The Central Provident Fund Minimum Sum for Singaporeans who turn 55 between July 1 this year and June 30 next year will be raised to $155,000, up from $148,000 ("CPF Minimum Sum to be raised to $155,000"; May 9). The reason for the increase is to maintain its real value over time after accounting for inflation.
However, we have seen how our inflation is largely driven by the rising cost of car ownership.
I hope the CPF Board, in its yearly assessment of inflation for calculating the Minimum Sum, will consider taking the cost of car ownership and private home prices out of the equation, as these two items have the potential to skew inflation figures.
Inflation should be calculated in a different manner for assessing the Minimum Sum. Perhaps the CPF Board could share with us how it calculates inflation and arrives at the recommended Minimum Sum, so as to dispel any lingering public dissatisfaction.
This article was first published on May 22, 2014.
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