officially launched in 2Q 2018.
Update on mismatch – PCP and CSP
B10. Besides reducing missed matches, we helped to close skills or wage mismatches.
B11. Of the 25,000 jobseekers placed, 40% involved jobseekers with some form of mismatch. This proportion has grown significantly, from just 25% in 2016.
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B12. Placements of mismatch cases doubled from ~5,000 in 2016 to ~10,000 in 2017.
B13. This reflects our more intensive efforts to address mismatches.
B14. As our economy restructures, job-skills mismatch will be a growing challenge.
B15. This can be very unsettling for individuals who have lost their jobs or are at risk of retrenchment.
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B16. This is why our key focus has been to step up support for jobseekers with skill or wage mismatches, because they need more help.
B17. Last year, we strengthened support under the Professional Conversion Programme (PCP) and Career Support Programme (CSP).
B18. Associate Professor Faishal Ibrahim, Mr Low Thia Kiang and Dr Intan asked how effective MOM’s efforts have been in helping the long–term unemployed (LTU), older workers and mature PMETs.
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B19. If members recall, the CSP provides a wage subsidy that helps to close the gap between what PMET jobseekers expect and what employers are prepared to offer.
B20. With the enhanced wage support under CSP,
i. Placements have quadrupled,
ii. From about 260 in 2016 to over 1,100 in 2017.
iii. Among the CSP placements, more than 80% were LTUs. 20
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iv. The retention rate of those placed has been encouraging.
v. Within 12 months of placement, about 70% of those placed in 2015 and 2016 have remained in employment.
B21. Besides CSP, we also raised the salary support caps of PCPs.
B22. PCP placements in 2017 (~3,700) were almost three times that in 2016 (~1,300).
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i. In particular, the proportion of mature PMETs, especially those who are 50 years old and above, has more than doubled.
ii. Similarly, the proportion placed in mid- level jobs paying $4,000 or more has also doubled.
B23. Associate Professor Randolph Tan highlighted the importance of ensuring that our Adapt and Grow efforts are cost effective.
B24. We agree.
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B25. Our support must also be tilted to those who face greater challenges, such as older workers and the long-term unemployed. B26. We work closely with sector agencies and training providers to review our programmes to ensure effectiveness.
B27. Ms Thanaletchimi would be happy to know that overall drop-out rates for PCPs are low - more than 9 in 10 participants complete the programme.
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B28. Even in the healthcare sector which has a longer training period for PCPs, almost 9 in 10 have successfully completed the programme.
B29. For the minority who drop out, most have personal reasons, or find it challenging to adapt. B30. We have worked with MOH to reduce the duration of some PCPs, such as nursing, without compromising the quality of training.
B31. More importantly, we need to strike a balance
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i. Between stringent criteria and processes to screen individuals, ii. And giving jobseekers sufficient opportunities to start new careers.
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Example 2 (Mature, LTU, PCP)
B32. One person who has started a new career is Mr Soon Sie Chye (44 years old).
B33. After graduating with a degree in Electronic and Electrical Engineering (from Loughborough University), Sie Chye spent the early part of his career working as an engineer.
B34. More than 10 years ago, he made a career switch to join the banking sector,
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B35. Where he had a fruitful career, leading back office teams in different banks.
B36. However, he always had a lifelong dream to set up his own business.
B37. In 2014, he took the plunge, but in less than two years the venture failed, and he became unemployed for more than a year.
B38. It was a challenging and stressful period as he just had a newborn.
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B39. During this period, the family had to depend on wife’s income and their savings, while he soldiered on in his job search.
B40. Sie Chye came across South Island Aquarium, a company specialising in imports and exports of aquatic plants and ornamental fishes.
B41. Although he had to take a paycut, Sie Chye was keen on the role as he felt the company had good potential and was excited by its expansion plans.
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B42. Company was also keen to tap on his MNC and management experience.
B43. To better prepare for his role as a Business Manager:
i. Sie Chye was enrolled in the PCP for International Trading Executives, ii. One-year programme to bridge skills gaps in supply chain, trade finance and e-Commerce.
B44. He is now five months into the PCP.
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B45. Mr Low Thia Kiang asked about the long term unemployment situation.
B46. In fact, Sie Chye is one of the more than 6,600 individuals previously unemployed for at least six months (LTU) who found a job through the Adapt and Grow initiative.
B47. This is a 25% increase in the number of LTUs placed compared to 2016.
B48. They account for close to 50% of unemployed jobseekers placed through Adapt and Grow.
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B49. Realistically, not all of the LTU jobseekers will succeed in the new jobs that we help match them to.
B50. But if we are not prepared to take some risk, through support programmes, to help them get on their feet, we risk the pool of LTU growing bigger and their families falling deeper into difficulties.
B51. Today, with a growing economy and these programmes in place, the long term unemployment rate for local PMETs has improved from 0.9% in 2016 to 0.7% in 2017.
