TAP contribution hike needs detailed study
BANDAR SERI BEGAWAN
DETAILED studies need to be carried out before the government will consider increasing the mandatory contribution to the Employees Trust Fund (TAP), said the second minister of finance yesterday.
Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abd Rahman Hj Ibrahim said several factors need to be examined, such as the financial capability of low-income earners to contribute a higher percentage of their monthly salary, and the rise in cost of living over the long-term.
“The government is very much aware of the importance of having sufficient retirement funds,” he said during the 12th Legislative Council (LegCo). “However a detailed study needs to be made before any comprehensive policy can be formulated,” he added. Brunei citizens must contribute five per cent of their monthly salary to TAP, and another 3.5 per cent to the Supplementary Contributory Pension (SCP). Employers and individuals can also make voluntary contributions to top up funds.
The second finance minister added that $981,618 has been collected in voluntary contributions since the elective scheme was introduced in 2010. “It is hoped that more employers will come forward to increase their contribution for the benefit of their workers,” he said. The issue of sufficient retirement funds was raised by Yang Berhormat Hj Zulkipli Hj Abd Hamid, who said a national study revealed that 49 per cent of Bruneians do not actively save, and that 25 per cent are forced into debt to cover daily expenses. Fifty per cent said they do not have a fundamental understanding of finance.
In response, YB Pehin Dato Hj Abdul Rahman said the government is trying to raise awareness of financial planning and literacy through seminars aimed at youth and recent graduates, as well as through mukim and village consultative councils.
The Brunei Times