CPF Life plans refined from four to two
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SINGAPORE: With Singaporeans drawing down under CPF Life from January 1, 2013, the government announced further refinements to the Life plans to better cater to the needs of the people.
From four plans, CPF Life will now offer only two plans for Singaporeans to make the choices simpler.
These announcements were made by Deputy Prime Minister and Manpower Minister, Tharman Shanmugaratnam during the Committee of Supply debates on the Manpower Ministry's estimates in Parliament on Monday.
As more Singaporeans are expected to live longer, they will need more money for their retirement.
About half of Singaporeans aged 65 today are expected to live beyond 85 years of age. One-third are expected to live beyond 90 years old.
Mr Tharman said: "More and more retirees will outlive their CPF savings if they were on the Minimum Sum Scheme. CPF LIFE is therefore an important and timely evolution of the Minimum Sum Scheme."
Since the introduction of CPF Life in 2009, there has been some feedback about the plans.
Mr Tharman said: "Some think the government introduced CPF LIFE to hold on to their money for life. Actually, all it means is you get paid for life through CPF LIFE instead of for about 20 years under the minimum sum scheme. CPF LIFE does not change how much you can withdraw from CPF in cash and it does not change how your savings in other CPF accounts can be used.
"The second misconception, some people believe you end up losing your CPF savings, if you do not live long enough under this new pooled insurance. This is not the case because when you're on CPF LIFE, you leave a bequest.
"The bequest goes to your loved ones, not to other CPF members and not to the government. You get all of your capital back either through your monthly payouts or in a bequest that you leave to your family and loved ones."
As a result of the feedback received, the CPF Board said it will be combining the desired features of the LIFE Plus and Balanced Plans into a new plan called the Standard Plan.
The new Standard Plan will also be the default plan, meaning if Singaporeans do not indicate their choice of which plan they want, they would automatically be placed under the Standard Plan.
Among the desired features of this plan include comparable payouts to the Minimum Sum Scheme, the bequest feature and the flexibility to use the Retirement Account.
Giving an example of how a member would benefit from the Standard Plan, CPF Board said a member with S$90,000 at age 55 in his CPF balances would receive S$780 as a monthly payout from his draw down age for life.
The draw down age for CPF Life is from 65 years of age.
If the member were under the minimum sum scheme, he would get S$800, but only for 20 years.
The second plan which will be retained is the existing LIFE Basic plan, which would provide a choice for members who prefer a higher bequest and a lower monthly payout.
The CPF Board will however, be removing the LIFE Income Plan as this has generated very low demand, with only three per cent of LIFE participants choosing this plan.
There had also been some confusion over the non-bequest feature in this plan and any members who initially chose the Income Plan changed their minds when the nil bequest feature was explained to them.
CPF Board will no longer offer the Income Plan as an option from 2013.
CPF Board said the Standard Plan will be available from 2013 onwards and about 58,000 members who turn 55 in 2013 will be able to choose between the Standard Plan and the Basic Plan.
As for existing CPF Life members, the Board emphasised that they may remain on their existing plans which they have chosen and there is no need for them to switch.
However, policy holders who still prefer the new Standard Plan will have up to the December 31, 2013 to make the switch.
CPF Board will be sending out customised information packages in the fourth quarter of this year to help them better understand the differences between their existing plan and the new Standard Plan.
The Board emphasised that CPF LIFE provides lifelong income for Singaporeans.
It was introduced in 2009 after extensive public consultation and it applies to CPF members with a Retirement Account balances above S$40,000 at age 55.
Those with lower balances can also opt-in any time.
Between 2009 and now, CPF Board said more than 73,000 members have joined CPF LIFE and since then it has given an opportunity for the Board to better understand the needs of Singaporeans and further refine the plans.
Feedback obtained from members indicated that they generally find it difficult to choose between the four plans and they preferred a simpler scheme.
- CNA/fa/ac -
Just like previous COE categories...
below 1000cc
1001 fo 1600cc
1601 to 2000cc
2001 and above
Now left 2 categories...from 4.
(similar right ?) -
dun think i need them to take care of my money
I WANT MY MONEY BACK
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Come Pay First, Loans Invested For Eternity.
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Last time 50s get CPF,
then later 60s...
siao liao la, by the time we reach 60s, the CPF age will become 90s or 100s...
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Originally posted by ^Acid^ aka s|aO^eH~:
Last time 50s get CPF,
then later 60s...
siao liao la, by the time we reach 60s, the CPF age will become 90s or 100s...
