More mortgage debt due to Minimum Sum rule

I refer to this week’s Talking Point, “How can the CPF system be improved?” My husband and I bought a resale four-room flat in 1997 and we had been servicing our mortgage through our Central Provident Fund (CPF).

In 2012, I could no longer use my Ordinary Account to pay for my loan, as we had reached our valuation limit.

I would only be allowed to use any excess from my Ordinary Account to service our loan after I set aside the Minimum Sum.

As I do not have enough to meet the Minimum Sum, I cannot continue servicing my loan, even though the S$27,000 in my Ordinary Account is enough for a one-off settlement of our remaining mortgage (S$20,000).

This is frustrating as we must continue paying interest every month. The CPF Board should make provision for members to settle their outstanding loan, regardless of whether they meet the Minimum Sum.

What is the point of having money in one’s accounts and yet needing approval to pay off one’s loan?

The CPF website states: “Setting aside the Minimum Sum when you reach 55 ensures that you have some regular income from age 65 to live on in your retirement.”

How does being debt-free, with a fully-paid flat, contradict the purpose of having the Minimum Sum in our accounts? It is time for the CPF Board to exercise flexibility and review policies that do not make sense.