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B52. However, compared to a few years ago, the LTU rate remains slightly elevated. This is why we believe there’s still much to do.
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Example 3 (mature, at-risk)
B53. Besides helping those already unemployed like Sie Chye, we are also supporting those at risk of displacement. One such example is Mr Vincent See (51 years old).
B54. Vincent had spent majority of his career performing IT support in the hospitality sector.
B55. However, when he saw his company restructuring to cut costs, he thought he should make plans.
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B56. Although worried that he could not adapt at his age, Vincent also saw an opportunity to learn something new.
B57. Given the strong growth of E-Commerce, he saw logistics as a growth sector, and signed up for the Attach-and-Train (AnT) programme for Logistics Executives.
B58. Unlike the usual PCPs, the AnT does not guarantee a job at the start. This is because some sectors or employers are growing but are not yet ready to hire more.
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B59. But rather than to wait, the programme helps jobseekers like Vincent build up their CV to be ready for a new career when the opportunities come.
B60. Vincent is currently 6 months into the AnT programme with ST Logistics.
B61. The company has been suitably impressed and is also ready to hire. Although Vincent’s training attachment will only end this June, ST Logistics has already offered him employment.
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B62. Vincent is one of 13,000 mature jobseekers helped through Adapt and Grow in 2017.
B63. He is also a very good example of how the Government can help a mature worker who has taken proactive steps and overcome his fears, to find a new career in a growth sector.
B64. These mature workers account for about half of all placements under Adapt and Grow.
B65. About half of them, like Vincent, are 50 years old and above. 36
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Update on five growth sectors
B66. We now have over 100 PCPs in more than 30 sectors - helping both displaced PMETs as well as those like Vincent who are at risk of displacement.
B67. Last year, MOM announced stepped-up efforts to place local PMETs in five growth sectors with good potential for PMET jobs, namely:
i. Infocomm and Media
ii. Professional Services
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iii. Finance and Insurance iv. Wholesale Trade
v. Healthcare
B68. We have generated positive momentum.
B69. Placements in these five sectors accounted for ~50% of all PMET mismatch placements in the second half of 2017.
B70. About 50% were mature local PMETs.
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B71. Through this effort, we have gained new insights into how we can support the manpower needs of companies that are growing and transforming. B72. The key is to engage the companies early, before they have firmed up their plans.
B73. By doing so, it is more likely that their existing employees can be a part of the company’s future, instead of being just part of the past.
B74. Our model of PCPs will therefore evolve.
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B75. We no longer wait till workers are unemployed/retrenched to reach out to them.
B76. Instead, we work with companies ahead of time to put in place re-deployment PCPs such as in Consumer Banking, where existing staff are re-trained and re-deployed.
B77. As the bank transforms its frontline services, hundreds of bank tellers and cashiers are adapting to do digital marketing, data analysis and product development.
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B78. These staff can avoid painful retrenchment, and at the same time help their employers meet their new manpower needs.
B79. In 2018, we expect more placements to come from such re-deployment PCPs.
Update on measures for RnF workers
B80. Our Adapt and Grow efforts are not only targeted at PMETs.
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B81. A sizeable proportion (~10,800 or ~40%) placed under Adapt and Grow are Rank-and-File (RnF) workers.
B82. Similar to PCPs for PMETs, we also have Place and Train (PnT) programmes for RnF workers to re-skill to take on new roles. B83. More than 2,000 workers were placed under such programmes in 2017, representing a more than 50% increase from 2016.
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B84. We have also piloted the Work Trial scheme in 2016. This scheme is targeted at jobseekers who are job-ready, but are not sure about the jobs.
B85. It could also be that the jobseeker and prospective employers are unsure about each other.
B86. Through Work Trial, they have up to three months to assess each other, with Government bearing the cost. B87. In 2017, the number of jobseekers placed through Work Trial has increased five times, from about 100 to 500.
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Example 4 (Work Trial)
B88. One of them is Mr Muhammad Sahfari (31 years old).
B89. Sahfari left his previous job as a sales manager in an IT solutions company as he felt the environment did not suit him.
B90. However, he was still keen on a sales position as he enjoys interacting with people. B91. He found out that Crosstrack was hiring a sales manager.
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B92. This is a start-up which provides an online marketplace to allow customers to source for the most suitable courier for their delivery jobs.
B93. Unlike his previous sales jobs which were focused on direct sales, Crosstrack’s requirement of a sales manager:
i. Includes operations management,
ii. And liaising with delivery drivers.
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B94. Sahfari was therefore apprehensive. Could he could cope with the additional workload, and does a tech start-up offer sufficient job security?
B95. Therefore, he decided to sign up for Work Trial, before committing on a permanent basis.
B96. Through the Work Trial, Sahfari had the opportunity to try out a new job in an unfamiliar environment (start-up).
