Older Singaporeans who earn less than $4,000 a month on average and have not met the Basic Retirement Sum (BRS) can tap a new matching scheme to boost their Central Provident Fund (CPF) savings from next year.
Manpower Minister Josephine Teo said the Matched Retirement Savings Scheme (MRSS), which will be rolled out from next year to 2025, can benefit lower-income seniors, gig workers and caregivers.
About 435,000 Singaporeans will be eligible for the scheme each year, she said yesterday during the debate on her ministry's budget.
The scheme involves the Government matching every dollar of cash top-up made to a person's CPF Retirement Account, up to an annual cap of $600.
To qualify for the scheme, which is for those aged 55 to 70 who have not managed to set aside the prevailing BRS, one must have an average monthly income of not more than $4,000, which covers a majority of senior workers.
The annual value of their residence must not exceed $13,000, which covers all Housing Board flats. They must also not own more than one property, said the Ministry of Manpower (MOM).
CPF members can receive lifelong monthly payouts that can cover basic living expenses once they turn 65, after setting aside a BRS at 55. Those who make cash top-ups can get up to $14,000 in tax relief under the Retirement Sum Topping-Up Scheme. There are no restrictions on who can contribute.
Eligibility for the scheme is automatically assessed annually. Those who qualify will be notified by the CPF Board by the first quarter of each year, starting from next year, and there is no need to separately apply for the scheme, said MOM.
Upon a cash top-up being made, the matching grant for a given year will be automatically credited into the member's Retirement Account by the first quarter of the next year.
Nominated MP Walter Theseira had suggested improving the design of MRSS by asking people to commit to savings in advance, and out of future income.
For example, workers who receive government payouts such as the Workfare Income Supplement could be asked if they would agree to contribute part or all of their future payouts to their CPF accounts to qualify for the match, he said.
MOM will study the suggestion, Mrs Teo replied.
The ministry will also continue to review its policies to improve the retirement adequacy of Singaporeans, she said, citing new enhancements to the Silver Support Scheme that will benefit 100,000 more Singaporeans next year. The Silver Support payouts will also be increased by 20 per cent.
Ms Foo Mee Har (West Coast GRC) asked for an update on the CPF Lifetime Retirement Investment Scheme (LRIS).
Mrs Teo said it is a complex endeavour to meet the multiple objectives of LRIS, which has to charge low fees, have a good chance of earning higher returns than the current CPF interest rates, and also provide some assurance against downside risks.
"Given the many issues that demand MOM's attention, I seek members' understanding that we need more time to get the fundamentals of LRIS right," said Mrs Teo, adding that the Government will provide an update when ready.
