Last September, the government set up the CPF Advisory Panel to review Singapore’s compulsory savings system – the Central Provident Fund (CPF). This February, the panel gave its recommendations which were accepted by the government [Link].
Summary of the main changes:
1. Lump sum withdrawal
A lump sum withdrawal, at age 65, of up to 20% of a CPF member’s savings. Members will be able to withdraw up to 20% of their Retirement Account, inclusive of the $5,000 that can already be withdrawn at age 55.
2. Adjustments to the Minimum Sum
CPF members have the option to park a Basic Retirement Sum of $80,500, a Full Retirement Sum of $161,000 or an Enhanced Retirement Sum of $241,500 at age 55. The monthly payouts at age 65 will range from $650 to $1,900. Members can also withdraw any amount above the Basic Retirement Sum, provided they have a property bought using CPF funds.
3. Longer Notice to the Adjustment of the Retirement Sum
The Basic Retirement Sum ($80,500 in 2016) will be increased by 3% yearly for members turning 55. The fixed percentage increase takes into account inflation and increase in standard of living, and at the same time provides members with lead notice. This is a demarcation from the current system where the Minimum Sum is only announced a few months in advance.
To help Singaporeans understand the new CPF Life plan better, the government created an example with an accompanying video. The video was uploaded on YouTube last month (19 May):
(Mr Bakar’s story) CPF – Your Assurance in Retirement
https://www.youtube.com/watch?v=UAzJWKdMNUM
“Like Mrs Ang, Mr Bakar will also be turning 55 next year. How will the recent CPF enhancements help him grow his retirement nest egg?”
The video is linked to a post on the Facebook page of Gov.sg:https://www.facebook.com/gov.sg/posts/10153249488473686.
However, netizens are not impressed with the video. Many are calling it “government propaganda” or “wayang”. Most netizens are demanding the government to return all their CPF money to them, as per the original agreement:
On YouTube, the comments were so bad that the government was forced to shut the comment section of the video:
Source: www.tremeritus.com