B97. Not only did he enjoy the dynamic nature of a start-up, he also picked up new IT skills. 47
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B98. Crosstrack saw that he had the right aptitude and attitude, and employed him on a permanent basis when the Work Trial ended.
Enhancements to Adapt and Grow
B99. So far, the Adapt and Grow initiative has been able to provide the appropriate interventions for jobseekers at different stages – as highlighted by Mr Patrick Tay.
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B100. However, we are always looking for better ways to scale up, enhance existing programmes, or introduce new ones which will help job seekers. B101. This year, we will make three enhancements to Adapt and Grow.
B102. First, we will introduce three new AnT PCPs by 2Q this year in areas where we expect manpower demand to increase, namely:
i. AI Game Programmers
ii. Robotics Engineers; and
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iii. Food Production Specialists
B103. Second, we will also do more for our RnF workers, a suggestion raised by
Associate Professor Faishal Ibrahim. B104. In particular, to further encourage employers to hire LTU RnF workers i. We will raise the salary support for such workers under the Place-and- Train programme,
ii. From 70% to 90% of monthly salary,
iii. We will also increase the maximum monthly pay-out to employers from $2,000 to $3,000. 50
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B105. Third, there is scope to enhance the upward mobility of lower to middle income workers.
B106. By helping them take up better jobs. B107. Part of this is done through efforts under the LED Scheme efforts to uplift and transform jobs. But the other part is helping workers to access such jobs.
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B108. The Work Trial has proven useful in plugging information gaps. Without Work Trial, Sahfari would likely have missed out on a good career opportunity in a growth sector, and Crosstrack would have missed out on a good hire.
B109. Therefore, we will expand the current scope of Work Trial:
i. To provide workers with more opportunities to try out better jobs,
ii. And help companies which need more manpower to assess jobseekers.
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iii. A point which was raised by Mr Chong Kee Hiong.
B110. We will call the enhanced programme Career Trial.
B111. Under the Career Trial, we will:
i. Double the maximum training allowance
ii. From $1,200 per month to $2,400 per month.
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iii. Further, the salary support to employers and the Additional Retention Incentive, will be available for all jobseekers who are unemployed for 6 months or more, instead of only for those unemployed for 12 months or more previously. iv. We will also increase the maximum salary support to employers, from $3,600 to $5,400 per jobseeker over a six-month period.
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Summary for A&G segment
B112. Mr Chairman, the Adapt and Grow initiative is a viable way to help Singaporeans have better employment outcomes even as our economy restructures.
B113. We will continue to improve on the scheme designs and intensify our outreach to enable more Singaporeans to be matched to good jobs and careers.
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B114. Please allow me to wrap up this section
in Mandarin. 应变与提升计划在过去几
年取得了显著的成果.
B115. 通过应变与提升计划，我们去年帮助了
两万五千多个国人成功求职, 比前年增加
百分之二十。特别是年长的或长期失业
的工友，还有白领人士，人数都增加了
许多。
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B116. 我们将维持目前所取得的进展势头，并
通过各项计划, 近一步加强支持力度和扩
大涵盖面, 确保国人即使需要转换职业跑
道，也能胜任新工作，顺应新时代。
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Self-employed persons
C1. 主席，人力部除了帮助国人取得良好的
就业结果，去年也成立了劳资政工作小
组, 深入探讨自雇人士所面对的各种挑战。
C2. 工作小组上个月提出了一系列有用的建
议，政府已经已经决定接受，并且会和
劳资政伙伴在未来的两年里陆续落实这
些建议：
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i. 第一, 针对自雇人士和买家之间的合约,
推出新的劳资政标准;
ii. 第二, 让劳资政纠纷调解联盟协助调解
自雇人士和买家之间的纠纷;
iii. 第三, 配合有意的自雇人士协会制定技
能提升框架, 确保自雇人士的技能与时
俱进;
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iv. 第四, 推出新的保险产品来缓解自雇人
士因持续的伤势或病情面对失去收
入，”手停口停”的困境;
v. 第五, 针对工伤风险较高的职业, 研究推
广以上保险的方案;
vi. 第六, 政府将通过试点, 领先实行“边赚
边缴”模式协助填补自雇人士保健储
蓄户头, 以及研究如何促成其他买家也
实行这个模式; 60
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C3. 我将会以英语详细说明个个建议的实施
时间表。
C4. For the last decade, self-employed persons 1 or SEPs have constituted 8- 10% of our resident workforce.
C5. At the COS debate last year, Minister Lim Swee Say highlighted the possible increase in the number of SEPs given the emergence of the gig economy.
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i. This was the impetus for setting up a tripartite workgroup to look into the concerns of SEPs.
C6. Before I give the Government’s response to the tripartite workgroup’s recommendations, let me first provide an update of the SEP landscape, which will also address questions and concerns raised by Mr Thomas Chua, Ms Jessica Tan and Mr Kok Heng Leun.
