A Central Provident Fund (CPF) annuity scheme with
increasing payouts would kick off next January, and members hoping
to switch from their existing plan to the new option would be given
a one-year window to do so, Manpower Minister Lim Swee Say said in
Parliament on Monday (March 6).
CPF Life provides Singaporeans or permanent residents
aged 65 and onwards with lifelong monthly payouts from their CPF
retirement accounts. Two existing plans — the Standard Plan and
Basic Plan — offer constant payouts. The default Standard Plan
offers higher monthly payouts and a lower bequest (sum left for
beneficiaries after death), whereas it is the opposite for the
Basic Plan.
Under the new plan recommended by the CPF advisory
panel last year, members will see payouts increase by 2 per cent
every year. However, this also means that payouts start about 20
per cent lower than those offered by the existing Standard Plan if
they take up this third option.
CPF members may also choose to delay the starting age
of their CPF Life payouts until they are 70 under this new option.
So far, around 900 members — of which 70 per cent are still working
— have opted for this deferment with the existing plans.
Giving an update on CPF enhancements that took effect
last year, Mr Lim said during the Manpower Ministry’s debate on the
Budget on Monday that around one million CPF members have benefited
from the Government raising the CPF salary ceiling (the maximum
monthly salary that is subject to CPF contributions) from S$5,000
to S$6,000, and one million members have also benefited from the
extra interest of 1 per cent on the first S$30,000 of their
savings.
Last year, the CPF advisory panel also proposed to
review the CPF Investment Scheme (CPFIS) to cater to
investment-savvy members. Mr Lim said that the changes would be
announced later this year. They include a new self-assessment tool
for members to gauge whether a high-risk scheme is suitable for
them to grow retirement savings.
todayonline