- POSTED: 25 May 2014 21:49
- UPDATED: 26 May 2014 08:46
Manpower Minister Tan Chuan-Jin has clarified some of the misconceptions about CPF (Central Provident Fund), after allegations that the government is misusing CPF money.
SINGAPORE: Manpower Minister Tan Chuan-Jin has clarified some of the misconceptions about CPF (Central Provident Fund).
His comments, made in a blog post on Sunday, come days after allegations that the government is misusing CPF money.
"CPF is a scam", "It's how the government cheats you of your money", "And it's raising the Minimum Sum to keep you from taking your money" - these are some of the talk that has surfaced online, said Mr Tan.
He said he had asked people he met if they had read what the CPF is about.
Most of them said 'no', said Mr Tan.
In his blog post, Mr Tan made three points:
CPF helps Singaporeans retire;
The money belongs to Singaporeans; and
The Minimum Sum is increasing because Singaporeans are living longer, which means there's a need to spread out payouts.
Mr Tan said many countries adopt a pension system.
But Singaporeans save for their own retirement via their CPF accounts, along with contributions by bosses and the government.
This, Mr Tan said, is a more sustainable system.
He said the CPF scheme is more than a monthly pension.
Singaporeans can use it to pay for housing and healthcare.
Mr Tan said in many countries, retirees have to use their pensions to rent homes.
In Singapore, a vast majority of Singaporeans own their homes, paid for out of their CPF.
When the British introduced the CPF scheme in 1955, Mr Tan said, Singaporeans could draw out all their savings at the age of 55.
But that was when the life expectancy was about 60.
Today, the retirement age is 62 - and Singaporeans can be re-employed till they are 65.
And the life expectancy, Mr Tan said, is at least 82 - and rising fast.
Mr Tan said that in 2003, the government wanted to raise the Minimum Sum to help lower- and middle-income retiree couples cope with rising costs.
And that's when the sum of $80,000 then would be raised to a target of $120,000.
The increase will be reached over 10 years.
But, Mr Tan said, many have forgotten this was decided many years ago and are thus surprised each year when the Minimum Sum is raised.
The current Minimum Sum for those turning 55 from July this year is $155,000.
Mr Tan noted that some older Singaporeans may not be able to meet the Minimum Sum.
He said the government will help them.
Mr Tan stressed that Singapore's CPF system is fair and sustainable.
He assured Singaporeans that their funds are absolutely safe.