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C7. From our most recent survey in 2017, the number of residents who took up self- employed work for at least 6 months in 2017 has grown to 223,500 – about 10% more than the year before. This growth took place at the same time as regular employment among residents, which also went up.
i. All the increase in the number of SEPs came from those who did self- employed work as their main jobs, rather than as secondary sources of income.
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ii. Such SEPs are referred to as “primary SEPs” because they depend on self- employment primarily for their livelihoods.
iii. Primary SEPs are also the group we are most interested in. C8. Primary SEPs now constitute 8.4% of our resident workforce, well within the range of 8-10% observed over the last decade.
C9. What do we know about the age and education profiles of Primary SEPs，and have they changed in 2017?
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i. By age, more than half of the Primary SEPs are 50 and above; less than 10% are below 30. The age distribution in 2017 remains largely the same as 2016. ii. However, the share of Primary SEPs with tertiary qualifications rose from 37% to 40%, in tandem with the rise in education profile among the local workforce. But it is still much less than the 55% tertiary-educated in our local workforce.
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C10. The most recent survey also showed a notable increase in the number of Primary SEPs who said they preferred regular employment over self- employment.
i. This group rose from 19% in 2016 to 23% in 2017.
C11. In other words, about one in five Primary SEPs prefer to be in a regular job. However, they tend to be older and have lower educational qualifications.
C12. We are very keen to help them. Mr Ang Hin Kee asked how. 66
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i. The first is to improve SEPs’ awareness of job matching schemes available and encourage them to come to the career centres run by WSG and NTUC-e2i.
ii. Our existing schemes as well as the new Career Trial scheme that I spoke about can also help.
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iii. But these efforts will need such SEPs to become active jobseekers. At present, more than 80% of them say they have not been looking for a regular job, even though they prefer it over self-employment.
C13. For the vast majority of SEPs who continue to prefer self-employment as a career, we should also address their concerns and provide them with support.
TWG Report – Challenges and Recommendations
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C14. To recap, the Tripartite Workgroup or TWG noted in its report that although the SEPs were very diverse, there were four common challenges they faced:
i. Payment-related disputes
ii. Loss of income due to prolonged illness or injury
iii. Lack of CPF savings for healthcare and retirement
iv. Lack of occupation-specific competency frameworks
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C15. Mr Thomas Chua, Ms Jessica Tan and Mr Ang Hin Kee asked about MOM’s response. We are grateful to the TWG members who include Mr Ang, for your well-considered and balanced recommendations.
C16. The Government accepts all seven recommendations and will find ways to fully implement them. Let me share our plans.
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Payment-related disputes
C17. First, payment-related disputes.
C18. Some observers have suggested mandating written contracts for all SEPs to minimise payment disputes. The TWG considered this, but find it impractical. This is because
i. Buyers’ of SEPs’ services include micro-SMEs and even individual households such as for private home tuition.
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ii. Some purchases are of very small value
C19. Instead, today we formally launch the Tripartite Standard on Contracting with SEPs.
i. This was developed with tripartite partners in line with the TWG’s recommendations.
ii. It is an agreed benchmark which SEPs should encourage buyers to adopt.
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iii. SEPs will be able to identify and contract with progressive service buyers who adopt the Standard.
iv. Buyers who adopt the Standard need to discuss and agree clearly with the SEPs terms of engagement such as the range of services to be delivered, project timelines and milestones, payment schedules. These will be set out in writing.
C20. The Standard is a good start to make clear the working arrangements between businesses and SEPs.
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C21. Over time, the Standard will help shape contracting norms and entrench best practices.
C22. But even with written agreements, disputes could potentially still arise.
C23. For SEPs with sector agencies, we encourage them to continue to approach their sector agencies.
i. These agencies would be in a better position to help resolve disputes.
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ii. For instance, LTA facilitates mediation of disputes between taxi operators and taxi drivers.
iii. LTA is best suited for this role because apart from being familiar with issues in the industry, it has convening power as the regulator of both taxi operators and taxi drivers.
C24. For other SEPs, from September last year, TADM started piloting voluntary mediation when they have payment disputes with businesses.
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i. With immediate effect, TADM will extend voluntary mediation services to all SEPs who have payment disputes with businesses.
Mitigate loss of income due to prolonged injury or illness
C25. Additionally, the TWG recommended that a prolonged medical leave (PML) insurance product be developed to mitigate the SEPs’ loss of income during prolonged injury or illness.
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C26. Today, some SEPs buy additional riders on top of their private insurance plans to provide for this.
C27. However, there is a lack of an affordable standalone PML product today. This means SEPs have no alternative if they do not wish to buy the main insurance product.
C28. Observers and SEPs have also asked if service buyers should be made to buy insurance for SEPs, just as businesses buy work injury insurance for their employees: 77
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i. However, unlike a regular employee, most SEPs contract with multiple service buyers.
ii. It will not be possible to determine precisely how much coverage each service buyer should provide for the SEP.
