SINGAPORE - Singaporeans can look forward to one-on-one retirement planning services to be rolled out by the Central Provident Fund (CPF) Board in the later half of this year.
This is to ensure that CPF members better understand the various CPF options and can choose which one best suits their individual needs, said Manpower Minister Tan Chuan-Jin in Parliament on Monday.
A three-month trial has been completed and the service will be aimed at CPF members who are approaching 55 and need guidance the most, such as those with outstanding housing loans, Mr Tan added.
"Let me assure the House that my ministry and the CPF Board are committed to guiding members through these critical junctures as they transit from their working life into retirement," he said.
Mr Tan also addressed suggestions from MPs like Mr David Ong (Jurong GRC) to restore the CPF contribution rates for workers above 55 to the same level as younger workers.
In this year's Budget, CPF contribution rates for those aged above 50 to 55 will be restored to the 37 per cent that younger workers enjoy. But workers aged above 55 still have significantly lower rates.
Mr Tan said that "it would not be prudent" to restore rates for those above 55 too quickly as the employment rate in this group is still considerably lower than for those who are younger, and higher rates would disincentivise employers from hiring them.
As for younger Singaporeans, Mr Tan said that the retirement picture is healthy as "most Singaporeans who work regularly and make prudent housing choices, should have no worries meeting their retirement needs".
To illustrate his point, he said that if the CPF contributions of a 25-year-old polytechnic graduate were "set aside in a Khong Guan biscuit tin, he would have about $55,000 by the time he reaches 65".
But with the interest enjoyed by savings in the CPF system, "he would have about $165,000 at age 65 - three times what he put in".
"This is not magic, just math," he said.