Debated in Parliament on 7 Oct 2019.
Ms Foo Mee Har asked the Minister for Manpower whether the CPF Board will consider reviewing the payout duration for the CPF Retirement Sum Scheme such that CPF members can receive higher payouts.
MOM and CPF Board are currently reviewing the payout rules for the Retirement Sum Scheme (RSS).
The RSS is the main retirement payout scheme for CPF members born before 1958. RSS payouts are designed to last up to 20 years from the payout eligibility age, taking into account the base interest rate earned on Retirement Account savings, which is now 4%.
Rising life expectancy over the years has increased the risk of members outliving their payouts. In 2018, more than half of Singapore residents aged 65 were expected to live beyond age 85 and about one in five were expected to live past age 95.
Therefore, when Extra Interest and Additional Extra Interest were introduced by the Government in 2008 and 2016 respectively, they were used to extend the RSS payout duration beyond 20 years. This extension reduces the risk of members running out of savings in old age. Even with the extension, CPF Board ensures that RSS payouts do not stretch beyond age 95.
We have received feedback from some members who feel that a payout duration up to age 95 is too long. The on-going review of RSS payout rules will consider how to address this concern. We expect to complete the review before the end of 2019 and will announce the outcome thereafter.
PAPERCUTS