Since 15 January, you might have seen a post circulating on Facebook and WhatsApp that the Government had quietly shifted the Central Provident Fund (CPF) Retirement Payout age from 65 to 70.
However, the message circulating online is false and the payout eligibility age for the Retirement Sum Scheme is indeed 65 for those born from 1954 onwards, and this had not changed since it was announced in 2007, said CPF Board on Saturday (19 January).
The confusion happened due to a letter CPF sent to its members who are approaching their eligible payout age.
A sentence in the letter mentioned that “no action is required if you wish to start your payouts at age 70”, which gave a wrong impression to some people that the payout age was moved to 70.
However, a CPF Board spokesman said the letter was sent to CPF members to inform them that they can start their monthly payout by completing an application form with their bank account details or 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.
But, if CPF members don’t take any action, Retirement Sum Scheme payouts will automatically start at the age of 70.
According to the spokesperson, the CPF Act was amended in 2016 that allowed this automatic payout arrangement, which took effect in January 2018.
Some members did not even start their monthly payouts even after age 70 because they did not apply to start their Retirement Sum Scheme payments, said CPF Board.
The automatic starting payout at 70 “helps to simplify the activation process for members so they can start to enjoy a retirement income from their CPF savings,” noted the spokesman.
However, after hearing CPF Board’s clarification, many netizens are still skeptical because they find CPF’s explanation misleading and the rules are too complicated.
Facebook user Jeyaraj Krishnasamy finds CPF’s explanation bizarre because if they want things to be seamless, then payout should be made automatic at 65, and only those who wants to benefit from the higher interest rates should be allowed to apply to start payouts from 70.
On the other hand, Paris Snowfoot noted that this confusion happened because CPF keep changing its rules whenever it wants. He further mentioned that “We have lost the trust in you CPF Board. This is our money, not yours.”
Kum Fai Wong wrote, “There is no misunderstanding of the fact that the default age for payout is 70. If you wish to have it at 65 then you have to fill up a form. Please make the defaulted payout at 65 instead of 70 if CPF wants to prove their honesty.”