Managing CPF Rates

The CPF contribution rates required for CPF calculations are specified by CPF legislation and are PeopleSoft maintained. The data is accessed via the CPF AR RATES array, using formula CPF FM RATE LOOKUP, which retrieves the appropriate calculation rates (appropriate row in the array) for each employee.

To find the correct row in the CPF AR RATES array for the current employee (payee), formula CPF FM RATE LOOKUP determines the sector, the gradual CPF status, the employee's age and total wages for the month. These are determined using the following elements, as referenced in the CPF FM RATE LOOKUP formula:

• Formula CPF FM GRADUAL YR returns a value indicating whether gradual CPF rates should be applied for the payee. The formula returns the number of years in which the payee becomes the permanent resident (PR). The value is used to indicate whether gradual CPF rates should be applied for the payee. Variable CPF VR PR GRADUAL enables you to select which set of rates will be used for Permanent Residents. If set to blank, Full CPF rates will be used for PR's in the first 2 years.  If set to 'P', Full Employer CPF and Gradual Employee CPF rates will be used for the first 2 years. The formula that determines the number of years of PR (CPF FM GRADUAL YR) takes this variable into consideration. You can set/override the value of the variable on the Pay Entity, Pay Group and/or Payee Element Overrides pages.

• If the employee status is not permanent resident, the formula doesn't resolve. However, if the employee is a permanent resident, the formula finds the number of complete years, using duration CPF DR PAYEE AGE, between the first day of the month following the permanent residency date and the first of the current month (based on the month from the period end date). While CPF originally starts from the actual permanent residency date, the second and third year rates are not accessed until the beginning of the month following the anniversary.

• Duration CPF DR PAYEE AGE retrieves the correct CPF rates for a payee, their age as at the first day of the current month is needed. (From birth date to first day of current month, using the month from the period end date.

  Note:

  You can override the formula at payee level. Employees may elect to pay the full CPF from the beginning and not have gradual CPF applied. To do this, you can enter an override to this formula, by setting the value to 'F', on the Payee Supporting Element Overrides page.

Data is retrieved from the database every time the CPF AR RATES is resolved. This is useful for retrospective Pay Rate Changes as the new rates (as of the new calendar) will have to be used. For example, if there is a change in CPF rates (October 1, 2007), and there is a retrospective Pay Rate Change (effective 1 September 2007), the CPF calculation for October pay calendar must use the new rates effective 1 October 2007.