SINGAPORE – The Government is not ruling out relooking the limit of $5,000 that eligible Central Provident Fund (CPF) members can withdraw unconditionally upon turning 55, Minister for Manpower Tan See Leng said on Tuesday.
However, he cautioned in Parliament that higher withdrawals will lower future CPF payouts for the individuals.
“We constantly look at and review the policy; and looking at the broader context of the savings... the percentage of people (attaining the Basic Retirement Sum), we are not completely closed off,” said Dr Tan.
He was responding to Non-Constituency MP Leong Mun Wai’s question on whether the $5,000 limit can be increased in line with inflation, to help lower-income Singaporeans with less CPF savings who want to use the money to fulfil their aspirations.
Mr Leong, who is secretary-general of the Progress Singapore Party, also noted that the upcoming Majulah Package will beef up the Retirement Account balances of lower-income Singaporeans, potentially providing leeway for a higher unconditional withdrawal limit.
Unveiled at the National Day Rally in August, the package includes various top-ups to the CPF accounts of low- to middle-income Singaporeans aged 50 and above in 2023, such as an annual CPF bonus of up to $1,000 so long as they continue working.
Currently, once CPF members have set aside the Full Retirement Sum, which is $198,800 for those turning 55 in 2023, they can withdraw any savings in their Ordinary Account and Special Account beyond that sum, from age 55. Those who own a property with a lease lasting at least until they turn 95 can also withdraw savings above their Basic Retirement Sum, which is $99,400 for those turning 55 in 2023.
Members born in 1958 or after who cannot meet the sums can still withdraw up to $5,000 unconditionally from age 55.
Dr Tan said the CPF system offers “adequacy for peace of mind at retirement” over the long haul.
Determining the withdrawal limit entails a “very delicate balance” of the trade-offs between giving CPF members who reach 55 an immediate uplift and providing them with a longer-term payout, he said.
“There are some savings that are for the long term and there are also short-term measures to help out,” he added.
This is why various government assistance schemes are put in place instead to help Singaporeans overcome some of the increased cost of living they face currently, he said.
Examples the minister cited included one-off support measures under the Assurance Package announced at Budget 2023, such as the Cost of Living Special Payment of between $200 and $400 for eligible adult Singaporeans. Eligible households will also receive up to $760 in U-Save rebates this year.
“Nonetheless, the CPF system has some built-in flexibility,” he said.
For instance, those who turned 55 from 2013 onwards can withdraw up to 20 per cent of their Retirement Account savings from age 65.
Property owners also have the flexibility to set aside the Full Retirement Sum with a mixture of property and cash, and can thus withdraw their Retirement Account savings above the Basic Retirement Sum, he said.
