A personalised retirement planning service which targets CPF members who are approaching 55 and who may need the service most – such as those with outstanding home loans – will be piloted in July.
The service, announced during the recent Committee of Supply debate in Parliament, is aimed at raising awareness and understanding of the CPF system and the new changes.
In December 2014, the CPF Board sent a mailer to about 200 members who are turning 55, inviting them to participate in a trial of the retirement planning service.
Madam Aishah Bakri took up the offer. She will be turning 55 in November this year – a pivotal point in a Singaporean’s life, where certain decisions on retirement need to be made.
Said Madam Aishah: “Before I went (for the trial), I was thinking about how much money I have, and how much money will I take out. I think that is the main thing.”
She noted: “When you go for that session, there are other things you actually have to consider. For me, that is housing. I have not fully paid (for a house), so this is one thing that I need to consider. So it is not just about taking out the money. You really have to actually look into it and decide carefully on how you are going to spend the money.”
Madam Aishah added that the session was helpful as a breakdown was provided and explained to her. She then has time to decide on her next steps. The session also provided some comfort to Madam Aishah.
“When I went for the session, they actually put in the figures, but there were some figures that they did not put in. I thought: ‘How come it’s not there?’ Later, I realised why – because it is the CPF monies that I actually took out for investment,” she said.
“So it helps me, because I realise I have money that I invested. So after I went for that session, I came back and collated all my documents. I went through them and I said: ‘Okay, I actually have more than what is shown.’ That is comforting,” she shared.
SERVICE TO BE OPENED UP TO MORE MEMBERS FROM JULY
From July, the service will be piloted and opened up to more members – but only to those turning 55, and still servicing a housing loan, who may be affected by the transfer of monies from their Ordinary Account to their Retirement Account.
Ms Dorcas Fong, senior manager at the Retirement Management Office at the CPF Board, said reaching 55 is an “important milestone” for members.
“A lot of members actually do not realise it because at age 55, what happens is we transfer Ordinary Account and Special Account savings to create the Retirement Account. This actually reduces the Ordinary Account savings available for payable obligations, such as the housing loan people,” she said.
Members will get personalised service that will take into account their needs and circumstances.
Said Ms Fong: “So if a member comes to us at 54 and we notice that he still has an outstanding housing loan, what we tell him is he can use his Ordinary Account savings to do an early repayment of the loan. In this case, he does not carry obligations into 55 and he can set aside more for his retirement as well.”
“For now there are a few obligations, which is housing, investment, education. If the member has all these concerns, then we will take those out and we will run through briefly with him so he can understand the implications and the options available to him. We estimate their future retirement incomes such as payouts using their current balances,” she added.
The CPF Board said that through the pilot phase, it will fine-tune the initiative to better serve its members.
“We discovered that members actually preferred charts and graphs in terms of communicating to them. They also find some comfort when our officers show their experience and scribble quick notes for them. So we are planning to improvise the material for the upcoming pilot in July,” said Ms Fong.
Madam Aishah added that information pertaining to how much a member has taken out of his CPF for investment purposes, should also be presented.
“They should have these figures so that you have a full view of the amount you have, including the investment,” she said.
The retirement planning service will be conducted at the CPF Service Centre at Robinson Road. Depending on the complexity of the case, each session will last for about 45 minutes.
Mailers will be sent to target groups to inform them of the service. The CPF Board will ramp up this initiative gradually from 2016.
Source: www.channelnewsasia.com
