Minister gives details of CPF retirement payouts

For Life or Retirement Sum schemes, 75% receive under $500 a month but younger cohorts expected to get more

Nearly three-quarters of those getting monthly payouts from the Central Provident Fund (CPF) Life scheme or Retirement Sum Scheme receive less than $500 a month, said Manpower Minister Josephine Teo.

But younger cohorts are expected to get higher payouts, given "increased labour force participation and improvements to the CPF system made in the past decade", she added. For example, about six in 10 active members who turned 55 in 2017 had, at least, the basic retirement sum of $83,000 in their Retirement Accounts.

This sum will give them a monthly payout of between $700 and $750 for life, she said.

Mrs Teo made the point on Monday in a written parliamentary reply to Nominated MP Walter Theseira, who wanted, among other things, a breakdown of average monthly payouts under both schemes.

Last December, there were about 268,000 CPF members aged 65 and older who were getting retirement payouts from either of the two schemes, Mrs Teo said.

She added that three-quarters were property owners, 54 per cent of whom owned four-room or larger Housing Board flats.

Some 29 per cent owned three-room or smaller flats, while 17 per cent owned private properties.

Mrs Teo also said the average monthly payout varies greatly among people from different age groups.

The payout for those aged 65 to 69, for instance, is more than double that of those aged 80 to 87.

In Parliament on Monday, Mrs Teo also fielded questions from several MPs who had asked if the CPF Board could allow automatic payouts when a member turns 65.

They raised these questions after a photo of a CPF Board letter advising the recipient about his payout options on turning 65 went viral on social media last month.

The photo led some people to mistakenly conclude that the payout age had been raised to 70, while others thought that if they did not apply to start receiving payouts at age 65, the next time they could do so would be at 70 years old.

 

Mrs Teo said there will be no change in the existing policy. CPF members can continue to choose to start monthly payouts at 65, or defer them to any time between 65 and 70.

She added that payouts will not automatically start at 65 as this would deprive members of the benefits of keeping their money in their CPF accounts.

A version of this article appeared in the print edition of The Straits Times on February 20, 2019, with the headline 'Minister gives details of CPF retirement payouts'. Print Edition | Subscribe