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Raise Special Account rates to help the needy

While the Central Provident Fund (CPF) advisory panel’s proposals give CPF members more retirement payout and withdrawal choices, I have some other suggestions for the panel as it continues its review. (“Simpler, more flexible CPF scheme proposed”; Feb 5)

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Nicholas Cheong Fook Hing

While the Central Provident Fund (CPF) advisory panel’s proposals give CPF members more retirement payout and withdrawal choices, I have some other suggestions for the panel as it continues its review. (“Simpler, more flexible CPF scheme proposed”; Feb 5)

As a grassroots volunteer, I gathered residents’ feedback and took part in focus group dialogues on how to improve the retirement savings system. Many participants were concerned that residents with low CPF balances will not have enough when they retire.

There may be two ways to help those who are unable to meet the Basic Retirement Sum to build up their CPF savings.

First, the CPF Board could provide a higher interest rate for the Special Account, to help members grow their funds in this account, which is meant for retirement.

Second, as the Basic Retirement Sum increases over time, this increased interest rate could apply to the full sum instead of only the first S$60,000 in the Ordinary and Special accounts.

Not many members understand the many CPF rules, choices and their impact. Now, the Minimum Sum will be replaced by the Basic, Full and Enhanced Retirement sums. Also, members will have more retirement withdrawal and payout options.

I suggest that CPF awareness should start early, as soon as a member enters the workforce or when CPF funds are used to buy a flat, and not only when one turns 55.

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