An elderly Singaporean has decried the $482 monthly retirement sum the Central Provident Fund (CPF) Board has allegedly said it will give him from his CPF savings over the next 28 years.
Surprised by the “illogical” 28-year payout period, the 65-year-old senior citizen asked the CPF Board to shorten the payout period to 20 years, so that he could get a greater monthly payout over a shorter period since he will be 93 years old by the end of the current arrangement.
CPF Board allegedly rejected his request since doing so would “deplete [his] RA savings prematurely”.
The senior citizen, named Zol, has questioned the logic in CPF Board’s payout mechanism in a letter to local publication, The Online Citizen. Recalling that he was “shocked” when he received a letter telling him that he would “could only receive $482 monthly from June 2019 under the CPF Retirement Sum Scheme, and this payout would last about 28 years, when I would be 93 years old.”
Sharing a picture of the letter he apparently received, Zol said: “I then wrote in and requested for a 20-year payout so as to increase my monthly payout, the reason being Singapore’s life expectancy was 85.4 years (based on statistics reported in the media.) The CPF simply rejected it and cited “current policies” as the reason.”
The email reply that Zol attached in his letter showed that Zol will receive pro-rated monthly payouts since he does not have the cohort Full Retirement Sum of S$106,000 in his Retirement Account to qualify for $910 monthly payouts.
CPF Board further explained that interest components such as the Extra Interest and Additional Extra Interest will help “extend the duration of members’ payouts to ensure they do not outlive their retirement savings as much as possible”.
Revealing that it is “unable to adjust your monthly payout to last for 20 years as it will deplete your RA savings prematurely,” CPF Board said that Zol could defer the start of his payouts to a later age “to be eligible to receive higher payouts and/or shorter payout duration.”
Pointing out that he is married with no children, the elderly Singaporean asked: “As I am married with no children, I need to support myself from now till death. If I can not secure a job from now till 70 years old, what do I survive on during this 5-year period if I opt in at 70 years old?”
Pointing out that the interest may not even help cover the rising cost of living in Singapore, Zol lamented: “In light of my situation (ie. married with no children), it is totally illogical to suggest a payout term of 28 years. When my wife and I pass on, there is no one to receive my balance payout.”
Asserting that he is “not asking the Government to feed me” and that he is not looking for a handout, the senior asserted that the CPF Board is “only a custodian of members’ CPF savings,” and should consult members and give members a say in accepting policies.
Zol also asked why political parties and incumbent MPs have not spoken up about CPF’s payout mechanism and said: “I presume with a monthly salary of $16,000, they are unlike common folks like us who need the monthly payouts to live.”
Two incumbent ruling party MPs have actually filed questions asking for revisions to CPF’s payout mechanism. Three other incumbent PAP MPs, however, have publicly expressed support for the existing “opt-in” payout mechanism as the “most logical and efficient” arrangement.