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Tag: CPF-LIFE

  • Netizens Slam Government’s New Video On CPF Life

    Netizens Slam Government’s New Video On CPF Life

    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 Members will be able to withdraw up to 20% of their Retirement Account, inclusive of the $5,000 that can already be withdrawn at age 55.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

  • CPF Minimum Sum In Three Sizes

    CPF Minimum Sum In Three Sizes

    I was thinking of doing a listicle, a brainless but, hopefully, funny way of conveying information. Except that the CPF review panel’s recommendations have left me brain-dead and I am not feeling terribly funny. Bear with me please because I think this is too big an issue not to destroy some brain cells over.

    Now, the panel wants us to leave this gawdawful term “minimum sum’’ alone for the moment and work backwards. Let’s not think about how much money we have in our CPF when we turn 55, it says, but what we hope we will get when we turn 65, when monthly payments kick in.

    Here’s how the panel wants the changes framed:

    If you are 55 now, in 10 years, you’ll need about $650 to $700 a month. The panel has factored in inflation AS WELL AS rising standards of living. So it’s not just for bread and water, but kaya and kopi as well.

    To get this kind of payout means leaving $80,500 in your CPF. That is, if you own your home. Why? You can rent it out if you need money. If you sell it because you prefer to rent a home, the CPF money you used to pay for it will still go back into your CPF – so it’s back up again. (Forget everything that has been said about being able to pledge your property ecetera. Serious.)

    If you do not own property, that $80,500 is doubled to $161,000 (Yup, that’s the minimum sum for those turning 55 next year) It means higher payout which is also to cover for expenses like rent, which a homeowner wouldn’t have to worry about.

    If you actually want to put in more money into your CPF, you can. Up to $241,500. Now, why would anyone want to do it? Because, hey, the CPF pays better returns than the banks or even commercial insurance companies. And yes, even higher payout of close to $2,000 a month

    So that’s why the panel doesn’t want to use the term “minimum sum’’ anymore but RETIREMENT SUM. Besides sounding like a ransom demand, it now applies to three different S/M/L sizes – Basic, Full and Enhanced.

    To recap:

    Basic is $80,500

    Full is $161,000 (doubled)

    Enhanced is $241,500 (tripled)

    In case you’ve forgotten everything about what happens at 55…

    1. You can take out everything in excess of Basic if you own your home. If you don’t even have a Basic, you can take out $5,000. Yup, nothing has changed.
    2. What’s new: that Basic sum will increase by 3 per cent a year so that you wouldn’t be so suddenly surprised by an announcement when you’re 54.

    But quite a lot can happen in 10 years time when you hit 65.

    1. You can decide to withdraw 20 per cent of the sum you left inside. It’s been accumulating interest after all (and you need to pay for your son’s wedding or your daughter’s overseas education). Remember though that getting a lump sum early means smaller monthly sums later on. So you can expect some incentives from the G to get you to leave your 20 per cent alone. Now, for those with really really low balances, it’s no-go.
    2. You can decide to leave your money in there because you really don’t need it yet. Instead, you can accumulate even more interest and get a bigger pay-out – about 6 to 7 per cent more – later. You can do this at most for five years. (The CPF isn’t supposed to make your fortune but provide for retirement after all.)

    Okay, so far, the panel hasn’t said anything about those with not enough to meet even the Basic. First off, they aren’t going to be penalized or have their homes taken away from them. They will still get an income until they die, albeit a smaller sum. Still, what can be done to help them?

    There are some things in place already such as an extra 1 per cent interest for those with $60,000 in CPF balances. Plus there is the Work Income Supplement for the lower paid which also goes into their CPF. (I guess we have to see what the Budget will bring but there is a Silver Support in the offing in which the G is expected to give cash/CPF bonuses to older folk)

    The good news is that increasingly over the years, more and more people will be able to meet the Basic sum. Right now, 55 per cent of CPF members can. And by 2020, 70 per cent will be able to do so. Hey, that’s what the panel says okay…!

    Those are the panel’s key recommendations but it also raised other matters for the G to consider. For example, the panel…

    1. Agreed with the NTUC’s suggestion to bring back up the CPF contribution rates of those aged 50 to 55 who are working. This was cut to encourage employers to employ older workers and it’s working well enough already it seems.
    2. Like the NTUC, it wants the salary ceiling for CPF contribution, which is now $5,000, raised. In two swoops, voila! More CPF money! (Although how employers will react to this I don’t know)
    3. Wants spouses to be allowed to start CPF Life accounts for their non-working partners.

    As you can tell, I am not commenting on the changes because I am still trying to wrap my head around them! At first glance, they seem populist, a bid to satisfy as many differing demands as possible (except the Return my CPF at age 55 lobby). Or it can be framed as a matter of choice and giving people a bit more control over their money. The panel prefers to use the word “flexibility’’. Flexibility is so complicated isn’t it? And that’s just Part 1 of the recommendations. Part 2 will be about “flexible’’ payouts.

