- The Straits Times
Following a viral post that falsely said the CPF age was being shifted from 65 to 70 last month, Manpower Minister Josephine Teo has admitted the CPF Board can improve the way it communicates with Singaporeans.
The Board plans to review the letters it sends to those approaching retirement age, so as to “avoid misunderstandings”.
The minister said the Board will not move the automatic CPF payout age to 65, despite suggestions that doing this will reduce confusion around CPF payout rules.
This is because by deferring payments for five years, the elderly can get payouts that are 35 per cent higher.
Another concern about starting payouts at 65 is that they will end at 85 – and most elderly are expected to live beyond that.
Following public outrage over a misinterpreted letter from the CPF Board last month, Manpower Minister Josephine Teo has admitted that the Board should improve the way it communicates with Singaporeans about their CPF payouts.
In January, a photo of a letter from the CPF Board went viral on Facebook, after people mistakenly interpreted the sentence “no action is required if you wish to start your payouts at age 70” to mean the stat board had quietly shifted Singaporeans’ CPF payout age from 65 to 70 years old.
Though the CPF Board subsequently clarified that this was false, netizens criticised it for creating a convoluted system, and sending misleadingly-phrased letters that the elderly would struggle to understand.
Referencing the issue, Minister Teo said in Parliament that the CPF Board had “much room for improvement” in the way it communicated with the public on “key issues such as starting payouts”.
She added that the Board plans to review the letters it sent to those approaching retirement age to ensure they avoid creating misunderstandings or “unnecessarily” confusing readers.
Teo said the CPF Board also plans to launch a service where elderly can speak directly to a CPF Board officer about their funds for retirement. The Board will also work with the Silver Generation Office and Social Service Offices to help activate CPF payouts for those requesting assistance.
No change to default CPF payout age
The viral post also resulted in calls for the CPF Board to change the default age for CPF payouts from the current 70 years old to 65 years old.
This is also the age Singaporeans can start receiving their retirement payouts.
Currently, those who want to receive the payouts at 65 must opt in to get them.
However, Minister Teo said the CPF Board would not change the automatic payout age, as the current arrangement gives elderly the highest interest payment.
According to the minster, CPF savings earn interest of up to 6 per cent a year (a figure “well above” market rates), and deferring CPF payouts for five years results in payouts that are 35 per cent higher.
Teo said moving the automatic CPF payout age to 65 would deprive most elderly of these benefits, particularly those whose current savings are earning a lower interest than their CPF savings.
In addition, starting payouts at age 65 means elderly run the risk of outliving their payouts, which will run for 20 years.
Over half of Singaporeans aged 65 are expected to live beyond 85, the minister said.
She added that this meant a major portion of elderly alive at 85 could end up with “no CPF payouts at all” – which would be “a major cause for concern”.