SINGAPORE — The Singapore government will increase the minimum monthly payout for the Retirement Sum Scheme (RSS) from S$250 to S$350 starting 1 June 2023, as part of the effort to boost retirement adequacy.
The RSS provides monthly payouts to seniors until their retirement savings run out, and it is one of two retirement schemes under the Central Provident Fund (CPF) Board.
Seniors on the RSS can opt to join CPF Life anytime before turning 80 to receive lifelong payouts. The CPF Life is an automatic enrollment scheme for those with at least SGD 60,000 in their CPF Retirement Account once they turn 65 and provides lifelong monthly payouts in retirement.
In addition, the government will also increase CPF contribution rates for Singaporeans and permanent residents aged above 55 to 70 by between 1 and 1.5 percentage points, starting 1 January 2024.
Total CPF contribution rates will go up by 1.5 percentage points to 31 per cent for those aged above 55 to 60 and 22 per cent for those aged above 60 to 65.
Meanwhile, total CPF contribution rates for workers aged above 65 to 70 will be increased by 1 percentage point to 16.5 per cent.
The increases were first announced in 2019 and are being implemented gradually until around 2030. The upcoming increase will be fully allocated to the CPF Special Account to help senior workers save more for retirement.
To mitigate the rise in business costs due to the increase, the government will provide employers with a one-year offset that is equivalent to half of the 2024 increase in employer contribution rates for every Singaporean and permanent resident they employ aged above 55 to 70.
The changes were among a slew of initiatives unveiled at the Budget 2023, aimed at addressing the needs of Singapore’s ageing population. By 2030, one in four Singaporeans will be aged 65 and above.
The government has been dedicating more resources to support seniors, particularly the lower-income ones, with their long-term care and healthcare needs.
Mr Wong announced a S$500 million top-up to the ElderCare Fund to support means-tested subsidies for seniors who need home-based, centre-based, or institutional care. There will also be a S$1.5 billion top-up to MediFund to help those facing difficulties with their medical bills, even after subsidies.
The government is also studying how it can enhance the range of care and support options within the community, as part of the Forward Singapore exercise, including reviewing the operating model of Active Ageing Centers and studying how to better strengthen and coordinate providers in the aged care sector.