The state has made a final decision, and the new regulations have begun to be implemented, which concerns the interests of 170 million people
For many migrant workers, five insurances and one housing fund are undoubtedly one of the important benefits they pay attention to. During the job search process, many people expect to find a company that can provide them with this comprehensive protection. Among the five insurances and one housing fund, the housing provident fund has attracted special attention.
Housing provident fund is a welfare system that is jointly paid by enterprises and employees. Enterprises pay a certain percentage of employees' wages, and employees also need to bear a part of the costs. This system design ensures that employees can enjoy substantial benefits.
Housing provident funds are used in a wide range of ways. Among them, the most common use is to buy a home through a CPF loan and pay off the mortgage. Compared with commercial mortgages, the interest rate of housing provident fund loans is lower at only 3.25%, which provides a significant advantage for employees to buy a home. In addition, the provident fund can also be used for home decoration, serious illness medical treatment, supplementary pension and other scenarios. In exceptional circumstances, employees may even be able to withdraw their CPF for emergencies.
It is worth mentioning that neither the provident fund paid nor the income generated by it is subject to individual income tax. This makes the housing provident fund a very practical benefit, providing additional financial support for the majority of office workers.
However, as housing prices continue to rise and the situation continues to change, calls for the abolition of the provident fund have gradually increased in recent years. The provident fund system has been controversial, with some arguing that it is essentially a mechanism of "robbing the poor and helping the rich". On the one hand, those who cannot afford to buy a house cannot use the funds, resulting in idle funds, and on the other hand, the wealthy who can afford to buy a house can easily use their provident fund to enjoy low-interest loans, which is undoubtedly the "icing on the cake" treatment. It has even been suggested that CPF contributions should be paid together with monthly salaries to alleviate this inequity.
Dong Mingzhu, chairman of Gree Electric, is a staunch supporter of the abolition of the provident fund system. She firmly believes that the employees of Gree Electric do not need to rely on the provident fund system to buy real estate. In fact, she made a solemn pledge to provide each of the company's 80,000 employees with a home, a pledge that has been even stronger in the wake of the pandemic.
In Dong Mingzhu's view, the contribution ratio of the provident fund, up to 12% of the employee's salary, which greatly increases the financial burden of the enterprise, from the perspective of business management, the abolition of the provident fund system seems to have become a way to reduce the financial pressure of the enterprise, Dong Mingzhu's suggestion has been favored by many enterprises. With the addition of heavyweights such as Huang Qifan and Lou Jiwei, this topic has sparked extensive discussions in all walks of life.
However, the housing provident fund is indeed an important welfare treatment for many enterprise employees. According to the results of the online survey, the majority of employees oppose the abolition of the housing provident fund, especially those who rely on this system to buy a property, pay rent or renovate a house. The versatility of the housing provident fund, such as home loans, mortgage repayment, renting, and renovation, makes it play an indispensable role in daily life.
Of course, the issue of abolishing the provident fund system is not without its opponents. Some well-known experts, such as Peking University professors Liu Qiao and Zhang Zheng, also hold the same view. They believe that the housing provident fund is a manifestation of the welfare of enterprise employees, and its existence has a certain rationality and necessity. This benefit package is of great significance to improve the quality of life of employees and ensure their economic stability.
This is further confirmed by official figures. By the end of 2022, the number of paid-in housing provident fund units nationwide has reached 4.5272 million, and the number of paid-in employees has reached 169.7957 million. This large group relies on the housing provident fund system to secure their housing rights. Therefore, when considering whether to abolish the housing provident fund system, it is necessary to fully consider the rights and benefits of these employees to ensure that their interests are not harmed.
For example, in the face of high housing prices, many people rely on provident fund loans to buy houses, and official data shows that 86.96% of personal housing loans issued in 2019 were used to buy their first home. In addition, 10.13 million people have withdrawn their CPF to pay rent. The provident fund can also be used for the renovation of old houses, the installation of elevators, etc. This means that the CPF system has helped many people to a great extent.
In the end, whether to cancel the provident fund or not, the state has given the answer
As the public calls for the abolition of the provident fund system gradually increased, the state promptly issued a new housing provident fund policy, which responded to this hot topic with a clear and decisive attitude: the mainland will resolutely not abolish the housing provident fund system. In addition, Xinhua News Agency's publication "Banyuetan Internal Edition" recently published an article titled "Reform of the Provident Fund System Needs to Be Prudent and Avoid "One-size-fits-all"", which deeply analyzed the advantages and disadvantages of the provident fund system and put forward a number of constructive reform suggestions. The core ideas of the article focus on three key words: inclusiveness, fairness, and value preservation. These three concepts may become an important guide for the future reform of the provident fund system, and we are full of expectations for this.
Since 2023, more than 100 cities across the country have successively launched new policies for housing provident funds. Among them, more than half of the cities have raised the payment base of the housing provident fund to meet the expectations of the majority of employees. For example, Shanghai's housing provident fund contribution base has jumped from 23,517 yuan to 28,017 yuan, an increase of 4,500 yuan. For employees with a monthly income of more than 28,017 yuan, especially those enterprises with generous benefits, if employees pay 6% and enterprises pay 12%, the monthly provident fund can be as high as 5,043 yuan. Even if ordinary enterprises and employees pay 7% each, they can get a provident fund of 3,922 yuan per month.
This considerable provident fund not only means that you can enjoy lower mortgage interest rates when buying a house in the future, but also relieves a huge repayment pressure for home buyers. What's even more gratifying is that even friends who have already purchased a house through a commercial loan can also use the provident fund to repay the loan, making the flow of funds more flexible.
It is worth mentioning that the Ministry of Housing and Urban-Rural Development, the People's Bank of China and other departments are jointly formulating a new housing provident fund policy, aiming to promote the housing provident fund to purchase houses and repay loans in different places. At present, this policy has been implemented in more than 30 cities across the country, including Shenyang, Jinan, Chengdu and Chongqing, covering many key areas such as the Yangtze River Delta urban agglomeration. This is undoubtedly a huge blessing for the 170 million enterprise employees who are paying the provident fund across the country, so that their housing provident fund can play a greater value.
After years of development and popularization, the provident fund system has long been deeply rooted in the hearts of the people, proving its indispensable social value. Especially for those of us who have just needed to buy a house, the provident fund is undoubtedly a powerful boost, significantly reducing our financial burden. However, despite its overall positive effects, we cannot ignore the underlying problems.
From the perspective of ordinary citizens, how to deepen the reform of the existing provident fund system so that it can benefit a wider range of people and release greater dividends is undoubtedly an important issue that we should focus on and explore in the future. The reform is not only to solve the problem, but also to promote the continuous optimization and improvement of the system, so that the provident fund can truly become our right-hand man on the road to buying a house.
So, what do you think about the provident fund system?