C29. We will therefore take a practical approach of making the insurance product available for SEPs to purchase for their own protection.
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C30. I am encouraged that NTUC Income is keen to develop a PML insurance product that will fulfil the TWG’s recommendations.
C31. Other insurance companies may also step forward to offer such insurance.
C32. We want to encourage widespread adoption of insurance by SEPs in some higher-risk occupations, as they are most in need of such protection.
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C33. Making insurance coverage the norm for SEPs in these occupations would make clear to the buyers of their services that the insurance costs would be priced into their fees.
C34. As a start, we have identified two occupational groups to promote PML insurance coverage.
C35. The first group is sports coaches and instructors. Collectively, MOE schools are major buyers of their services.
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C36. MOE has agreed in-principle to help shape a new norm by contracting only with self-employed coaches and instructors who have such PML insurance coverage. SEP coaches and instructors may then price the cost of PML insurance coverage into their bids for work or projects.
C37. Another occupational group which will benefit from PML insurance are taxi and private hire car drivers.
C38. The individual buyers of their services are really the commuters, and there are many.
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C39. But there are significant intermediaries like the taxi operators and matching platforms like Grab and Uber.
C40. MOM and LTA will study how to ensure that active taxi and private hire car drivers also have PML insurance coverage, together with these intermediaries, the National Taxi Association (NTA) and the National Private Hire Vehicles Association (NPHVA).
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C41. Together, sport coaches, taxi and private hire car drivers comprise about 30% of all SEPs.
C42. MOM will work closely with MOE and LTA on the way forward to promote PML insurance coverage as a norm, starting with these two occupational groups.
C43. The aim is to have a viable plan and for a PML insurance product to be available in 2019.
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Adequate savings for retirement and healthcare
C44. The Government also accepts the TWG’s recommendation to help SEPs save more regularly for their healthcare and retirement needs through a “contribute-as-you-earn” (CAYE) model.
C45. CPF is the cornerstone of our social security system.
i. CPF schemes are not limited to regular employees.
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ii. SEPs can also make use of CPF to save for their healthcare and retirement needs.
C46. Currently, SEPs are already required to contribute to their Medisave on an annual basis.
i. They can additionally make voluntary CPF contributions to build up their retirement savings.
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C47. Even though Medisave contributions are mandatory today, about one in four SEPs have not been keeping up with their Medisave contributions. Why?
i. SEPs are given up to 12 months from the time income is assessed to make their Medisave contributions.
ii. However, a key challenge is not setting aside enough cash on a regular basis.
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iii. When the time comes, they find it difficult to make the lump-sum contribution to their Medisave accounts.
C48. Without sufficient Medisave contributions, these SEPs may not be able to pay for out-of-pocket healthcare expenses or keep up with their Medishield Life premiums. They will face a longer-term risk of not being able to pay for their healthcare in old age.
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C49. It will be easier to make smaller but more regular contributions as they receive earnings.
C50. This is why the Government agrees to study how to implement the TWG’s recommendation for a “contribute-as- you-earn” (CAYE) model for SEPs’ Medisave contributions.
i. This means that a Medisave contribution is required as and when a service fee is earned. Similar to employees today who pay CPF when they receive their monthly salaries.
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ii. The service buyer or intermediary who contracts with the SEP will deduct and transmit the Medisave contribution to the SEP’s Medisave account whenever they pay the SEP. iii. There is no change to the SEP’s obligation to make the Medisave contribution.
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iv. For the time being, neither will we require SEPs to contribute to their Special Account to build up their retirement savings. While important, this matter should be reviewed only after we have addressed the problem of SEPs defaulting on their Medisave contributions.
C51. Intermediaries who work with SEPs such as Grab and Caregiver Asia have indicated their support for CAYE.
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C52. But CAYE will not be straightforward to roll out. We will have to work through issues, such as the correct amount of Medisave contributions to deduct in each transaction.
C53. The Government, as a service buyer, will take the lead to implement CAYE.
C54. Government Procurement Entities aim to start a pilot by 2020 which will allow us to work through the implementation issues for CAYE and help smoothen its subsequent implementation in the private sector. 91
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C55. We will provide more details when ready.
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Occupation-specific competency framework
C56. The final recommendation by TWG is for tripartite partners to support SEP associations in developing occupation- specific competency frameworks.
C57. Our tripartite partners are committed to doing so.
C58. To date, 15 of the 23 priority sectors have launched Skills Frameworks that support the sector’s industry transformation.
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i. These Skills Frameworks provide key information on sector, career pathways, occupations/job roles, and the skills required for these occupations/job roles. ii. They also list the training programmes that individuals or employers can tap. The information in these Skills Frameworks will be relevant to both employees and SEPs in those sectors.
