Not many workers will take advantage of the new change to the Central Provident Fund Board (CPF) Act, say experts and legislators.
Only those in financial emergencies or those rich enough to invest their savings are likely to benefit from being able to withdraw from their CPF accounts more than once a year after they turn 55.
"I think this is going to affect very few people, those who have very little and those who have a lot and don't want to be trapped," said independent financial adviser Roy Varghese.
Parliament passed an amendment on Nov 12 to provide the CPF Board with the flexibility to assess members' appeals for additional withdrawals in excess of the minimum sum.
The minimum sum is the amount set aside in the Retirement Account. For the cohort that turns 55 between this July 1 and next June 30, this amount is $148,000. Members also have to meet the required Medisave amount, which is $38,500 from January this year. Previously, additional withdrawals were allowed only if a worker had been unemployed for a prolonged period of, say, six months.
The CPF Board would not say how many appeals it receives a year, nor how many people stand to benefit from the change. It also declined to provide examples of circumstances under which appeals might be granted.
But Acting Manpower Minister Tan Chuan-Jin said in Parliament in April that only about one in five of the cohort that turned 55 last year had balances above the minimum sum that were not withdrawn by December.
MPs say they have seen few cases of people wanting to make additional withdrawals.
Tanjong Pagar GRC representative Chia Shi-Lu said he has seen "two or three" cases in the past couple of years. Unemployment, being moved to a job with less income, or a relative needing financial help are some of the reasons brought up.
Mr Zainal Sapari (Pasir Ris-Punggol GRC) has not encountered such requests. He said the change "might not apply to low-wage workers because... they might not even meet the minimum sum".
One such worker is Madam Susie Lim, 59, who supervises a team of toilet cleaners. "When I turned 55 I had no money left (to withdraw) because my home hadn't been paid for," she said.
Observers and MPs asked for more details about the new process for assessing appeals.
Mr Zainudin Nordin (Bishan-Toa Payoh GRC) said the board should explain how it arrives at its decisions. It is a view shared by Ms Michelle Ee, director of wealth management at Financial Alliance. She said the board might approve more appeals for emergency reasons than those for investment reasons, but "the guidelines are not very clear".
She recommends that people leave their money in their CPF accounts where possible, as the interest rates tend to be better than what banks offer.
Business manager Francis Cheng, 58, has CPF monies in excess of the minimum sum, but he wants to leave them there as long as possible.
"If I were to withdraw it and put it in a deposit account, there may be more flexibility, but the interest wouldn't be as good."
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