Bosses in Singapore will have to pay an additional 1 percent of salary to their employees’ pension plan to raise the amount of savings available to people in their old age, Prime Minister Lee Hsien Loong said on Saturday.

He said employers face a 0.5 percentage point increase in their contribution to the Central Provident Fund (CPF) in September, with the other 0.5 percentage point rise taking effect in March 2011, according to local media reports.

Most Singaporeans are required to put aside 20% of their salary into the CPF, while employers are currently required to contribute an additional 14.5% on top of what they pay their staff.

Employers’ contribution to the CPF will rise further to 16% of salary if the economy continues to grow strongly in the next 1-2 years, Lee said at a Labour Day celebration, the Straits Times and Channel NewsAsia reported on their websites.

“When times were hard, workers made sacrifices to keep firms afloat. So in good times, it is fair to give back some to workers,” the Straits Times quoted Lee as saying.

Singapore’s economy grew by 13.1% in the first quarter from a year ago, helped by a recovery in manufacturing, and the government is projecting growth at 7-9% this year.