SINGAPORE - Prime Minister Lee Hsien Loong announced significant changes to the Central Provident Fund (CPF) at his annual National Day Rally on Aug 17.
CPF members will soon have the option of making lump sum withdrawals from their CPF accounts after they retire.
But these withdrawals will be capped and cannot be excessive, and it should only be for those who have hit retirement age of 65, he said, adding that the purpose of the CPF scheme is to provide a steady income stream in old age.
A possible cap could be 20 per cent of the CPF savings.
He said the move to allow lump sum withdrawals, besides the monthly payouts, will help CPF members do things that they have long wanted to do, like going on a haj, or dealing with family emergencies.
But he warned that CPF members have to understand the impact of the withdrawals: a lump sum withdrawal means a reduction in the amount left in the CPF and smaller monthly payments.
Speaking at ITE College Central campus in Ang Mo Kio, Mr Lee said the CPF Minimum Sum will be raised from $155,000 to $161,000 for those turning 55 next July, ending uncertainty over the final figure which has been increased over the last decade. He added that he does not see a need for further major increases.
The PM pledged that the Government will build more flexibility into the CPF system and give CPF members more choices. He said that the Manpower Ministry (MOM) is looking at changes to the CPF system and these changes are complex. An advisory panel has been set up to study the issues. MOM will announce details of the panel soon.
He also announced that more must be done to help about 10 to 20 per cent of elderly Singaporeans who do not have enough savings in their CPF accounts and lack other means of financial support.
The Government has decided that they will get an annual bonus when they turn 65. The yearly bonuses will be handed out as part of a new financial assistance scheme named Silver Support. To also help retirees, the lease buyback scheme, which allows flat owners to sell a part of their home to the Government and receive a regular income in return, will be extended to 4-room flat owners.
This means it will be available to more than half of the flat owners in Singapore.
Mr Lee spent much of his speech talking about improving opportunities for ITE and polytechnic students.
A tripartite committee of government, employers and unions chaired by Deputy Prime Minister Tharman Shanmugaratnam will be set up to help ITE and polytechnic students match their skills to the right jobs and move up.
He stressed that having relevant and deep skills can lead to good jobs that pay well, and this lies at the heart of the recommendations drawn up by the Applied Study in Polytechnics and ITE (Aspire) committee which recently completed an extensive review of tertiary technical education.
Mr Lee also paid tribute to many Singaporean pioneers, including Singapore's first President, the late Yusof Ishak.
A new mosque in Woodlands will be named after him, as well as a professorship in social sciences at the National University of Singapore. The Institute of South East Asian Studies (ISEAS) at NUS will now be known as ISEAS - The Yusof Ishak Institute.
Mr Lee described Mr Yusof as an outstanding pioneer in his Malay speech, noting that he was committed to progress through education, and helped strengthen Singapore's ties with its neighbours.
He also gave special thanks to Mr Yusof's widow, who was in the audience, saying: "Puan Noor Aishah, we are grateful for all the contributions and sacrifices made by your late husband to the nation. Thank you."
On Singapore's future, he said a new Jurong Lake Gardens will be created in the western part of the island by combining the existing Japanese Garden, Chinese Garden and Jurong Lake Park. The upcoming "people's garden" will also include a new Science Centre which will be completed around 2020.
These developments are about "making every corner of Singapore an outstanding living environment", he said, even as he announced the setting up of a new Municipal Services Office to serve residents in a more seamless way.
He ended his speech by noting how everyone had contributed to the Singapore Story. "At the heart of the Singapore Story is our belief in Singapore," he said, and urged them to create a better future for all.