SINGAPORE - There could be more options for Central Provident Fund (CPF) members in deciding on how much they want to save, rather than a one-size fits all approach to retirement funding.
And driving the change is the focus on how much each individual needs, said Manpower Minister Tan Chuan-Jin.
"When you are looking at different levels of payouts, there are different amounts that they need to save and they need to keep in their CPF," he said, giving for the first time a hint of where the CPF review was heading.
Speaking to the media in a wide-ranging interview on manpower issues this week, he said the advisory panel set up by the Government in September to review the CPF should have their first set of recommendations ready by January.
Ahead of the panel's report, Mr Tan said that its thinking behind the CPF has shifted from the current approach, where the Government stipulates one Minimum Sum for all members. The sum is $155,000 but goes up to $161,000 in July.
"So I think we are looking at perhaps various options available and then tied to those options with the differing amounts that you need to accumulate," he said.
"We realised that that's the thing because actually people do have different needs and people are looking at different requirements. So would there be a basis upon which we look at how this CPF could be structured?"
But he also cautioned that having too many options could mean over-complicating the CPF, which is already a complaint among many people.
Still, the panel is fully aware of the tensions in the CPF, with many people wanting more flexibility in using their own savings.
"There are individuals who feel that this is my money and therefore why should I not be allowed to take it out," Mr Tan noted. "But I think the idea really is to help provide every individual with at least a basic savings plan of sorts, to allow them to be able to sustain for the long term."
He also covered issues such as re-hiring workers beyond age 65 and raising productivity in the interview.
The Government will use the law to compel firms to re-hire workers until 67 in "two to three years time", he said, urging firms to use the incentives that the Government is planning to announce early next year to make the transition.
On productivity, the minister warned that firms have to start adapting to slower manpower growth which is expected to start as early as 2020.
They "have to restructure, change the way they do things" so as to rely on fewer manpower, Mr Tan said. "The time to change is now."
The minister is upbeat about the prospects for next year. The economic outlook remains positive, he said, adding "when the economy is healthy, it means that companies can do well."
