The CPF Advisory Panel gathered the thoughts and suggestions from Singaporeans regarding the CPF and has proposed a couple of changes prior to Budget 2015. We explore what these CPF changes mean for you.
The CPF is one of the most emotive issues in Singapore and always generates a maelstrom of controversy and discussion every time a new change is announced to the system. For Budget 2015, the CPF Advisory Panel, which was formed in September 2014, gathered the thoughts and suggestions of a broad spectrum of Singaporeans before deciding on the tweaks to the CPF system.
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One of the most worrying concerns that we have about the CPF system is how misunderstood it is among many Singaporeans. So, we’re happy that the recommendations by the CPF Advisory Panel look like they’re trying to rectify this issue by simplifying all the different rules and regulations.
One of the issues we brought up concerning the CPF funds during a pre-Budget 2015 meeting was the disconnection that many Singaporeans felt with their CPF monies. Simply put, many of us feel that the funds generated in their CPF accounts is a case of “can see but cannot touch”. We suggested a more emotional system that gave Singaporeans the sense that the CPF money is theirs for the future and not just an untouchable treasure chest. While the recommendations don’t seem to address this, we’re happy to note that the panel has suggested some flexibility when it comes to withdrawing the money in the CPF account. This might help to alleviate the disconnected feeling that many Singaporeans have, that the money in their CPF accounts is not theirs, but owned by the government.
We cover more of the proposed CPF changes in our infographic below and what the different changes mean for you, in layman’s terms.
A few things you need to take note of:
- The formation of the Retirement Account occurs at 55 when savings from the Special Account and Ordinary Account are combined.
- The panel has also recommended a deferred pay-out start age in the event that you’re still working at 65 and want to store money in your Retirement Account so that it can earn higher interest.
Do take note that these proposed CPF changes have been accepted by the Minister for Manpower Tan Chuan-Jin but might not necessarily be the final form when Budget 2015 is announced.