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CPF Board: Automatic payout at age 70 “helps to simplify the activation process for members”

CPF Board has come out to strongly deny that the government had quietly shifted the “retirement payout age” from 65 to 70, in a media report today (20 Jan).

CPF Board’s denial came in response to a recent message circulating online. Someone had posted a picture of a mail he received from CPF Board, notifying him that if would like to receive his CPF payouts starting at 70 years old, he did not have to do anything. However, if he intends to receive his payouts starting at 65, he would still need to inform the CPF Board.

CPF Board told the media that the payout eligibility age for the Retirement Sum Scheme is 65 for those born from 1954 onwards and this has not changed since it was announced in 2007. With regard to the mail posted online, a CPF Board spokesman clarified that the letter was sent to CPF members to inform them that they can start their monthly payouts by completing an application form with their bank account details or to apply online.

“They can apply to start their payouts any time between the ages of 65 and 70. If they do not wish to start payouts before age 70, they need not do anything” and “members who defer the start of their payouts will benefit from getting more retirement savings with the attractive interest that they earn on their CPF savings,” said the spokesman.

The spokesman also said that the CPF Act was amended in 2016 to allow for this automatic payout arrangement, which took effect in Jan 2018. The automatic starting of payouts at age 70 “helps to simplify the activation process for members so they can start to enjoy a retirement income from their CPF savings,” the spokesman added.

However, the spokesman avoided mentioning why the government did not consider starting the automatic payout arrangement at age 65 instead, since this is the official minimum age when a member is eligible for CPF payouts.

Indeed, retiree Johnny Wong, 66, interviewed by the media said that payouts should be automatic when an individual turns 65 years old, and he can have the choice to opt out if he does not want the payout yet, Mr Wong added. In other words, change the default to the other way.

“There may be some who are illiterate or who may not understand how the current scheme works,” Mr Wong said.

CPF Board also posted on its Facebook denying that the government had quietly shifted the “retirement payout age” from 65 to 70. It presented its “facts” on Facebook and asked users to share its post presumably to counter “online rumours”.

“You may have recently come across social media posts and messages that claim that the Government has quietly shifted the ‘retirement payout age’ to 70 for the Retirement Sum Scheme (RSS). This is not true and here are the facts. Do share this with your friends and loved ones,” CPF Board posted on its Facebook page.

However CPF Board wants to present its “facts”, the fact remains that CPF Board only arranges for automatic payout at age 70 and not 65. If a member wants his payouts to start at 65, he must inform CPF Board to do so, something which Mr Wong has highlighted that many illiterate elderly may not know.