A member of the public Whing Yeok Leng wrote to ST Forum 2 weeks ago (29 Mar), asking the CPF Board to consider letting CPF members to defer their monthly payouts after 70 years old if they wish to.
“The CPF Retirement Sum Scheme allows CPF members to voluntarily defer the start of their payouts up to a maximum of age 70. That is of concern to me,” she said.
She said that she has a friend who turned 70 last year and was allowed to defer her monthly payout but only on appeal.
“The Central Provident Fund Board should allow members turning 70 this year to continue to defer the start of monthly payouts if they choose to do so, until such time when they need the money,” she suggested.
“It makes no financial sense to make it mandatory for such members to have to accept the monthly payouts, only for them to redeposit the money into a bank.”
She added that the interest rate earned is much lower in a bank, compared with the CPF interest of 4 per cent to 6 per cent.
MOM: CPF savings meant for retirement income
Sim Feng-Ji, Divisional Director of Income Security Policy Division of the Manpower Ministry replied on ST Forum today (9 Apr).
Mr Sim said that since Jan last year, the CPF Board started automatic payouts for members when they turned 70 years old.
“Since that announcement, the Board has received appeals from some members who, at turning 70, wished to continue retaining their savings in the CPF to enjoy above-market interest rates,” he said.
However, deferment of payouts beyond 70 years old is only granted on a case-by-case basis to members with lower balances, he said.
Mr Sim implied that those who have much more than the Full Retirement Sum in their CPF account would generally not be granted.
He added, “The CPF is designed to provide members an income in retirement, rather than serve as an alternative investment instrument.”