By Terry Xu
Nominated Member of Parliament Lawrence Lien asked Manpower Minister Tan Chuan Jin in Parliament during the supplementary question segment on Tuesday about how the government derived the minimum sum for the Central Provident Fund (CPF), but was not given a direct answer.
Since the payout from the minimum sum of S$155,000 is about S$1,200 a month, Mr Lien asked how the government was able to ascertain the adequacy of this monthly payout to the CPF members.
He noted that S$1,200 might not be able to meet the living standards of those who have been earning enough to meet the CPF minimum sum. On the contrary, while S$1,200 might be enough for those from the lower-income group, their income would likely put attaining the minimum sum out of their reach.
Mr Tan replied that the the government sets a fairly stringent standard on determining how to set the minimum sum for CPF members.
He reiterated the point which he made earlier in his speech that 50% of CPF members who turned 55 in 2013 were able to meet the minimum sum.
This includes those who did have enough savings in their CPF and have to pledge their property to meet the required total, as well as those who did meet it but pledged their property so they could withdraw CPF savings above half the minimum sum.
Mr Tan pointed out that although the property might be valued at a figure higher than half of the minimum sum, keeping the pledge value at 50% prevents CPF members from over-stretching their means.
CPF regulations currently only allow members to pledge their property to fulfil no more than half of the minimum sum required.
Mr Tan indicated that more Singaporeans are working beyond the age of 55 and the retirement age had since been increased from 62 years old to 65 years old. The government is looking at further increasing the retirement age to 67 years old.
He also said that, as the labour market tightens, more companies are turning back to elders to offer them employment opportunities if they are willing to work. This in turn would allow workers to continue accumulating their retirement reserves.
Mr Tan also added that people in Singapore do not survive on payout from CPF solely and many Singaporeans own their properties which they can rent out to bring in additional stream of income. While in other countries, rents take up most of the living expenses for retirees.
At the end of his response, Mr Tan did not provide a direct answer to Mr Lien’s question, which was how the value for the minimum sum was ascertained.