http://therealsingapore.com/content...-when-there-too-much-red-tape-surrounding-cpf
MP for Tanjong Pagar GRC, Lily Neo posted to facebook yesterday evening that she felt “down” after her meet-the-people’s session that day.
She explained that
she felt sad because she could not help unhappy residents because of the existence of some regulations.
One of the issues she highlighted was about CPF where one elderly resident was unable to withdraw his funds due to the minimum sum requirement.
She explained that she had sent an appeal letter to CPF but they just replied that they need to stretch retirement savings to fund members’ living expenses in retirement and so there is a requirement for the minimum sum.
Currently, the minimum sum is already set at $148,000 so those without this amount in their CPF accounts at age 55 cannot withdraw whatever money they do have in CPF until the drawdown age.
The drawdown age is 63 but by 2018, this will be raised to 65. Upon turning this age, residents can receive monthly payouts from their retirement account.
This can sometimes be a problem for residents who need cash between ages 55 and 65. If they do not meet the minimum sum, despite working all their lives, they may not be able to touch any of that.
Because the retirement fund is managed by the government’s CPF board, it is impossible for citizens to get much flexibility to suit their needs. It’s another example of the government acting as a nanny and doing what they believe is ‘best’ for the citizens by forcing them to save until retirement.
The problem here is that such blanket policies do not cater to the individual needs of CPF members at all and as a result, many are left high and dry.
It’s a policy that many Singaporeans oppose saying that the government should trust the people to manage their own money. Even their own PAP MPs see it as a silly and inflexible policy which causes them sadness.
Here is Lily Neo’s facebook post in full:
Meet-the-people session tonight left me with 'down' feeling seeing unhappy residents that I could not assist due to regulations in place. One such example was that one resident tonight was unhappy with me because I could not get CPF to allow him to withdraw his savings.
According to the reply from CPF board, the minimum sum (MS) Scheme, members who turned 55 between 1 July 2005 to 30 June 2006 need to set aside MS $90,000 in their Retirement Account (RA), of which $45,000 must be in cash and the remaining $45,000 may be in the form of a property pledge. For those who turn 55 after July 2015 the MS will be $120,000.
CPF explained, in reply to my appeal letter, that the savings in the RA are meant to provide members with a regular income to meet their retirement needs from their drawdown age. In view of the aging population and longer life expectancy for Singaporeans, the RA savings need to be stretched for as long as possible as they may be the only source of funds which members can turn to for financing their living expenses in the old age.
