The CPF Advisory Panel will submit its first findings to the Government by February 2015. The findings will touch on issues such as the Minimum Sum, lump sum withdrawal and payouts
By Alice Chia, Channel NewsAsia, 3 Jan 2015
By Alice Chia, Channel NewsAsia, 3 Jan 2015
Panel chair and National University of Singapore president, Professor Tan Chorh Chuan, shared this on Saturday (Jan 3) with the media, on the sidelines of a focus group discussion.
Insufficient funds for retirement and lack of flexibility when it comes to using CPF monies - these were some of the concerns voiced by participants at a discussion on how to enhance the CPF system.
Part-time volunteer Panny Lam, 46, a participant at the focus group discussion, said: "What we prefer is more flexibility in our futures as well, because we are not reliant on children -you need some money to (start a) small business or some investment as well."
Currently, a Minimum Sum of S$155,000 is set aside for CPF members who turn 55 from July 2014 to June 2015. When the member reaches 65, there is a monthly payout of about S$1,200. In July 2015, the Minimum Sum amount will be adjusted to S$161,000.
About 40 people between the age of 40 and 50 attended the discussion, which was conducted in Mandarin. They are from lower- and middle-income households.
This is the eighth focus group discussion since the CPF Advisory Panel was set up in September 2014. So far, around 350 people have attended the discussions.
Professor Tan said: “The focus group discussions have been very useful, because they reflect a very diverse set of views, interests and concerns, and we're trying to factor this in and find a way to balance all the different requirements."Professor Tan said one of his observations from the discussions is that many people do not fully understand all aspects of CPF. He said: “That will be a very important aspect of the work of the panel, in that, first as a general awareness of CPF, how it works, how it supports retirement.
"And then there's the more specific information at different points in time when we make decisions about buying houses, about planning for retirement - we need more specific information about how it applies to the individual, so that we can help to plan.
"This will be a very important part of CPF recommendations that we will make because in the end, it's got to be a personal effort to plan for retirement, and CPF is a very important aspect of that, and timely and relevant information will be very useful to help individuals to plan for their retirement."
But he noted that participants took a practical approach to the issues, and had a good understanding of some of the trade-offs. For example, participants understood that if they were to withdraw a large sum from their CPF accounts at 65, then they would have lower monthly payouts.
Professor Tan also shared that many participants felt there should be a limit on the withdrawal to protect their longer-term payouts.
The discussion also revealed concerns on low CPF balances, especially for women who were not working, or those working part-time. But Professor Tan said he was heartened to hear that children are helping to top up their parents' CPF accounts.
Professor Tan also gave the assurance that the panel will try to keep the CPF system simple. He said: "We want to try and keep the CPF system simple, in order not to make it so hard to understand. So, we need to balance the need to provide more flexibility to cater for different needs, but at the same time, try to simplify the system further, so that it's easier to understand, and it's also easier to implement."
The panel will submit its first findings to the Government by February 2015. They will touch on issues such as the Minimum Sum, lump sum withdrawal and payouts. The issue of alternative investments and annuities is expected to take longer to study and those recommendations should be out by the middle of 2015.
CPF scheme must be flexible and simple, says advisory panel
By Priscilla Goy, The Sunday Times, 4 Jan 2015
By Priscilla Goy, The Sunday Times, 4 Jan 2015
A balance must be struck between making the Central Provident Fund (CPF) scheme flexible and keeping it simple, says the panel looking at ways to improve the compulsory savings plan for working Singaporeans and permanent residents.
"We need to... provide more flexibility to cater to different needs," said Professor Tan Chorh Chuan, chairman of the CPF advisory panel. "But at the same time, we need to try to simplify the system further so that it's easier to understand and easier to implement."
He was speaking to reporters yesterday after a focus group discussion with about 40 beneficiaries and volunteers from the Chinese Development Assistance Council (CDAC).
This is the eighth such discussion organised by the 13-member advisory panel, which was formed to study potential changes to the CPF system. About 350 people have taken part since the sessions started in November last year.
At yesterday's session, participants discussed the conditions under which people could be allowed to withdraw more CPF savings as a lump sum at the age of 65, on top of receiving monthly payouts.
Most said there should be a cap on the amount that can be withdrawn, so that there is enough left over to support them later on.
Currently, those who turn 55 can withdraw their CPF savings after setting aside the Minimum Sum, which is now $155,000. They get monthly payouts from age 65. Those who cannot meet the Minimum Sum can withdraw only $5,000.
Prof Tan, who is also president of the National University of Singapore, said participants were "very practical... and have a very good understanding of the trade-offs".
Most of them, for instance, were willing to accept lower monthly payouts if they withdrew more of their CPF savings, thus leaving less money in their accounts.
He also noted that many participants preferred the option of having payouts which may start lower but increase over time, as they understood that the value of a "flat payout" would fall with rising costs of living.
CDAC executive director Goh Chim Khim said that conducting the session in Mandarin, a language that the Chinese are familiar with, had helped to give participants a better understanding of the CPF scheme.
"With discussions held in groups, there is also some reinforcement of what they have learnt," Mr Goh said.
One participant, part-time waitress Ng Yoke Kwan, 51, said in Mandarin: "I heard contradictory information from other people previously, but now I know more about the CPF scheme.
"I've also given more thought to planning for my retirement."
The panel is expected to submit its preliminary recommendations to the Government this month.