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C59. The Freelancers & Self-Employed Unit in the Labour Movement is also working with many groups, such as the sport coaches to develop a training and accreditation scheme.
C60. There are SEP associations that have proactively helped their SEPs to learn new skills.
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C61. For example, the National Taxi Association (NTA) saw that foundational digital skills – as well as familiarity with digital applications such as Parking.sg and mobile payment apps – would benefit its members in their day-to-day work.
C62. They also knew the course schedule had to cater to taxi drivers’ unique work schedules.
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i. NTA worked closely with one of SSG’s appointed training providers and SSG to customise the SkillsFuture for Digital Workplace programme for NTA members. SSG also provides course fee subsidies for the programme to keep costs affordable for the drivers.
C63. SEP associations can strengthen support to help their members make their SEP careers more sustainable.
C64. The Government and the tripartite partners are keen to work with more SEP associations on this front.
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Summary for SEP module
C65. Let me summarise the Government’s response to the TWG’s seven recommendations.
C66. Three recommendations are being implemented from today or have been ongoing. They are:
i. The Tripartite Standard on Contracting with SEPs which we just launched.
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ii. The extension of voluntary mediation services by the Tripartite Alliance for Dispute Management to cover SEPs. iii. The support of the tripartite partners for SEP associations to develop occupation-specific competency framework so that SEPs can remain relevant.
C67. Another three recommendations will be implemented in 2019 or 2020. They are
i. To make available a prolonged medical leave insurance (PML) product.
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ii. To promote PML insurance coverage as a norm, starting with two occupational groups - sports coaches and instructors, as well as taxi and private hire care drivers. iii. To start a pilot programme where Government as a service buyer will implement Contribute-As-You-Earn for the Medisave obligations of its self- employed contractors.
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C68. The recommendation to introduce CAYE for other service buyers will require further study. The government will focus on selected occupations where there are significant intermediaries or where there are large corporate service buyers we can work with.
Progress of women in employment (965 words)
D1. As we look to support SEPs better, we are also committed to making our workplaces progressive for all, including for our women.
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D2. Our female employment rate has improved steadily.
i. Over the last three years, it averaged 72%2, higher than the 69% average in the previous 3 years. ii. In terms of full-time employment rate, we are ranked 6th compared to 35 OECD countries3.
Workplace harassment
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D3. With more women in the workforce, has workplace harassment become a bigger problem?
D4. I would like to assure Mr Louis Ng, Ms Thanaletchimi and Mr Dennis Tan that the Government monitors the situation carefully.
D5. Together with the tripartite partners, we have taken a multi-pronged approach towards protecting people against workplace harassment.
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i. In 2014, the Protection from Harassment Act (POHA) was introduced. ii. Employees who experience workplace harassment should seek help promptly, including for attacks on employees in cyberspace, as raised by Ms Thanaletchimi.
iii. They can report such incidents to MOM or TAFEP.
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iv. They can also seek civil remedies directly through the Courts, or report serious cases to the Police.
D6. Between 2013 and 2017, an average of about 20 Police reports were filed annually involving sexual harassment or insults of modesty occurring at the workplace. They were thoroughly investigated and offenders taken to task.
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D7. Some employees prefer to resolve the matter privately without involving the authorities, but would rather report the matter to their employers. Legislating mandatory reporting by employers, as suggested by Ms Thanaletchimi, will close off this avenue for such employees and discourage them from raising the matter with anyone. This is not helpful to them.
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D8. Instead, the tripartite partners introduced the Tripartite Advisory on Managing Workplace Harassment in 2015 to remind our employers on their obligations to prevent and manage workplace harassment. They should also inform employees of the avenues where they can seek help.
Gender pay gap
D9. What about gender pay gap?
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D10. Associate Professor Daniel Goh cited a study by ValuePenguin that it “has remained at around 18 to 19 percent” from 2006 to 2016.
i. Unfortunately, the study did not make an apple-to-apple comparison as it included both full-time and part-time employed residents.
ii. More women than men worked part- time to meet their family and caregiving responsibilities and naturally earned less.
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D11. MOM’s Comprehensive Labour Force Survey allows us to look at only full-time employed residents, and compare salaries of men and women in similar occupational groups.
D12. The data shows a gender pay gap of 11.8% in 2017, a significant improvement from 20% ten years ago.
i. There was also broad-based improvement across most occupational groups4.
4 The improvement was broad-based across most occupation groups such as production craftsmen and related workers from 57% to 29%, cleaners, labourers and related workers from 23% to 7%, professionals from 24% to 17% and sales & service workers from 27% to 20%. 109
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D13. The remaining pay gap can be attributed to the fact that women are more likely to exit the workforce for reasons such as childcare.
i. If and when they return to the workforce, they also have to catch up with their male counterparts.
Retirement adequacy for women
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D14. The same reason probably explains why more men than women achieve retirement adequacy.
i. In 2017, 66% of active male members and 53% of active female members turning 55 met their Basic Retirement Sum (BRS).
