Govt should take lead to boost CPF returns: WP

Govt should take lead to boost CPF returns: WP

SINGAPORE -It is prudent to adjust the Central Provident Fund Minimum Sum every year to beat inflation and help Singaporeans prepare for retirement, but the burden to meet the sum should not fall solely on individuals, said Workers' Party MP Png Eng Huat (Hougang) yesterday.

Rather, the Government should help maximise CPF returns, he urged.

Joining the chorus of calls by MPs to find new ways to improve returns on CPF savings, Mr Png said the only way for people to do so now was to "work longer and harder and nothing else".

But they can also grow their CPF savings by "investing wisely", and the Government should take the lead in this as many may not have the requisite financial know-how to do so, he said.

It should also review the interest rates for the CPF Ordinary Account and Special, Medisave and Retirement Accounts, he said, noting they "had not changed for the past 15 years".

"While we want Singaporeans to work longer and harder for their retirement, it is also prudent to make our CPF savings work harder for us," he said.

He also called for the scheme to be made more flexible.

For some older workers, the CPF savings are also their "only safety nets", and not being able to use the money until they have reached the draw-down age could cause them "undue anxiety and stress", he said.

The age, at which people can withdraw all their CPF savings, has been raised over the years.

Mr Png asked for it to be lowered, and said it should not be linked to the retirement age of 62 or re-employment age of 65.

He also suggested a new CPF Life plan that will offer more flexibility, by giving a monthly payout with no bequest and having an early draw-down age of 60.

"When we are young, we need a disciplined instrument like CPF to help us save for the future.

"But when we are old, we need a more flexible instrument to help us plan for the uncertainties of ageing." he said.


This article was first published on May 30, 2014.
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