NTUC expresses support for CPF Advisory Panel’s recommendations

SINGAPORE — NTUC’s Assistant Secretary-General Cham Hui Fong has expressed broad support for the CPF Advisory Panel’s recommendations released today (Feb 4).

Ms Cham said that the reframing of the Minimum Sum to the Basic Retirement Sum for one person “provides a more realistic and attainable amount for most workers to achieve retirement adequacy.”

The panel’s suggestion to use long-term inflation to adjust the Basic Retirement Sum also provides greater predictability, she said.

Ms Cham noted that the panel’s recommendation to improve flexibility to defer the payout start age for higher monthly payout is also something that the Labour Movement had also previously suggested.

“The lump sum withdrawal of 20 per cent of the retirement account balance at payout eligibility age is another point that we concur, as well as the request for Government to provide incentives to encourage members not to make the withdrawal and keep their retirement savings intact so that the amount of their monthly payouts will not be reduced.”

READ NTUC’S STATEMENT IN FULL:

NTUC’s Response to the CPF Advisory Panel’s Recommendations

1. The CPF Advisory Panel’s reframing of the Minimum Sum to the Basic Retirement Sum for one person provides a more realistic and attainable amount for most workers to achieve retirement adequacy. And we support the suggestion to relax the CPF ruling so that CPF members, upon reaching the Basic Retirement Sum, can transfer their CPF savings to help family members with lower balances or are non-working.

2. The Panel’s suggestion to use long-term inflation to adjust the Basic Retirement Sum also provides greater predictability. The Panel has suggested a schedule that ends in year 2020. We hope that if this is accepted by the Government, any adjustment to the Basic Retirement Sum thereafter will be given adequate advance notice to members, and that there is transparency on how the adjustments are calculated.

3. The flexibility to defer the payout start age for higher monthly payout is also something that the Labour Movement has suggested. The lump sum withdrawal of 20 per cent of the retirement account balance at payout eligibility age is another point that we concur, as well as the request for Government to provide incentives to encourage members not to make the withdrawal and keep their retirement savings intact so that the amount of their monthly payouts will not be reduced. We hope that these suggestions will be deliberated by the Government.

4. We are pleased that the Panel shares our concerns on helping members build up their retirement savings. We hope that the Government will accept our suggestions to raise the wage ceiling for CPF contributions; level up the total CPF contribution rates of workers who are more than 55 years old; and equalise the CPF contribution rates of mature workers, especially those aged above 50 up to 55, with the younger cohorts.

5. We agree with the Panel that there will be various decisions which members have to make when they approach retirement. These decisions will impact their lifelong retirement income. Hence, it is vital that there is timely and sufficient information, as well as financial counselling, for members to make informed decisions.

Ms Cham Hui Fong

Assistant Secretary-General

National Trades Union Congress