Central Provident Fund (CPF) members who have already picked their CPF Life annuity plan can now change their minds - but only on a case-by-case basis, the Ministry of Manpower (MOM) has clarified to The Straits Times.
The CPF Board is making the concession for this group because from next year, members will no longer have to decide at the age of 55 which of two CPF Life annuity plans they want.
They can delay the decision until they want to start receiving the monthly payouts - which can be any time from age 65 onwards.
The move to defer the decision, announced at the debate on the ministry's annual budget two weeks ago, gives flexibility to future cohorts of CPF members. But those who have already made their choices are now locked in.
To switch plans, these members must cancel their existing plan or "de-annuitise their savings already committed to CPF Life", according to a spokesman for the ministry, which oversees the CPF Board.
They will then have to rejoin the annuity scheme at age 65.
Previously, CPF members had to pick a plan within six months of their 55th birthday with only a 30-day grace period to change their minds.
When CPF Life annuity plans were introduced in 2009, there were four plans with different amounts of monthly payouts and bequests.
They were simplified to two in 2013 when the scheme became compulsory.
While the option of changing the CPF Life plans is on the table, the ministry discourages members from doing so, pointing out that those who have already committed their savings to CPF Life are not worse off.
"The additional interest tiers that apply to the CPF Retirement Account also apply to monies in the CPF Life fund," the ministry said.
From next year, an extra 1 per cent interest will be applied to the first $30,000 of CPF savings for those aged 55 and above, on top of the existing 1 per cent extra interest on the first $60,000 of all savings.
This means that the first $30,000 in savings of a CPF member aged 55 and above earns up to 6 per cent interest, even if they have already committed the amount to CPF Life.
The move to let members switch annuity plans has drawn support.
Mr Martin Gabriel, who is a human resource consultant with HRMatters21, said it will remove the perception of disparity between the different cohorts of CPF members.
"Some may feel that they will end up being worse off if there were no adjustments made (to the policy)," he said.
Mr Zainudin Nordin, who chairs the Government Parliamentary Committee for Manpower, said: "It shows that the CPF Board is flexible and willing to listen to its members."
Retired corporate secretary Winnie Tan also backed the move.
The 61-year-old picked a CPF Life plan in 2012, but wanted to change her mind last year because she felt she was not given the right advice by the CPF Board.
The CPF Board rejected her appeals four times last year, but there was a change of heart after the Budget debate and she will meet the CPF Board this week to change her annuity plan.
She said: "The CPF Board needs to tell members all the details of the plan and give them the numbers, so that they can make the right decisions for themselves."
This article was first published on March 23, 2015.
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