    Don’t forget that there isn’t just one CPF Life plan, but a few…you pick one. I’ll bet anything that most people have forgotten this.

     

    Source: https://berthahenson.wordpress.com

  • Duplication Of Health Insurance Coverage A Drain On Elderly CPF

    Duplication Of Health Insurance Coverage A Drain On Elderly CPF

    Many members of the pioneer generation are already covered by private health insurance schemes, such as IncomeShield, and use their Medisave funds to pay the premiums.

    With the launch of the compulsory MediShield Life, they will have to pay an additional premium.

    While pioneers will receive subsidies to offset the higher premium, servicing two policies will drain their Medisave funds, which were set at a lower ceiling in the past when they were still working.

    The pioneer may even have to give up his existing private health plan. This is not prudent, given that the policy may have been in force for decades and include riders to offset other medical and hospitalisation expenses.

    Also, an existing medical condition covered under the private plan will become a pre-existing condition under the new MediShield Life plan, and premium loading is inevitable.

    Can the Ministry of Health explain how the new MediShield Life will address these concerns?

     

    Christopher Tang Wei Ling

    *Letter first appeared in ST Forum, 23 Jan.

     

    Source: www.therealsingapore.com

  • MP Inderjit Singh Urge Singaporeans to Voice Concerns and Feedback

    Credit: Inderjit Singh
    Credit: Inderjit Singh

    I received many comments to my post last week, and many messages from Singaporeans, both personally as well as online. Although I disagreed with some policies which I highlighted, some seem to think that I was rejecting all the PAP Government’s policies which is not the case. 

    In my post, I touched on a number of issues in the way some policies have been implemented which I felt should have been better done. But I also acknowledged that the government has been resolving many of the problems, like transport and housing, and setting a new direction for the future especially in our social policies. For example, I pointed out that the icing on the cake was the Pioneer Generation Package, which is a good example of an inclusive policy showing compassion. 

    I am sure the government will continue to focus on solving the problems I mentioned and it will be good to also focus on how to have better policy formulation and implementation so that we have more effective policies in the future. I am confident the government will be doing this. Using the OSC approach for major policies will be one good way to have more ground up inputs for better policies. 

    The government has also put in place many social safety nets in the last three years and this has generally been helpful, but as I mentioned in my post, what will be useful is for the government to help Singaporeans through higher incomes instead of hand-outs. Compulsory progressive wages for cleaners and security officers is a good start, which I have been calling on the Government to do for many years. I would like to see this expanded so that we can see more Singaporeans earning a decent living wage. 

    While many Singaporeans wrote to me to express their appreciation for my post, some who wrote to me said I made some factual errors especially when I mentioned that cost increases had outpaced wage increases. Let me share what they highlighted to me. They pointed to government statistics that showed that net wages for Singaporeans have generally risen even after taking into account inflation. 

    One Singaporean currently studying in the UK wrote to me highlighting that the National Talent and Population Division, a government organization, has been keeping in touch with students studying in the UK and overseas. 

    A couple of grassroots leaders told me they felt that the asset enhancement policy did benefit them with real wealth and they are happy with it. Nevertheless, I was glad the PM said that we are looking more carefully at retirement adequacy such as by improving CPF-LIFE and that MND is further improving policies to help elderly Singaporeans unlock the savings in their flats so that they can look forward to a comfortable retirement without having to worry about their finances. It is important we continue to address these issues so that Singaporeans feel life has become better.

    Some have asked me what prompted me to express my views and if they would lead to concrete changes. As an MP elected by the people, it is my duty to make an assessment of the issues which concern Singaporeans based on the feedback I get and reflect them as accurately as possible so that the government can improve upon them. As to whether the government will listen, I can tell you that the reason I voice these concerns so confidently, is because I know they do not fall on deaf ears and that some action will be taken on them. I have seen this for the past 18 years in Parliament and that spurs me on to keep on doing my best as an MP. So the PAP government can and will solve problems and we all must continue to voice our concerns and feedback. 

    The debate in Parliament last week was a robust one. I am particularly heartened to see our Prime Minister reiterating what the PAP promised at the last GE2011 – to “Secure Our Future Together”. Many of my fellow MPs also spoke about how we can achieve this and we are on the right track. With this as a governing objective, we should achieve our desired outcome so that all Singaporeans feel their personal and family’s future remains comfortable and secure while the country prospers. 

    There is one thing we all need to do together as Singaporeans. We need to rally behind this single cause making Singapore a place where our children, and their children, can live comfortably, be proud of and can call home.

    Authored by MP Inderjit Singh

     

    EDITOR’S NOTE

    We like the idea of speaking up and sharing your opinion if you find something is not right and worth correcting simply by saying what you truly feel about it. That is the beauty of discourse and honesty. There will always be a fruitful outcome at the end of it all.

    Let’s not argue for the sake of arguing. 

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