THE Manpower Minister put up a stout defence of the Central Provident Fund (CPF) system yesterday, amid criticisms online of Singapore's national pension fund.
Without naming anyone, Mr Tan Chuan-Jin hit out at those who labelled the system a scam and who described the Minimum Sum as a ruse to stop Singaporeans from withdrawing their savings.
Such allegations are untrue, he said, highlighting that many Singaporeans are already using their CPF monies for properties and health care.
"Money in your CPF account is your money," he said, adding: "Many of us are already using our CPF monies to fund expenses that would otherwise have come from our disposable income."
He paid extra attention to the CPF Minimum Sum and explained why it has been increasing annually since 2003.
He pointed out that Singaporeans are living longer and, with inflation, the $120,000 target set in 2003 translates to a higher figure today.
"The Minimum Sum is increasing because we are living longer so we need to spread out our payouts," he said.
The Minimum Sum is now $148,000 and it increases to $155,000 from July 1. It is set to go up again in July next year and the amount has not been determined.
The Government has not projected any increases after 2015.
In his blog, Mr Tan also sought to dispel misperceptions about the Minimum Sum.
While those who reach 55 can withdraw a portion of their CPF savings after setting aside the Minimum Sum, those who do not meet it will not have to top up the shortfall in cash, he said.
The Government will help these vulnerable Singaporeans, he promised.
Half of CPF members are able to meet the Minimum Sum now, compared with a third five years ago. And the proportion will jump to between 70 per cent and 80 per cent over time, said Mr Tan, pointing to a local university study.
Overall, the CPF system is a good and fair one that is "a more sustainable system than most other retirement schemes... (and) CPF funds are absolutely safe", he said.
His strongly worded blog post came less than a week after the Ministry of Manpower pledged in its addendum to the President's Address that it "will enhance retirement adequacy to give greater assurance and peace of mind to all Singaporeans", and on the back of questions online on the CPF system.
Human resource expert David Leong said it is timely that the Government came out strongly to defend the CPF system.
"It is important to assure Singaporeans that the CPF system is a sound one," he said. "It is a key institution which affects all Singaporeans."
He added: "There cannot be any unanswered questions on the robustness of the system because it affects public confidence."
As Mr Tan said: "Let me state that the CPF is put in place to help Singaporeans have peace of mind when it comes to their retirement years.
"With increasing longevity, it has become even more important to help Singaporeans sustain their retirement adequacy for longer."
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