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SINGAPORE: The government is refining the Central Provident Fund (CPF) system to help Singaporeans prepare for a more secure retirement.
Amendments to the CPF Act were passed in Parliament on Tuesday. The changes include allowing extended family members and employers to top up a CPF member's Special or Retirement account with cash.
Acting Manpower Minister Gan Kim Yong said: "This will encourage family support and provide another route for employers to make voluntary contributions to employees' CPF."
On the Minimum Sum cash top-ups for recipients below age 55, the annual cap of S$26,393 imposed on all mandatory and voluntary contributions will now no longer apply.
Instead, Minimum Sum cash top-ups would be allowed up to the prevailing Minimum Sum, just like Minimum Sum CPF top-ups.
Another change is that cash top-ups made after the new rules take effect would no longer be returned to the giver. Upon the recipient's death, the cash top-ups will be distributed by way of CPF nomination or intestacy laws.
Mr Gan said: "We would also like to re-align the treatment of top-ups when the recipient dies, or in the case of a non-citizen recipient, when he withdraws his CPF upon leaving Singapore permanently, so that cash top-ups would be treated as if they were gifts to the recipients. Currently, top-ups via cash or CPF would be returned to the giver."
The new Minimum Sum rules will take effect on November 1 this year.
Givers can take advantage of the new tax exemption of up to S$7,000 of top-up announced earlier in this year's Budget when they add cash to other CPF members' accounts before the end of the year.
This exemption will be in addition to the S$7,000 exemption for making cash top-ups to their own CPF accounts.
The refined CPF scheme will also allow the savings to be used to pay for degree and diploma courses offered by local institutions, where the qualification is conferred by a reputable foreign institution.
Currently, this is restricted to qualifications conferred only by local institutions.
Before speaking on the amendments, MP for Sembawang GRC, Ellen Lee, addressed another issue.
"May I take this opportunity on behalf of the House, to wish Minister Mentor 'Happy Birthday and good health'." Minister Mentor Lee Kuan Yew turns 85 on Tuesday.
His presence in Parliament on Tuesday is his first public appearance since he was discharged from hospital two days ago, after a successful treatment for atrial flutter, an abnormal heart rhythm.
- CNA/ir
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