Budget 2022: CPF Basic Retirement Sum to rise 3.5% annually for next 5 years, payouts close to S$1,000 at age 65
SINGAPORE: The CPF Basic Retirement Sum (BRS) will rise by 3.5 per cent every year for the next five cohorts turning 55 from 2023 to 2027, announced Finance Minister Lawrence Wong in his Budget speech on Friday (Feb 18).
The sum was last increased by 3 per cent per year in 2021 and 2022, announced at the 2020 Budget. Before that, it also increased by 3 per cent per year since 2017.
The BRS provides Central Provident Fund (CPF) members with monthly retirement payouts that cover basic living expenses. BRS adjustments generally account for long-term inflation and some improvements in the standard of living.
The sum will be adjusted to provide members with higher monthly CPF payouts in their retirement years, said Mr Wong.
With the increase, those who set aside the BRS when they turn 55 in 2027 will receive payouts of close to S$1,000 per month when they are 65, and this will continue for the rest of their lives, he said.
“This will give them greater assurance for their basic retirement needs,” he added.
The BRS for those who turned 55 last year was S$93,000 and S$96,000 for those who turned 55 this year.
It will rise to S$99,400 next year and S$114,100 in 2027.
People are not required to top up their CPF accounts in cash or sell their property if they are unable to set aside the BRS.
About eight in 10 active CPF members who turn 55 in 2027 are expected to be able to set aside at least the BRS, and receive the corresponding payout or more, said the Ministry of Finance.
This is the highest level of attainment among all cohorts so far, it noted.
The employer and employee CPF contribution rates for workers aged 55 to 70 will also continue to increase.
The first increase was implemented this year, and the Government has provided employers with a one-year CPF transition offset equivalent to half of the increase in employer CPF contributions, said Mr Wong.
This comes after recommendations from the Tripartite Workgroup on Older Workers to do so, he noted.
Workers aged 55 to 70 will see a total increase of three to four percentage points in their CPF contribution rates over these two years, said Mr Wong.
“We will continue with the next step of the increase in 2023, and provide employers with a similar offset.”