Participants at NSP forum raise concerns over CPF rates

About 35 people attended a forum organised by the National Solidarity Party (NSP) to discuss the Central Provident Fund (CPF) scheme, with several participants raising concerns over CPF interest rates and increases in the Minimum Sum.

At least five participants expressed misgivings over the interest rate of 4 per cent per annum for Special, Medisave and Retirement account savings, given higher inflation in recent years.

Among them was financial planner Eddy Chan, 54, who said that while the CPF scheme is meant to support older Singaporeans in retirement, the interest rate has "caused discomfort for all of us".

He added: "The Government should not increase the Minimum Sum required without increasing the interest rates."

The Minimum Sum is the amount CPF members must set aside in their CPF Ordinary and Special accounts on turning 55 years old for their retirement needs. It will increase from $148,000 to $155,000 from July 1.

The forum was organised by the NSP to seek the views of CPF account holders, said NSP secretary-general Jeannette Chong-Aruldoss.

"We wanted to hear from the man in the street and their perspectives, beyond just the experts and online commentators," she said.

It took place at the NSP headquarters in Jalan Besar. Mrs Chong-Aruldoss first took participants through changes in the Minimum Sum scheme since its introduction in 1987.

When the discussion was opened to the floor, participants debated if increases in the Minimum Sum should be compulsory.

Said Madam Wong Souk Yee: "I topped up my Minimum Sum because I reckoned the Government, compared to banks, can give me a better chance of more secure returns when I'm 65. But I do not agree that it has to be compulsory... It should be optional for those who want to have an annuity, then (let them) have a choice."

Others asked for clarification on monthly payouts from their CPF accounts, saying the scheme was "very complex" and difficult to understand.

In all, more than 20 questions and comments were raised at the two-hour-long forum.

Summing up the discussion, moderator and NSP member Ravi Philemon said "more flexibility should be given" to Singaporeans in deciding how to use their retirement funds in their later years.

He also highlighted how several participants had questioned the need for increases in the Minimum Sum despite there not being a poverty baseline or a minimum wage in Singapore.

"With no baseline or a minimum wage, there's not much clarity on how much an older citizen will need for his retirement needs," he said.

Also present at the forum was blogger Roy Ngerng, who is being sued by Prime Minister Lee Hsien Loong for alleging that Mr Lee misappropriated CPF monies.

In a post on its website on Monday, the NSP said it was rejected by managers of two commercial venues who had no issue with an event by a political party but felt uncomfortable that the subject of discussion was CPF monies.

"Clearly, outside the MIW umbrella, public discussion of our CPF monies and the CPF Minimum Sum scheme has become taboo," Mrs Chong-Aruldoss wrote, using the abbreviation MIW (Men in White) to refer to People's Action Party members. She said the rejection from venue providers "is proof that the Prime Minister's lawsuit against Roy Ngerng has instilled fear in the public and has caused a chilling effect on public discourse".

maryamm@sph.com.sg

This article was first published on June 5, 2014.
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