Two MPs table parliamentary questions on mechanism for CPF payouts; others see no major issues

Two MPs table parliamentary questions on mechanism for CPF payouts; others see no major issues

CPF building generic
File photo of the CPF building. (Photo: TODAY)

SINGAPORE: Two Members of Parliament (MPs) have tabled questions for the next Parliament sitting in February on the Central Provident Fund’s (CPF) retirement payout scheme.

This comes after a letter on the issue was posted online, sparking discussions on whether the monthly payouts under the Retirement Sum Scheme should be made automatic when CPF members turn 65.

READ: Claims that CPF 'retirement payout age' shifted to 70 not true: CPF Board

Along with the letter was a claim that CPF had “quietly” shifted its payout age from 65 years old to 70 years old. This was later debunked by the CPF Board in a Facebook post.

It pointed out that members can start receiving their monthly payouts from 65 years old, if they apply to do so. If they did not apply to do so, the payouts would start automatically after they turned 70.

The automatic start age for payouts was implemented from Jan 2018, it added.

Prior to that, if members did not apply to begin payouts from the age of 65, they would not start at all as there was no automatic commencement date, CPF Board said in the Facebook post. As a result, some members did not start their payouts even after the age of 70.

“The Board therefore introduced the automatic starting of payouts for members turning age 70 from Jan 2018 onwards, to simplify the activation process and let members start enjoying a retirement income from their CPF savings."


Currently, before an individual turns 65, the CPF Board issues a letter informing the member of the option to kick-start monthly payouts and the amount they will receive if they were to start collecting payouts immediately after turning 65.

If the member wants to start receiving the retirement payout between 65 and before turning 70, they will have to submit an application to the CPF Board with details of their bank account. If not, the option to begin payouts will be deferred to 70 years old automatically.

READ: Easier processes for elderly among upcoming changes to CPF Act


Mr Patrick Tay, who is chairperson of the Government Parliamentary Committee (GPC) for Manpower, told Channel NewsAsia that he has filed a question asking if the CPF Board will review the scheme and allow automatic CPF payouts at 65 years of age.

Similarly, Manpower GPC member Lim Biow Chuan has also filed a question asking if the CPF Board will amend its policy to allow automatic withdrawal of the CPF payout at the age of 65, with those who wish to withdraw their CPF funds later than that to then indicate their choice in an opt-out form.

Mr Lim said that the letter issued by the CPF Board, which says that no action is required on the member’s part if he or she wishes to start his payouts at age 70, might suggest to CPF members that withdrawal has been extended to a later age. 

He added that the CPF Board could have phrased it in another way. Speaking to Channel NewsAsia, Mr Lim suggested that the CPF Board could have said: “Please complete the withdrawal form so that we can process your request to withdraw at age 65 years old. In the event that you wish to withdraw at a later age, please indicate your choice in the said withdrawal form.” 

Mr Lim also added that he would prefer a mechanism that would allow CPF members to indicate if they wish to opt out of collecting their payouts at 65 years old. 

READ: 6 in 10 tapped into CPF funds after 55: CPF Board

 “I think most members accept that they have to set aside the minimum sum when they reach 55 years of age as we are all living longer and working longer. However, when you reach 65 years old, you do expect the payouts from CPF. So, I would expect CPF Board to arrange to pay me the monthly amount due to me. It is like when an insurance policy has matured, the insurance company automatically issues a cheque to you,” he said.

Still, not all MPs see any major issue with the current method of informing CPF members of their options.

Manpower GPC deputy chairperson Zainal Sapari told Channel NewsAsia that the current method of communicating and then issuing the payout is the “most logical and efficient”.

Adding that because CPF members have the option to request for the monthly payout anytime between 65 and 70 years old, it is “logical” that members should indicate when they would like to receive it.

While many online have advocated an opt-out mechanism for those who want to delay payments, other GPC members suggested that the same issues may crop up for those who wish to receive their payment later.

“If the payout is automatic at 65 years old, there can also be a situation when a member (who) actually wanted the payout to be at 70 years old but forgot to opt out,” Mr Zainal said.

Manpower GPC members Cheryl Chan and Yee Chia Hsing agreed.

“Either way, there would be people for and against it. For those who have to opt out, if they were to forget or slip that timing, they will also be unhappy,” Ms Chan said.

READ: Majority of applications for CPF funds on medical grounds successful: MOM

READ: New tripartite workgroup to study concerns of older workers

Mr Yee added that as people tend to work for longer with the re-employment age raised to 67, it could make sense for people to collect their payouts later.

“(Members) always have that option to ... start the payout at 65. So if it’s the other way, which is to payout at 65 years old automatically, there will be a portion of people who will be getting their payout even as they continue working which defeats the purpose of the payout. It is meant to cover retirement,” Mr Yee said.

“So it’s not the intention to delay the payout. It’s more to cater to people who are actually working … In fact, because people tend to be living longer, I think it makes sense that if they are working, they should delay their CPF payouts,” he added.

Source: CNA/fs