CPF Minimum Sum to be raised to S$139,000
Updated 12:13 PM May 30, 2012
SINGAPORE - Central Provident Fund (CPF) members who turn 55 between July this year and Jun 30 next year have to set aside a Minimum Sum (MS) of S$139,000, higher than the S$131,000 last year.
The CPF Board and Ministry of Manpower (MOM) said in a statement today that the MS has been adjusted over the years to account for inflation, longer life expectancies and Singaporeans' rising expectations of their quality of life after retirement.
They said that since 2004, the MS has been increased by S$4,000 each year to reach S$120,000 in 2013, as recommended by the Economic Review Committee in 2003.
The actual increases in MS are also adjusted for inflation each year, and therefore have to be more than S$4,000 a year since the increase must account for inflation between 2003 and the time the increase is made.
The S$120,000 target in 2003 dollars is also adjusted for inflation between 2003 and the time the target is met, to preserves the real value of the target.
Based on inflation last year and incorporating the annual S$4,000 (in 2003 dollars) adjustment, the increase in MS due this year would have been S$12,000, which is relatively large compared with previous years.
In response to concerns over large increases in MS in any given year, the CPF Board and the MOM said they will spread out the remaining MS increases needed to reach the S$120,000 target over a longer period of four years. This means they will reach the target in 2015, instead of 2013.
With this change, the 2012 MS will be S$139,000, an increase of 6 per cent, or S$8,000, over last year. Without the change, the MS this year would have been S$143,000, or a 9-per cent increase, over last year.
Changes will also be made for contributions to the Medisave Minimum Sum (MMS) to help Singaporeans plan for their long-term healthcare needs.
From Jul 1, the MMS will be raised to S$38,500, from S$36,000 - an increase of 7 per cent.
The MMS is the amount that a person who turns 55 needs to set aside for hospitalisation expenses in subsidised Class B2 and C wards, subsidised outpatient treatment for selected chronic conditions and basic MediShield and ElderShield premiums.
Members will be able to withdraw their Medisave savings in excess of the MMS at or after age 55.
Another change - also from July - is in the Medisave Contribution Ceiling (MCC).
This is the maximum balance a member may have in his Medisave Account, and it is set at S$5,000 above MMS and would be increased correspondingly to S$43,500, from S$41,000.
Any Medisave contribution in excess of the prevailing MCC will be transferred to the Special Account if the member is below age 55, or to his Retirement Account if he is above age 55 and has a MS shortfall. CHANNEL NEWSASIA
Updated 12:13 PM May 30, 2012
SINGAPORE - Central Provident Fund (CPF) members who turn 55 between July this year and Jun 30 next year have to set aside a Minimum Sum (MS) of S$139,000, higher than the S$131,000 last year.
The CPF Board and Ministry of Manpower (MOM) said in a statement today that the MS has been adjusted over the years to account for inflation, longer life expectancies and Singaporeans' rising expectations of their quality of life after retirement.
They said that since 2004, the MS has been increased by S$4,000 each year to reach S$120,000 in 2013, as recommended by the Economic Review Committee in 2003.
The actual increases in MS are also adjusted for inflation each year, and therefore have to be more than S$4,000 a year since the increase must account for inflation between 2003 and the time the increase is made.
The S$120,000 target in 2003 dollars is also adjusted for inflation between 2003 and the time the target is met, to preserves the real value of the target.
Based on inflation last year and incorporating the annual S$4,000 (in 2003 dollars) adjustment, the increase in MS due this year would have been S$12,000, which is relatively large compared with previous years.
In response to concerns over large increases in MS in any given year, the CPF Board and the MOM said they will spread out the remaining MS increases needed to reach the S$120,000 target over a longer period of four years. This means they will reach the target in 2015, instead of 2013.
With this change, the 2012 MS will be S$139,000, an increase of 6 per cent, or S$8,000, over last year. Without the change, the MS this year would have been S$143,000, or a 9-per cent increase, over last year.
Changes will also be made for contributions to the Medisave Minimum Sum (MMS) to help Singaporeans plan for their long-term healthcare needs.
From Jul 1, the MMS will be raised to S$38,500, from S$36,000 - an increase of 7 per cent.
The MMS is the amount that a person who turns 55 needs to set aside for hospitalisation expenses in subsidised Class B2 and C wards, subsidised outpatient treatment for selected chronic conditions and basic MediShield and ElderShield premiums.
Members will be able to withdraw their Medisave savings in excess of the MMS at or after age 55.
Another change - also from July - is in the Medisave Contribution Ceiling (MCC).
This is the maximum balance a member may have in his Medisave Account, and it is set at S$5,000 above MMS and would be increased correspondingly to S$43,500, from S$41,000.
Any Medisave contribution in excess of the prevailing MCC will be transferred to the Special Account if the member is below age 55, or to his Retirement Account if he is above age 55 and has a MS shortfall. CHANNEL NEWSASIA