i like your optimism. for the current generation i doubt they'll ever see their cpf. -
dun think we will be alive see our cpf money tats why hdb is getting more expensive
they are draining us HIGH n DRY
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Percentage of CPF members meeting Minimum Sum on the rise: Tharman By S Ramesh | Posted: 05 March 2012 1701 hrs SINGAPORE: The percentage of active CPF members who meet their Minimum Sum at age 55 has been improving over the years, from 36 per cent in 2007 to 45 per cent in 2011. Speaking in Parliament, Deputy Prime Minister and Manpower Minister, Tharman Shanmugaratnam said this will improve with each successive cohort, as educational profiles improve and lifetime incomes rise. He said among those starting work now, about 70 to 80 per cent should be able to attain the current level set for the Minimum Sum in cash, by the time they retired, adjusted for inflation, even after they have withdrawn money for a home. So, he said Singapore's CPF system with current contribution rates is broadly appropriate for most of the younger generation of Singaporeans. Mr Tharman also addressed MPs concerns if the minimum sum was too high. He said the CPF aims to help Singaporeans save up enough to meet a basic level of needs in retirement. The Minimum Sum (MS) that is to be set aside at age 55 is set at a level necessary to meet the typical expenditure needs of retiree households in the lower-middle income group. It should also cover the needs of those in the 2nd quintile of income, that is between the 20th percentile and 40th percentile of households by incomes. It would therefore also cover the needs of those in the lower, first quintile. For middle-income households, while their spending in retirement is usually higher, the CPF will still form an important part of retirement savings, said DPM Tharman. He however, explained that the minimum sum is not adequate to support the expected needs of those in higher-income households, and was not designed for that purpose. Those in higher-income households would have private savings outside of the CPF to tap on. Mr Tharman said: "If the CPF had to support those needs, we would need much higher contribution rates and a much higher Minimum Sum. It would be excessive for those in the lower-half of incomes, and also mean less take-home pay to meet their day-to-day expenditures." Going forward, Mr Tharman said one of the ministry's tasks is to ensure that most low-wage workers are in the CPF system. If they are in casual jobs and are not receiving CPF from their employers as they should, they would lose out on the Workfare Income Supplement and other government top-ups to their CPF from time to time. Mr Tharman said the ministry is stepping up its enforcement and promotion efforts to ensure compliance with the CPF Act for low wage workers. -CNA/ac
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Originally posted by dragg:
i like your optimism. for the current generation i doubt they'll ever see their cpf.Who will use their cash money to buy their home when they have money in the CPF?
They already seen their CPF.
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Why not change the options to:
Take back all CPF at age 55 or at age 90?
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The 55 year old part already done.
The first batch of CPF withdrawee, took out all the money, everything.
Some put it to good use, like depositing in fix deposit, some invested in shares and others, some speculated in various investments, and there are also some who went to set up a second home in Thailand, at that time Batam wasn't developed yet.. The last group came back penniless, I mean without any money, not without any penis.
A one term minister Howe Yoong Chong was task to look into how to prevent fiasco with the CPF money and to change the withdrawl age to 60. He couldn't do it, because he was too honest. He is the kind of guy who calls a spade a spade. The withdrawal age is still 55, but only for a partial withdrawl. The rest is held just in case you have a long life.
I doubt it will be 90, because there is much disquite trying to change from 55 to 60 yo.
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Originally posted by mancha:
Come Pay First, Loans Invested For Eternity.
Wah, you damn creative.
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Originally posted by mancha:
The 55 year old part already done.
The first batch of CPF withdrawee, took out all the money, everything.
Some put it to good use, like depositing in fix deposit, some invested in shares and others, some speculated in various investments, and there are also some who went to set up a second home in Thailand, at that time Batam wasn't developed yet.. The last group came back penniless, I mean without any money, not without any penis.
A one term minister Howe Yoong Chong was task to look into how to prevent fiasco with the CPF money and to change the withdrawl age to 60. He couldn't do it, because he was too honest. He is the kind of guy who calls a spade a spade. The withdrawal age is still 55, but only for a partial withdrawl. The rest is held just in case you have a long life.
I doubt it will be 90, because there is much disquite trying to change from 55 to 60 yo.
We just want all of our cpf money when we turn 55.
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By the way, our official retirement age is now 62 or 65 ?
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I heard payout is lower with this 2 options.
Anybody knows ?
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Nobody knows?
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Originally posted by mancha:
The 55 year old part already done.
The first batch of CPF withdrawee, took out all the money, everything.
Some put it to good use, like depositing in fix deposit, some invested in shares and others, some speculated in various investments, and there are also some who went to set up a second home in Thailand, at that time Batam wasn't developed yet.. The last group came back penniless, I mean without any money, not without any penis.
A one term minister Howe Yoong Chong was task to look into how to prevent fiasco with the CPF money and to change the withdrawl age to 60. He couldn't do it, because he was too honest. He is the kind of guy who calls a spade a spade. The withdrawal age is still 55, but only for a partial withdrawl. The rest is held just in case you have a long life.
I doubt it will be 90, because there is much disquite trying to change from 55 to 60 yo.
Why not 90?
If they can change from 55 to 65, then 90 is possible.
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guarantee give me money forever is ok
but i want to know how much exactly i'm getting with my CPF trade-in
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Originally posted by TehJarVu:
guarantee give me money forever is ok
but i want to know how much exactly i'm getting with my CPF trade-in
No guarantee.
I heard the amount could be a few dollars a month even.
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not what i have understood from 1st post's official announcement
altho there's no full picture
but it's also not what your cute remarks suggest
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I blabber nonsense.
Who believes me?
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i gave feedback to cpf
that they should have another calculator
for us to key in our cpf amount, salary, bonus and expected annual increment (and not our savings)
and we also indicate the choice of our CPF Life (ie. standard or basic)and then the calculator tells us how much cpf will give us every month when we retire, based on projection
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right now the existing calculator in their website
let you indicate what amount you need every month when you retire
and they calculate for you to see if you will have enough money for that, or you will have a deficit, or you will have a surplus, by the time you retire
by adding all the amounts mentioned in my previous post, together with your savings amount
minus all your loans, medishield etcalthough that calculator is good
they also need to tell me how much they will give me every month when i retire, with my CPF trade-in
and then i will know how much more i need (or don't need) to have in my savings
that's why they need to have another calculator to calculate that, as mentioned in my post above
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I heard there is an admin fee also for managing this annuity.
Somebody asked about this in the papers before but could not get a straight answer.