Govt will match cash top-ups of up to $600 a year in their Retirement Account for 5 years from 2021 to 2025
By Sue-Ann Tan, The Straits Times, 7 Jan 2021
Thousands of people are set to get matching sums of up to $600 a year to top up their Central Provident Fund (CPF) Retirement Account, under a new scheme which kicks off this year.
The move to help more older CPF members attain the Basic Retirement Sum and provide them with retirement adequacy comes through the Matched Retirement Savings Scheme, which will benefit some 440,000 people. They account for about 53 per cent of CPF members aged between 55 and 70, said the CPF Board yesterday.
The scheme allows anyone, including family members, employers or members of the community, to make top-ups to a person's Retirement Account. Each dollar of cash top-up will be matched by the Government for the next five years, capped at $600 per year.
Top-ups can be made on the CPF website or mobile app. They also do not have to be made in a lump sum. This means that those who make small and regular top-ups throughout the year using Giro can receive the matching grant.
CPF Board chief executive Augustin Lee said: "About half of CPF members turning 55 today have yet to attain the Basic Retirement Sum. This matching grant by the Government will encourage them to save more with CPF.
"There's no better savings interest rate than what CPF pays now. We hope their loved ones and the wider community can also pitch in. Even small amounts saved consistently can go a long way in securing CPF members' retirement needs."
Those who are eligible for the scheme must be between 55 and 70 years old, and have less than the Basic Retirement Sum of $93,000 this year in their Retirement Account.
Other criteria include average monthly income, annual value of their residence, and property ownership.
Eligible members will be notified by the CPF Board this month. They can also check their eligibility on the CPF website.
Ms Selena Ling, OCBC Bank's head of treasury research and strategy, said: "Retirement adequacy concerns are increasingly pertinent for an ageing population like Singapore's... While current inflationary pressures are mild due to the pandemic, nevertheless, inflation levels are expected to return to positive territory this year and Singaporeans are also living longer."
Associate Professor Lawrence Loh from the National University of Singapore Business School added: "The matching incentive will help develop a habit of augmenting the retirement funds early in the CPF contributor's life."
The CPF Board is also partnering grassroots leaders to encourage the community to build up the retirement savings of the vulnerable.
Donors from Bukit Timah pitched in to help 100 residents, with the first batch of top-ups made yesterday.
Ms Sim Ann, adviser to Bukit Timah grassroots organisations, said: "Not everyone might have the cash to do the top-up. This is the reason why I feel there is a part for kind strangers to play in this process."
Ms Sim, who is also Senior Minister of State for Communications and Information, and National Development, made a top-up to the account of Madam Salmiah, a 62-year-old hawker.
Another beneficiary, Mr Lau Eng Kwee, 67, stopped work as a hawker in 2019 due to cancer. He has to support two adult children with learning disabilities and his wife. He said: "My family depends on me so these CPF payouts are useful in helping me to go on."