Prime Minister Lee Hsien Loong announced changes to the Central Provident Fund (CPF) scheme in hi National Day Rally speech on Sunday.
Mr Lee said the government will “allow people the option to take out part of their CPF savings in a lump sum, when they need to.”
However, he said this will be “subject to limits.”
“The amount withdrawn cannot be excessive – eg up to 20% of the total,” Mr Lee said. “It should only be during retirement, after 65. And the member must understand the trade-off – monthly CPF payments will be smaller.”
Mr Lee also said the “old Minimum Sum was too low.”
It currently stands at S$155,000, after being raised by S$7,000 from last year’s sum.
“There will be one final instalment this year, to S$161,000 for those turning 55 from July 1, 2015,” Mr Lee explained. “With a property pledge, you will need only half of that in cash – S$80,500.”
“Beyond that, I do not see the need for any more major increases in the Minimum Sum, though we may still need to adjust it from time to time, as income and basic spending needs increase, and as we live longer and have to provide more for a longer retirement,” Mr Lee added.
He said the Manpower Ministry has worked out some possibilities but, Mr Lee said, CPF changes are very complex.
MOM will announce details of an advisory panel to be set up to study these issues.
“CPF and home ownership are good schemes that work well for the majority of Singaporeans. But we are improving them further, to better support lower-income elderly who need more help, and to make the schemes more flexible for all Singaporeans.”
Mr Lee said Singaporeans “will have greater assurance and more options in retirement.”