THE Central Provident Fund is an important tool to help citizens accumulate sufficient retirement funds during their active working years.

To this end, employees and their employers make monthly contributions to the Ordinary, Special and Medisave accounts.

A self-employed person, however, is required to make contributions to only his Medisave account.

Contributions to his Ordinary and Special accounts are voluntary, which means he could have little or no money in these accounts for retirement.

To assist such people, the authorities could make it mandatory for them to contribute to the Ordinary Account as well. The contributions need not be large but they could snowball into a tidy sum for retirement, given the attractive CPF interest rate.

Another approach could be to offer tax incentives to induce companies or agencies that engage the self-employed person to contribute to his CPF, at a rate lower than that for employees.

If the self-employed person signs, say, a year's contract with the company, he could be offered a bonus at the end in the form of a CPF contribution.

Lim Lih Mei (Ms)