SINGAPORE - Members of Parliament yesterday called for better public education on the Central Provident Fund (CPF) scheme and how members' savings can help them meet their retirement needs.
The call was made by both People's Action Party and Workers' Party MPs who spoke on the first day of the Budget debate. They noted that many residents held misconceptions about the national social security system, which aims to ensure workers can look after themselves in old age.
Suggestions ranged from inviting CPF members to one-on-one sessions with CPF Board officers as they approach the age of 55 and have to decide how they want to draw on their savings, to providing better explanations about the scheme for workers and new entrants to the workforce.
These views come as a CPF Advisory Panel last month recommended letting people withdraw up to 20 per cent of their retirement savings at the age of 65, and offer an option for those who want to go beyond the Basic and Full Retirement Sums to pick an Enhanced Retirement Sum.
The Budget will also see older workers aged 50 to 65 gaining from enhanced CPF contribution rates and extra CPF interest for all CPF members aged 55 and above, among other changes.
Ms Foo Mee Har (West Coast GRC) said recent enhancements to the scheme should ease anxiety about retirement adequacy, but asked: "Will the man in the street comprehend the scheme well enough to fully leverage its benefits?"
"From dialogues and feedback, I am afraid there is still much to be done to debunk persistent myths about CPF," she said, calling on the Government to launch a comprehensive education campaign to help Singaporeans "reset" their understanding of how CPF works.
These myths include a belief that CPF returns are poor and members can get better returns from investments elsewhere, and that it is better to minimise the amount kept in CPF so members can gain easy access to their retirement savings.
She said the Government should explore more incentives for people to keep funds in CPF and allow them the flexibility to withdraw part of their savings as and when they need to, after they reach the age of 65.
Mr Gan Thiam Poh (Pasir Ris-Punggol GRC) cited a Facebook post by Speaker of Parliament Halimah Yacob on Monday, where she recounted a meeting with two workers who had not heard of the enhancements to the CPF interest rates announced in the Budget speech last week.
"We need to do a lot more work in communicating the changes as it is still not well understood on the ground," Madam Halimah wrote.
Non-Constituency MP Gerald Giam of the Workers' Party suggested that every CPF member be invited to meet a CPF Board officer in person a few months before turning 55, to get an explanation on his savings, and how they can be managed.
He also said the age at which CPF members can start receiving monthly annuity payouts - 64 this year and 65 from 2018 onwards - should be lowered to 60, as some members may have a genuine need to start receiving payouts from an earlier age.
"They may have been retrenched and, because of a skills mismatch or age discrimination, may not be able to secure another job. Or they may be labourers who are simply too old to do manual work," he said.
This article was first published on March 4, 2015.
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