Celebrating greater longevity with CPF Life is
the aim of changes to the CPF Act passed by Parliament on Monday to
ensure members have an income for the rest of their lives.
But several MPs expressed concern over those who have less than
S$40,000 in accounts to fully benefit from the scheme.
It started with 12 different plans for CPF Life and now it's down
to just four - Life Plus Plan, Life Basic Plan, Life Income Plan
and Life Balanced Plan.
Members with at least S$40,000 in their Retirement Account will be
automatically included, while those with lower cash balances can
opt-in.
LIFE Plus Plan offers higher
monthly income but leaves behind less for
beneficiaries.
For the LIFE Basic Plan,
members accept a lower monthly income for higher bequest
amount.
The LIFE Income Plan offers the highest monthly income but members
would leave nothing behind when they pass away.
The default plan is the LIFE
Balanced Plan which will provide a balance between a level of
retirement income and some bequest amount if they pass away
early.
Manpower Minister Gan Kim Yong, said: "Over the years our CPF
policies have evolved to better address our changing needs and they
will continue to evolve.
CPF Life is our unique response to address the challenges of
our ageing population and it marks an important milestone in the
evolution of the CPF."
This was a major concern for trade unionist Halimah Yacob as the
number of Singaporeans working part time or on contract work has
increased.
She said: "Our low-wage
workers are the ones who need such a scheme the most as they are
not likely to have discretionary savings or other assets. I would
like to ask the Minister to study this issue carefully, so that we
can have a truly inclusive CPF Life
scheme."
In her maiden speech in Parliament, Nominated MP Pauline Straughan,
suggested programmes for the vulnerable poor.
She said: "As we move towards a more comprehensive coverage for
Singaporeans, it is even more critical for us to ensure that no
group is omitted from the lifelong income fund. If we failed to do
so, we may inadvertently entrench social inequality."
The CPF Board estimates that at least 70 per cent of members
turning 55-years- old in 2013, will have at least S$40,000 in their
retirement accounts.
Mr Gan said: "There is no minimum balance required to participate
in CPF Life. All members, regardless of their CPF balances, can
opt-in into the scheme.
“However, members with a very low balance may not be in a position
to maximise the benefits from CPF Life."
For them, schemes like Workfare will come in handy where older,
low-wage workers receive an income supplement, of which a portion
is credited into the recipient's CPF to shore up his retirement
savings.
Changes to the CPF Act also address the issue of members who are
mentally incapacitated.
Currently, under the Mental Capacity Act, a court ruling cannot
affect a CPF nomination.
So, rules dealing with nominations will also be amended to allow
the courts to do this, in the best interest of the member. -
CNA/vm
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