D15. Mr Chong Kee Hiong will be pleased to know that the gap is closing.
i. In 2007, median retirement savings for women at age 55 were about 60% of median balances at age 55 for men. 111
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ii. By 2017, this ratio has improved to 74%.
iii. We expect this gap to further narrow over time.
Progressive and inclusive workplaces for families – Work-Life Grant
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D16. To address Associate Professor Daniel Goh’s concern about the gender difference in CPF LIFE pay- out, the best way is to enable women to remain in the workforce, so they continue to advance in their careers and build up retirement savings.
D17. This was the key thrust of my speech last night at an event organised by the Singapore Chinese Chamber of Commerce and Industry to celebrate International Women’s Day.
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D18. Mr Desmond Choo and Ms Thanaletchimi will be pleased that during the event, I also announced that the Government will set aside about $30 million to further promote Flexible Work Arrangements.
D19. We will do so through the enhanced WorkPro Work-Life Grant, which will provide higher grant support to employers, especially for putting in place Job-sharing.
D20. This enhancement comes on top of:
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i. The Tripartite Standard on FWA launched last year which now covers some 250,000 employees;
ii. The Tripartite Standard on Unpaid Leave for Unexpected Care Needs which I launched 4 days ago, at PMO’s COS; and iii. The very significant expansion of preschool places which the Government is fully committed to.
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D21. These measures will help the current and future cohorts of younger women remain in the workforce and improve their retirement adequacy.
D22. For the older cohorts of women who still did not manage to save enough for retirement, we have introduced a number of measures to help.
D23. In 2016, we made it easier for members to transfer CPF savings to their spouses’ account by lowering the minimum threshold they must meet, from the FRS to the BRS. 116
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D24. From October 2018, we will also make it easier for children to transfer CPF savings to their parents and grandparents. I will say more about this later.
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Conclusion
D25. Overall, with our tripartite efforts, we have made progress in helping Singapore women to better manage their family responsibilities, and work aspirations.
D26. There is more to be done, and we will continue to strengthen our efforts.
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Retirement Adequacy
Introduction
E1. Beyond helping our workers gain access to good jobs and have good employment outcomes, we also want to help them
i. Improve retirement adequacy,
ii. So that they can have peace of mind in old age.
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E2. Our CPF system serves Singaporeans well in supporting our three basic needs, namely housing, healthcare and retirement.
Improving retirement adequacy
E3. Today, 6 in 10 active CPF members turning age 55 have at least the Basic Retirement Sum (BRS) in their Retirement Accounts (RA)
i. By 2020, we expect this proportion to increase to 70% and even more over time.
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E4. To help CPF members save more for their retirement, we stepped up efforts to encourage members to top-up their own or their loved ones’ CPF accounts.
E5. In 2017
i. Over 61,000 members received about $1bn in cash top-ups to their Special or Retirement Accounts.
ii. In addition, over 35,000 members received about $1bn in CPF transfers.5
5 In 2016, 49,200 members (+25% in 2017) received about $860m (+21% in 2017) in cash top-up and 31,900 members (+12% in 2017) received $970m (+6% in 2017) in CPF transfers to their SA/RA 121
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iii. 40% of these members who received cash tops, CPF transfers or both, had less than BRS; these top-ups and transfers were thus very useful.
E6. We have also enhanced the Workfare Income Supplement and introduced Silver Support to provide additional retirement support to lower income Singaporeans.
i. Today, about 152,000 seniors qualify for Silver Support. They constitute about 30% of the population of seniors aged 65 and above. 122
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ii. We use a broad set of criteria – to assess every senior’s eligibility for Silver Support.
E7. Associate Professor Daniel Goh asked if the payouts can be the same, regardless of flat type.
i. In many Government support schemes, we target assistance to those who will likely need it most. Housing type is not a perfect proxy, but an uncomplicated way to direct the support.
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ii. Singaporeans with exceptional circumstances can appeal to be eligible for Silver Support or to receive higher payouts. The appeals will be seriously considered. Enhancements to CPF Investment Scheme
E8. Mr Zainal Sapari expressed concerns that some CPF members who invest through the CPF Investment Scheme (CPFIS) might not fully understand the risks and costs involved.
E9. Currently, there are two ways for members to grow their CPF savings.
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i. For those who have no appetite for risk, they can earn risk-free interest on their CPF savings.
ii. Those who have an appetite for risk may choose to invest their monies through CPFIS.
E10. However, a member who is willing to take risk
i. May not have the knowledge to invest.
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ii. Based on a poll commissioned on behalf of the CPF Advisory Panel in 2015, more than half of CPFIS investors considered themselves to have “limited” investment knowledge.
