- The Straits Times
The majority of Singapore’s elderly are currently on the CPF Retirement Sum Scheme (RSS), which covers anyone turning 65 before 2030.
The Government plans to reduce the maximum payout age for this scheme to 90, after feedback that the 95-year maximum was too old.
RSS payouts “could have been slightly higher” for members with money remaining in their Retirement Accounts when they passed on, Manpower Minister Josphine Teo said.
Separately, the Government is testing out a scheme to let self-employed workers pay MediSave contributions throughout the year to cope with irregular income.
Starting from January 1 next year, an estimated 60,000 elderly Singaporeans on the CPF Retirement Sum Scheme (RSS) will get higher monthly CPF payouts – but for fewer years, Manpower Minister Josphine Teo announced in Parliament on Monday (Nov 4).
The ministry plans to lower the maximum payout age from 95 to 90 on the RSS, which is the main CPF retirement scheme here.
Those with under S$60,000 in their CPF retirement account six months before their 65th birthday fall under RSS.
The payouts from RSS will cover 20 years of a person’s retirement (e.g 65 to 85 years), but thanks to additional Government interest, can result in extra payouts until age 95.
Based on feedback, Singaporeans found this age too old, the minster said, adding that 80 per cent of people on the scheme would likely pass away before that.
“In other words, only 1 in 5 members is expected to outlive his RSS payout,” she said. “While this approach is fundamentally sound, it does mean that for the members who had remaining balances in their Retirement Accounts when they passed on, their RSS payouts could have been slightly higher.”
Reducing the maximum payout age to 90 years old would still cover over 65 per cent of RSS members, minister Teo added.
She also said that those under 80 who want payouts to last as long as they live can opt in to the CPF Life scheme, which is compulsory for those turning 65 from 2030 onward.
Separately, the minister said that 130,000 self-employed workers here did not pay the full amount of their yearly MediSave contributions.
Self-employed workers include photographers, bloggers, influencers, videographers, instructors, coaches, insurance agents and property agents.
To address issues of irregular income, the Government is testing out an optional scheme that will let 6,000 self-employed workers providing Government-related services pay smaller MediSave amounts throughout the year, instead of all at once, the minister said.
She added that the Government was mulling matching their MediSave contributions if they took part.
The move was welcomed by freelancer associations and NTUC, Teo said, adding that private sector agencies had also indicated interest.