Singapore Democratic Party (SDP) has commented that the government’s recent announcement to be more flexible on the Central Provident Funds (CPF) is in response to the growing resentment towards the national retirement saving .
The government has recently stated that it is willing to be more flexible on allowing a different Minimum Sum for different groups of people in its on-going review on the CPF scheme.
SDP has commented that this move by the People’s Action Party (PAP) is the “clearest sign yet that the ruling party is worried about the backlash that has developed to its move to withhold the people’s hard-earned savings”. However, it added that such a measure will only confuse and complicate the CPF issue.
The SDP said that the argument by PAP that the Minimum Sum Scheme is needed to prevent retirees from squandering their savings is at best dubious. It argued that there will always be the few who do not know how to spend their money wisely while the vast majority who are financially prudent, should not be penalised by having their retirement savings withheld.
It went further by blasting the CPF as being an unfair, unintelligent and also immoral policy. Stating that retirees need their retirement savings for various purposes like investing in a business, helping to pay for their children’s education or simply to survive on in expensive Singapore.
“In the end, the Government will still withhold the much-needed savings and leave retirees insufficient income to live on.” said SDP in their statement and reiterates their party stance which is to abolish the Minimum Sum Scheme and return to retirees all their money.
Due to the unintended attention brought to CPF by Roy Ngerng’s contentious blogposts on CPF matters and the defamation suit launched by Prime Minister Lee Hsien Loong on Roy Ngerng, some members of the public have either sought to know more about the retirement saving scheme or voice their disagreement on the policy.
For the full statement by SDP, visit SDP’s website here.
The Minimum Sum was introduced in 1987. Upon reaching the age 55, a portion of one’s savings in the Central Provident Fund will be transferred to the Minimum Sum Scheme. If the amount does not meet the required Minimum Sum, a portion of your new contributions, voluntary contributions, government top-ups and other refunds received after 55 will be used to top up the sum.
When it was first introduced, the Minimum Sum stood at $30,000. This was steadily increased to $155,000 in 2014 and will further rise to $161,000 in 2015.
Read more about the minimum sum here, “CPF Minimum sum: Retirement scheme, or money hoarding monster?”