E11. CPF members should exercise caution when investing their CPF savings
i. Over a two-year period between Oct 2014 and Sept 2016
ii. 29% of members who invested their Ordinary Account (OA) savings made cumulative total losses. 126
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iii. Another 22% achieved cumulative profit that is less than or equal to the OA interest rate of 2.5% per annum.
iv. In other words, slightly more than half of the members with a CPFIS-OA account did not do better through their own investments than if they simply left their CPF balances alone to earn a risk- free interest rate.
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E12. We have been studying the feasibility of a third option for this group of members called the Lifetime Retirement Investment Scheme (LRIS)
i. This new scheme is targeted at CPF members who have an appetite for risk but neither the knowledge nor time to invest.
ii. We are aiming for something low-cost
iii. We want to take advantage of the longer time horizon available to CPF members for better upside investment gains. 128
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iv. Yet, the product should also provide some assurance against downside risks. v. Such a scheme is not easy to design and will require further study.
vi. In the meantime, we will make three enhancements to better cater CPFIS to members with an appetite for risk, and have both the knowledge and time to invest.
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E13. First, we will introduce a Self- Awareness Questionnaire (SAQ) that will be available for all CPF members.
E14. The questionnaire will provide feedback to the member
i. On his level of basic financial knowledge
ii. And remind him of different options to grow CPF savings, such as CPF interest rates or the upcoming LRIS.
E15. But regardless of the feedback
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i. Members can still decide whether to invest in CPFIS.
E16. The questionnaire will be part of the process of opening a CPFIS account from 1 October this year.
i. Members who already have a CPFIS account are not required to take the questionnaire but strongly encouraged to do so. E17. The second enhancement is to disallow sales charge for products that are offered under CPFIS.
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i. Currently, financial advisors can receive a sales charge of up to 3% of the transacted amount when members use their CPF to purchase Unit Trusts and Investment-Linked Insurance Policies.
E18. This sales charge has an unintended consequence that is detrimental to CPF members
i. It encourages financial advisors to sell products to earn more commissions which causes members to “churn” their investments.
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ii. Our target group for CPFIS will generally not need to rely heavily on financial advisors to decide which investment product to purchase.
iii. They can already directly buy unit trusts on online platforms for zero sales charge.
iv. Therefore, the sales charge adds another layer of cost that reduces the member’s investment returns.
E19. By removing sales charge
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i. Financial advisors no longer have an incentive to push products. ii. This also reduces the cost of investing for CPFIS members iii. And will better align the investment behaviour to members who have time and knowledge.
i. The third enhancement is to reduce the maximum wrap fees charged for CPFIS investments such that wrap fees cover only the cost to maintain wrap accounts.
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E20. Currently, some members set up a wrap account on investment platforms.
i. Financial advisors can charge an annual wrap fee of up to 1% of the amount of funds that they manage in the wrap accounts.
ii. The wrap fee covers advisory services and the costs to maintain the wrap account. E21. We are not opposed to wrap accounts as they are generally considered to bring convenience to investors.
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E22. Again, the targeted members for CPFIS are not expected to rely on advisory services that are usually included in the wrap fees.
E23. We will therefore lower the cap on annual wrap fees to 0.4% of the total amount managed.
i. This is similar to the fees charged by online investment platforms in the cash market. E24. We are mindful that these enhancements may affect the financial advisory industry.
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i. However, we do not expect this impact to be too substantial. ii. Currently, the Life Insurance Association estimates that about 15% of premiums from new insurance business came from CPFIS products while the remaining 85% of premiums came from the cash market6.
E25. Nonetheless, to give the industry adequate time to adjust, we will implement these fee changes in two steps:
6 Source: Life Insurance Association’s industry report for January to September 2017 (www.lia.org.sg/node154324).
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i. The cap on sales charges will be reduced to 1.5% from 1 Oct 2018 and further reduced to 0% from 1 Oct 2019. ii. The cap on wrap fees for both existing and new accounts will be reduced from 1% to 0.7% from 1 Oct 2018 and further reduced to 0.4% from 1 Oct 2019.
E26. 主席, 我们将调整公积金投资计划, 近一
步保障公积金会员的利益。
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i. 公积金会员可以通过自行评估, 更清楚
了解, 要为存款赚取最好的回报, 应该选
择哪一种方式才比较合适。
ii. 时间不足或对投资理财不熟悉的会员,
把公积金存款留在户口里赚取无风险利
息或许是最理想的做法.
iii. 即有时间又有投资理财知识的会员, 以
后须付的几项费用也将减少.
Conclusion
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E27. Mr Chairman, let me conclude.
E28. We are taking active steps to help Singaporeans move into better jobs and secure better employment outcomes, even as the economy restructures.
E29. The women in our workforce have made progress and will get more help to stay in employment.
E30. Our self-employed persons and CPF members will also enjoy better protection.
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E31. MOM will continue to improve our schemes and programmes to ensure that we have an inclusive workforce and progressive workplaces.
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