CPF Advisory Panel's recommendations to the Government

Two weeks after NTUC made its call to enhance the CPF system, the CPF Advisory Panel released on 4 February 2015 the first part of their CPF recommendations to the Government, addressing issues on adjustments to the Minimum Sum and Lump Sum withdrawals.

The 13-member CPF Advisory Panel mentioned in its announcement that it recognised the wide variation of retirement needs and concerns of CPF members. The panel therefore aimed to strike a balance between ensuring that the CPF provides a basic lifelong support in retirement and offers flexibility to cater to those needs.

Retirement Savings

Singapore Insurance Employees’ Union (SIEU) President Terry Lee was part of the 13-member panel.

Mr Lee said: “More should be done to help workers meet the basic retirement sum. This is why the panel has expressed support of the Government’s commitment to consider raising the CPF contribution rates for older workers aged above 50 as this will help boost their savings. The Government should also consider raising the CPF salary ceiling to keep up with wage growth.” 

In a media statement, Assistant Secretary-General (ASG) Cham Hui Fong commented that she is pleased that the panel shared NTUC's concerns on helping members build up their retirement savings.

Manpower Minister Tan Chuan-Jin has also stated in a letter to the panel that the Government has accepted part one of the panel’s recommendations.

Here are the highlights of the recommendations made by the CPF Advisory Panel that were similar to NTUC’s call:

• The option to withdraw up to 20% of their Retirement Account Savings at the Payout Eligibility Age (Draw Down Age), inclusive of the $5,000 that could be withdrawn from age 55.

• From 2017 to 2020, each cohort of members turning 55 in a calendar year should have its Basic Retirement Sum increased by 3% from the cohort in the preceding year, giving future cohorts certainty of the Basic Retirement Sum applicable. NTUC hoped that if the Government accepts this recommendation, CPF members should be given adequate advance notice to any adjustment to the Basic Retirement Sum thereafter, and also for transparency on how the adjustments are calculated.

• Allow CPF members who desire higher payouts the flexibility of topping-up their CPF life premiums with savings or cash, subject to a cap.

• The Government to provide the flexibility for members to defer their payout start age, up to 70. For every year the payout age is deferred, monthly payouts increase by 6% to 7%.

Click here to see the recommendations made by the CPF Advisory Panel. 

Source: NTUC This Week