Almost half of CPF members in 2016 cohort can’t meet Minimum Sum – can only withdraw up to $5,000

Hidden among the many written replies to Parliamentary questions posed last week (10 Jul) was one answered by new Manpower Minister Josephine Teo.

In her written reply she started out saying that some 42% of CPF members decide not to withdraw their CPF monies, even when their monies are above the statutory minimum sum.

Ms Teo said, "As of end 2017, 42% of those who turned age 55 in 2016 did not withdraw any CPF monies within a year of their 55th birthday."

"This includes the first $5,000 from the Ordinary and Special Accounts (OA and SA) which members can withdraw unconditionally, monies above their cohort Full Retirement Sum, as well as monies above Basic Retirement Sum which can be withdrawn using property charge or pledge," she added.

But she also revealed that about 60% of the 58% who did withdraw, took up to $5,000 out of their CPF.

Ms Teo continued, "For the same (2016) cohort, about 53% of active members met their Full Retirement Sum in cash and pledge at age 55 in 2016."

"Of this group, about 5 in 10 left additional funds in their CPF Ordinary or Special Accounts. Based on our observations, members do so because they have no immediate need of the money, or they wish to take advantage of the higher CPF risk-free interest rates," she said.

In other words, for the cohort at age 55 in 2016, only 53% meet their minimum sums, leaving 47% unable to do so.

13,500 take out CPF monies and leave Singapore every year

And from 2013 to 2017, an annual average of 13,500 CPF members, or 0.4% of total CPF members, withdrew their CPF monies when they left Singapore.

"This includes former Singapore Citizens (SC), former Permanent Residents (PR) and foreigners who contributed to the CPF before 2003," she said.

But she noted that former SC and PR members can still leave their monies in the CPF after they have given up their Singapore citizenship or permanent residency.

"CPFB does not track the number of former SC and PR members who choose to retain their monies in the CPF," she added.

She did not breakdown the proportion of SC and PR leaving Singapore but presumably, majority of the 13,500 who took out their CPF monies and left Singapore each year for good would be Malaysians who were formerly Singapore PRs.

This entry was posted in Current Affairs, Labour, Opinion.
This entry was posted in Current Affairs, Labour, Opinion.