CPF Act amendments yesterday! Under the annuity scheme which has 4 (initially 12 when it was proposed) subplans – Basic, Balance, Plus and Income, the CPF member can get pay-outs for life. Income is the highest monthly pay-out and nothing is left behind if the member dies, while Basic is the opposite end of the spectrum. Minimum pay-out but maximum leftover for your beneficiaries. Members with at least $40,000 in their retirement account would be automatically part of the scheme, which forms about 70% of the people turning 55 in 2013, and others who don’t meet this amount can opt in. For those who will be part of the scheme, you just have to make a simple decision on whether you want to leave anything for your kids when you die. If yes, then how much. For example, if you have $40,000 and choose Basic i.e. maximum scraps for the family, the monthly payout would be $300+ from age 65.
Wait a minute. CPF is all our money in the first place and now the government is telling us that the pay-outs are for life? Shouldn’t it in the first place?
CPF Life payouts are for life
Tue, Jul 21, 2009
by Dawn Tay
SINGAPOREANS will receive monthly payouts from the Central Provident Fund (CPF) Life annuity scheme for the rest of their lives although the law does not provide for it, assured Manpower Minister Gan Kim Yong.
Under amendments to the CPF Act passed yesterday, CPF members will receive a steady stream of retirement income. But premiums and payouts are at the Government’s discretion and will vary with factors such as interest rates.
Two Members of Parliament, Madam Halimah Yacob (Jurong GRC) and Madam Ho Geok Choo (West Coast GRC), expressed concerns over the variability of premiums and payouts, as well as the solvency of the Lifelong Income Fund, which holds the money and is run by the CPF Board.
In response, Mr Gan said that a guaranteed monthly amount is not feasible and that it would be adjusted regularly to ensure the fund’s solvency.
He added: “CPF Life members can rest assured that they will receive payouts for as long as they live.”
Singaporeans aged 55 or older can apply for the scheme in September, ahead of its starting date in 2013.
Those with less than $40,000 in their Retirement Account – which automatically qualifies members for the scheme – can opt in, supported by other government schemes to boost retirement savings.
From next month, CPF members below 55 can also receive top-ups from family members and employers.