Debated in Parliament on 3 Oct 2023.
Mr Saktiandi Supaat asked the Minister for Manpower (a) whether attainment of the Basic Retirement Sum remains a relevant indicator for basic retirement adequacy; and (b) what is the strategy to enhance and protect the retirement adequacy of Singaporeans who are presently aged (i) 65 and above (ii) between 50 and 64 (iii) between 35 and 49 and (iv) 34 and below respectively.
Mr Liang Eng Hwa asked the Minister for Manpower (a) what is the current number of Singaporeans who are aged 55 and have not been able to attain the Basic Retirement Sum, with a breakdown according to their gender; and (b) of which, how many will receive a monthly CPF LIFE payout of (i) less than $1,000 and (ii) zero amount, respectively.
The CPF Basic Retirement Sum (BRS) is the amount that members are required to set aside at age 55 to provide a basic payout for life from age 65. The BRS is adjusted regularly by taking reference from the lower-middle retiree household expenditure and factoring in long-term inflation as well as some increase in the standard of living. Thus, BRS attainment remains a relevant indicator for basic retirement adequacy. The BRS does not prevent members from setting aside more savings in CPF in order to receive a higher retirement payout, and members who wish to do so can set aside up to the Enhanced Retirement Sum.
About seven in 10 active CPF members who turned age 55 in 2022 had set aside the cohort BRS or more. This figure is similar for active CPF members who are Singaporeans. Amongst the three in 10, or 12,400 members, who had not set aside the cohort BRS, about 44%, or 5,400 members, are male and about 56%, or 7,000 members, are female.
The seven in 10 active CPF members who had set aside their BRS or more at age 55 in 2022 can expect to receive lifelong monthly payouts of at least around $850 from age 65 based on the CPF LIFE Standard Plan. All active CPF members have positive balances in their CPF accounts and will receive some CPF LIFE payout, if they are on the scheme.
To help Singaporeans attain basic retirement adequacy, we, first and foremost, need to ensure that our economy continues to be competitive and create good jobs. We uplift lower-wage workers through Workfare and Progressive Wage moves. Singaporeans can be assured that they will be able to meet their basic retirement needs as long as they work and contribute consistently to CPF.
For those who are unable to work consistently and have less in retirement, we provide targeted support through schemes, such as the Silver Support Scheme. We also encourage family members to support their loved ones by making top-ups to their CPF Retirement Accounts. The Government will match top-ups for eligible seniors through the Matched Retirement Savings Scheme.
We recognise that older generations of Singaporeans grew up under different economic circumstances. Our seniors had less time to benefit more from Singapore’s growth and from recent improvements to the CPF system and, hence, have built up less retirement savings.
For Singaporeans from the Pioneer and Merdeka Generations, including those who are presently aged 65 and above, they will continue to benefit from the generous Pioneer Generation and Merdeka Generation Packages.
For Singaporeans who are young seniors and currently between 50 and 64 years old, we have designed the Majulah Package to provide more support to those with lower incomes and less wealth. Those in the Pioneer and Merdeka Generations will also benefit from the Majulah Package if they are eligible.
Younger Singaporeans below age 50 are saving more in their CPF through work than the older generations due to wage growth. They will also have a longer runway to benefit from more recent enhancements to the CPF system and Singapore’s economic growth and save up for their retirement. We will be sharing more details on other enhancements to the Workfare Income Supplement, Silver Support Scheme and the Matched Retirement Savings Scheme next year.
PAPERCUTS