Last week (10 Jul), in response to an MP’s question, Manpower Minister Josephine Teo revealed that 53% of the CPF members who were 55 years of age in 2016 were able to meet the Minimum Sum.
“For the same (2016) cohort, about 53% of active members met their Full Retirement Sum in cash and pledge at age 55 in 2016 (i.e., able to set aside the Full Retirement Sum fully in cash, or met Basic Retirement Sum in cash and provided sufficient property pledge or charge),” she said.
And she added that of this group who have met their Minimum Sum, about half of them even 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.
Tharman: Percentage of CPF members meeting Minimum Sum on the rise
Indeed, the percentage of CPF members able to meet the Minimum Sum is on the rise.
This was observed and disclosed by DPM Tharman. Back in 2012, he revealed that percentage of active CPF members who met their Minimum Sum at age 55 improved from 36 per cent in 2007 to 45 per cent in 2011.
Speaking in Parliament at the time, Mr Tharman said this would improve with each successive cohort, as educational profiles improve and lifetime incomes rise.
He said among the young Singaporeans starting to work, about 70 to 80 per cent should be able to meet their Minimum Sum in cash, by the time they retired, adjusted for inflation, even after they have withdrawn money for a home.
He also added that the Minimum Sum is set at a level to meet the typical expenditure needs of retiree households in the lower-middle income group.
In other words, according to DPM Tharman, all would be well for the present batches of younger Singaporeans currently working now, with 70 to 80 per cent of them able to meet the Minimum Sum in about 30 years’ time when they reach 55.
The question then remains – what about the older cohorts of Singaporeans with a large percentage of them not able to meet the Minimum Sum at 55?
What is the government going to do about these groups of older Singaporeans for the next 30 years, with each cohort reaching 55 every year without sufficient monies to meet the Minimum Sum in their CPF?
Since retirement is out of the question for these older cohorts, are they supposed to work until they literally drop dead at work?
It has been reported in the media recently that more ministers are conducting constituency visits as the government is planning discussion series to hear people’s views. Perhaps the older Singaporeans who do not have enough monies in their CPF should take the opportunity to ask these ministers instead.