I SHARE the same frustrations as Mr Kumar Pillay Thangavelu ('Crossing 50: Worries of a working heartlander', Wednesday), who raised his concerns about the cut in employers - Central Provident Fund (CPF) contribution rate from the normal 14.5 to 10.5 per cent at the age of 50.

I am reaching 60 and I will receive only 5 per cent as my employer's CPF contribution, a hefty 9.5 per cent less than that for younger employees.

In Singapore, retaining older workers is a challenge for companies that must respond to an ever-changing market to stay competitive. As a 60-year-old, I understand older workers may be generally slower in their work and intimidated by new technology and rapid changes in work processes. Besides, it may also be costlier to maintain them because of likely poor health.

For these companies to stay in business, I concur with the cut in employers' CPF contribution as this improves the wage competitiveness of older employees to compensate for the productivity difference between the old and the young. This helps to make the old more employable without affecting their take-home pay.

But is it necessary to cut the employees' CPF contribution rate from 20 per cent to 18 per cent at 50, and to 7.5 per cent at 60'

As three-quarters of Singaporeans may not have sufficient savings to maintain their lifestyle when they retire at 62, it is important that employees should continue to contribute the same rate of 20 per cent so they can save more for retirement.

It is hard to save when you have money in your hands. If the higher rate of employees? CPF contribution is maintained, older employees will be able to build their retirement savings through compulsory CPF contributions. It is better that the money is in their CPF than in their hands.

Another setback for older employees is that they have to pay more income tax because lower employees' rate of CPF contribution and higher take-home pay result in higher taxable income. Why must the Government penalise this group of older employees with a double whammy when they already receive less from their employers' CPF contributions?

It is sad that this group of employees, who have contributed to nation building in the past three to four decades, are short-changed and their efforts not appropriately rewarded.

I urge labour chief Lim Swee Say to look into this matter affecting many older employees.

Seah Leong Khai

This article was first published in The Straits Times.