Parliament: Remove cap on Minimum Sum for people who want bigger payouts from CPF Life, says MP
Published on Aug 5, 2014 4:47 PM
An MP wants the Government to remove the cap on what people must put aside for the Minimum Sum in their Central Provident Fund (CPF) accounts.
Ms Foo Mee Har (West Coast GRC), speaking in Parliament on Tuesday, called for this option to be offered to Singaporeans who want bigger monthly payouts from their CPF Life annuity scheme.
She said: "Given that the Government has acknowledged the current Minimum Sum only provides monthly payouts to cover basic living expenses, I would like to ask the minister why is there a need to set a cap on the sum of money that CPF members wish to set aside in CPF Life?"
Manpower Minister Tan Chuan-Jin, in his reply, said that while the CPF Life scheme is designed to help Singaporeans meet their basic needs in retirement, its priority is to provide for those at lower income levels.
In doing so, it allows the Government "to target our resources on those Singaporeans who need it most," he added.
Mr Tan also pointed out that middle- and higher-income Singaporeans, who have retirement savings in excess of the Minimum Sum, have other investment options outside the CPF system to meet their retirement needs.
Persisting, Ms Foo expressed the hope the Government would look into her suggestion.
Mr Tan noted the four-year-old CPF Life scheme is still relatively new, and that the Government will "continue to look at it and see how best to improve it".
Earlier, he told the House that CPF members who are older than 55 can put aside more than the specified Minimum Sum for their cohort.
The Minimum Sum is lower for older cohorts. For instance, those who turn 55 from July 1 last year till June 30 have to set aside $148,000, lower than the $155,000 Minimum Sum for people who turn 55 from July 1 this year till June 30 next year.
But these older workers can top up to the $155,000 Minimum Sum of the current cohort. This bigger amount would give them monthly payouts of $1,200 under the CPF Life scheme.