The_King Posted November 15, 2019 Share Posted November 15, 2019 SINGAPORE - It is important to help Singaporeans save more for retirement adequacy, said Minister for Manpower Josephine Teo. To meet their needs, especially as they live longer lives, the Central Provident Fund (CPF) basic retirement sum should be regularly adjusted to ensure that payouts remain relevant to members. She was speaking at the National University of Singapore Faculty of Arts and Social Sciences 90th anniversary gala dinner held on Friday (Nov 15) at Carlton Hotel. Mrs Teo was a student at the faculty from 1987 to 1991. Under the CPF Retirement Sum Scheme, members can set aside a basic retirement sum at age 55, and receive monthly payouts that can cover basic living expenses from the time they turn 65. The basic retirement sum is raised yearly as part of the recommendations made by the CPF Advisory Panel in 2015. The panel recommended that the basic retirement sum be increased by 3 per cent each year for members who turn 55 between 2016 and 2020. This rate of adjustment takes into account long-term inflation and increases in standard of living. A CPF member who turned 55 in 2016 is required to have a basic retirement sum of $80,500, while a member who turned 55 in 2017 would have a sum of $83,000. A member who turns 55 this year needs to have a basic retirement sum of $88,000. This amount will go up to $90,500 for someone who hits 55 next year. Mrs Teo said: "One factor affecting retirement adequacy is inflation. When savings and monthly payouts are fixed, their real value erodes over time." For instance, she brought up the minimum sum (the rough equivalent of the full retirement sum today) which was first introduced in 1987. The sum was set at $30,000 and provided about $300 in monthly payouts for 20 years. "The same payout may have felt all right when the payouts first started, but fast forward to today, that same payout feels inadequate," she noted. The minister also explained that the government wants to ensure the basic retirement sum is properly set, taking into account the fact that the CPF member will get the payouts only a decade later. A member turning 55 in 2020 who sets aside his basic retirement sum of $90,500 will get $740 to $800 in lifelong monthly payouts from age 65 in 2030. She said: "How can we be better assured that the basic retirement sum will produce adequate payouts 10 years down the road, and throughout retirement? How can we ensure that the basic retirement sum is set so that payouts continue to cover basic expenses in the future? "With rising aspirations, retirement adequacy is not just a matter of meeting basic expenses." Mrs Teo noted that over the last decade, the proportion of active CPF members who met their basic retirement sum at age 55 has improved, from 38 per cent to 62 per cent. This is even as the basic retirement sum has been gradually raised to keep pace with inflation and improvements in standard of living. The CPF has to evolve to keep pace with changes like increasing longevity, she added. "With people living to 100 or beyond, patterns of working life and retirement will change... More people change careers or reskill later in life. They may not always be employees, but can choose to be self-employed for a while. They take breaks mid-career, but can continue working into their 70s," she said. She reiterated that over the next decade, CPF contribution rates for older workers will be gradually raised. This move was first announced by Prime Minister Lee Hsien Loong during this year's National Day Rally. Mrs Teo said: "Progressive CPF interest rates of up to 6 per cent per year benefit all members, especially those with lower balances. We provide tax reliefs to people who top up their own retirement savings or that of their loved ones." She added that homes can also potentially supplement retirement incomes, as people can rent out rooms or the home. Others can right-size their homes after their children have moved out. Schemes like the Lease Buyback Scheme and Silver Housing Bonus for Housing Board flat owners can also help them unlock value from their homes. Singapore has done well, but the system can be constantly improved by planning ahead, she added. "In that sense, the CPF must remain a 'live system', always evolving and ever-responsive to emerging needs." https://www.straitstimes.com/singapore/manpower/cpf-basic-retirement-sum-should-be-regularly-adjusted-so-payouts-keep-pace-with Link to comment Share on other sites More sharing options...
Homelander Posted November 16, 2019 Share Posted November 16, 2019 It should be flexible and not lockdown like what they are doing now 1 Link to comment Share on other sites More sharing options...
aaur4man Posted November 16, 2019 Share Posted November 16, 2019 CB talk cock only means locking higher Link to comment Share on other sites More sharing options...
Satki Posted November 16, 2019 Share Posted November 16, 2019 The constant tweaking simply affirms that nincompoops are managing it. And after the tweaks, the payout is still insufficient to survive let alone live. I think the minister should be sacked. Oh wait They may not be able to earnthat much in the private sector cos all good jobs are taken over by ft. 2 Helping a friend to gain more subscribers. He is quite a talented music creator. Look for "Thee Influence" in Youtube Link to comment Share on other sites More sharing options...
aaur4man Posted November 16, 2019 Share Posted November 16, 2019 15 minutes ago, Satki said: The constant tweaking simply affirms that nincompoops are managing it. And after the tweaks, the payout is still insufficient to survive let alone live. I think the minister should be sacked. Oh wait They may not be able to earnthat much in the private sector cos all good jobs are taken over by ft. They gave $66K jod to CECA Link to comment Share on other sites More sharing options...
XianGe Posted November 16, 2019 Share Posted November 16, 2019 49 minutes ago, aaur4man said: CB talk cock only means locking higher Ya basically to tell u to forget about meeting it Link to comment Share on other sites More sharing options...
socrates469bc Posted November 16, 2019 Share Posted November 16, 2019 i m surprised none in the opposition propose any solution to this problem since this is a potential achilles heels for incompetent loong loong. allow rich lao tiko me to offer a suggestion. the crux of the issue is cpf not being able to pay out sufficiently to the contributors, thus, this is signalling a need to revamp investment procedure. rite now, cpf money is converted into special sgd govt securities which is then used by gic for investment purposes. the interest rate on cpf accounts is based on risk-free instruments. ie sgd govvies. as a result, the returns from such investment is way below sgx market returns over the 5/10 or even the 30 yrs horizon. so my suggestion is simple, let cpf fund be managed directly by a panel of decent investment specialists and the interest rate be combination of a fixed component based on sgd govvies and a floating component based on yearly market returns generated. i welcome any govt detractors to question my suggestion. 2 Link to comment Share on other sites More sharing options...
aaur4man Posted November 16, 2019 Share Posted November 16, 2019 15 minutes ago, socrates469bc said: i m surprised none in the opposition propose any solution to this problem since this is a potential achilles heels for incompetent loong loong. allow rich lao tiko me to offer a suggestion. the crux of the issue is cpf not being able to pay out sufficiently to the contributors, thus, this is signalling a need to revamp investment procedure. rite now, cpf money is converted into special sgd govt securities which is then used by gic for investment purposes. the interest rate on cpf accounts is based on risk-free instruments. ie sgd govvies. as a result, the returns from such investment is way below sgx market returns over the 5/10 or even the 30 yrs horizon. so my suggestion is simple, let cpf fund be managed directly by a panel of decent investment specialists and the interest rate be combination of a fixed component based on sgd govvies and a floating component based on yearly market returns generated. i welcome any govt detractors to question my suggestion. They already kena fixed on other issues.... where got time 1 Link to comment Share on other sites More sharing options...
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