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Workers need not worry: Chuan-Jin

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TOH YONG CHUAN on 26 May 2014

The Straits Times

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MANPOWER CORRESPONDENT

 

SINGAPOREANS who do not meet the Central Provident Fund (CPF) Minimum Sum need not worry, Manpower Minister Tan Chuan-Jin said yesterday.

 

This is because there are other ways to help this group in their retirement years, he added.

 

Currently, half of CPF members who turn 55 have less than the Minimum Sum in their accounts. The Minimum Sum is now $148,000 and it increases to $155,000 from July 1.

 

Among those who could not meet the Minimum Sum are older Singaporeans who were working when Singapore was still a developing country and wages were low, noted Mr Tan in a blog post.

 

They will get help through the Pioneer Generation Package to lighten their health-care costs.

 

Those who did not work regularly will also not meet the Minimum Sum, but “many among” them have family support, said Mr Tan.

 

There are other ways to supplement their income in their twilight years, he said.

 

For the majority of older Singaporeans who own their homes, they can rent out rooms in their homes for income.

 

Other seniors can turn to the Silver Housing Bonus which gives a cash grant if they downsize their flats, or tap the Lease Buyback Scheme to cash out their HDB flats.

 

Low-wage workers who are still working will get special attention, he assured.

 

For instance, the Workfare scheme, in which the Government provides wage support for those earning below $1,900 each month, also pays into their CPF accounts.

 

The extra 1 percentage point interest for the first $60,000 of CPF savings will help workers grow their savings, Mr Tan noted.

 

From next year, workers will also receive between 1 and 2.5 percentage points more in the CPF, with the bulk of the hikes going into medical and retirement needs.

 

Apart from these moves, the minister hinted that more changes are afoot.

 

“We are looking into other ways to further strengthen our support for those who might need more help,” he said, without elaborating.

 

While agreeing that the CPF Minimum Sum provides a reference point on how much to save for retirement, self-employed piano tuner Bernard Moey said he will have a harder time reaching the Minimum Sum than employees on companies’ payrolls.

 

Self-employed Singaporeans are required to contribute only to their CPF Medisave Account.

 

“Besides the CPF, I will try to be self-reliant, save as much as I can, and continue working for as long as I can,” the 45-year-old added.

 

Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.

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