Questions and more questions on CPF at dialogue session

Many at dialogue seek more transparency on how Minimum Sum is derived

The Central Provident Fund (CPF) building on Robinson Road. -- ST PHOTO: MALCOLM MCLEOD
The Central Provident Fund (CPF) building on Robinson Road. -- ST PHOTO: MALCOLM MCLEOD

From Parliament to Hong Lim Park, the Central Provident Fund (CPF) scheme has been closely scrutinised in recent weeks, and a dialogue yesterday showed that there are still many questions on the minds of Singaporeans.

About 120 people - from the retired to those who have just started work - turned up for a spirited three-hour session with Mr Hri Kumar Nair, an MP for Bishan-Toa Payoh GRC.

The volley of questions and concerns rarely faltered, and most centred on the Minimum Sum, and the monthly payouts during retirement.

They asked for more transparency on how these are determined, and why the Minimum Sum is rising. The Minimum Sum will increase from $148,000 to $155,000 next month.

During small group discussions, participants tried to help each other understand the CPF. But, at times, one seemed as perplexed as the other.

One participant, Ms Lucy Sim, who is in her late 60s, wanted to know how she could get higher CPF Life payouts than her current monthly sums of about $100.

Another, Mr Philip Lim, 64, said the $155,000 figure is a challenging sum to achieve for most people in the low- and middle-income groups.

The retiree said: "Inflation is higher now, so a lot of people cannot reach the Minimum Sum. If you give me a goal I can't reach, might as well don't give me a goal."

Other questions were on flexibility: Can Singaporeans decide for themselves at what age monthly payouts start, or draw out a larger sum from their CPF savings at the age of 55?

Currently a CPF member can withdraw up to $5,000. He can draw out more only if he meets the Minimum Sum and Medisave Minimum Sum first.

Resident Joshua Lim, 41, and his group suggested that to help more people meet the Minimum Sum, they be allowed to pledge their property beyond 50 per cent of the Minimum Sum.

In response to the questions and suggestions, Mr Nair said that meeting the Minimum Sum is not a test to be passed or failed, but rather about a need to help set aside an amount to tide a person through retirement.

"We're not making people richer or poorer by increasing or lowering the Minimum Sum. It's not a test, it's not a pass or fail exam."

He added: "Based on actuarial science, it is determined that if you have $155,000... you will have $1,200 per month for the rest of your life. And that is determined to be what a lower, middle-income person will spend in his lifetime."

But this, said some participants, is still not enough, and they wanted more information on how the figure was determined.

Mr Philip Lim wanted complete freedom to be given to Singaporeans to manage their savings. If he spent it all before he died then "God help me" he said, which drew applause from some participants.

But it also drew a sharp rebuttal from another resident, who said that is precisely why CPF savings should be protected by safeguards like the Minimum Sum.

Mr Nair had at the start of the session likened the CPF scheme to driving.

"If I'm a safe and responsible driver, the Government shouldn't tell me how fast I can drive. I can take care of myself," he said. "But sometimes, the rules are there not just to protect you but to protect other people as well."

During the dialogue, an elderly Ms Rene Yap spoke at length about her personal difficulties withdrawing money from her CPF savings and asked for help.

Later, Mr Nair told The Sunday Times: "This is a resident who has an issue. I spoke with her personally after the dialogue and I'll be doing my best to assist her. She's a resident in one of the landed estates in Thomson."

Discussions on the CPF issue have become more intense of late, with a defamation suit by Prime Minister Lee Hsien Loong against blogger Roy Ngerng for alleging that PM Lee had criminally misappropriated CPF monies, a protest against the CPF at Hong Lim Park and a debate in Parliament.

The Government has said that changes to the CPF and CPF Life schemes are in the works.

Mr Nair noted the increased attention in his session, which was organised for his residents, and had created some confusion online over who could attend.

Among the participants were about 12 who were not residents, including Reform Party chief Kenneth Jeyaretnam.

Mr Nair said he will be preparing a report based on suggestions from the dialogue to submit to the Manpower Ministry.

Acknowledging the many questions asked, he said: "What's clear to me is people need better communication. There needs to be better explanation on how things work. People should understand these things because (their) money is involved."

He added: "What is not helpful or what is not constructive is to say, 'Because I don't know the answer, therefore something bad must be happening.'"

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