Newly-minted Manpower Minister Josephine Teo’s comments on CPF withdrawals nearly slipped away unnoticed during the debate in Parliament last week. Teo, who replaced her predecessor Lim Swee Say as Manpower Minister during the cabinet reshuffle in May, implied that nearly half of all CPF members did not meet the minimum sum in 2016.
Teo had been addressing MP Gan Thian Poh’s questions on how many CPF members did not apply to $5,000 or more from their CPF accounts at the age of 55, how many have more than the minimum sum required in their CPF accounts, and how many PRs have withdrawn and cancelled their CPF accounts over the past few decades.
In her written reply, Teo answered the first question and said that as of last year, 42 per cent of CPF members who turned 55 the year before did not withdraw any CPF monies within a year of their 55th birthday, even when their CPF savings are higher than the statutory minimum sum.
It was when it came to answering Gan’s second question, that Teo made a startling implication. She said: “For the same cohort, about 53% of active members met their Full Retirement Sum in cash and pledge at age 55 in 2016 (i.e., able to set aside the Full Retirement Sum fully in cash, or met Basic Retirement Sum in cash and provided sufficient property pledge or charge).”
Teo continued: “Of this group, about 5 in 10 left additional funds in their CPF Ordinary or Special Accounts. Based on our observations, members do so because they have no immediate need of the money, or they wish to take advantage of the higher CPF risk-free interest rates.”
If 53 per cent of members were able to meet their minimum sum, this could mean that 47 per cent of members were not able to do so.
CPF members who turned 55 in 2016 had to set aside $161,000 in their Retirement accounts to receive monthly payouts when they turn 65. The Minimum Sum scheme is compulsory for all CPF members.
This means that nearly half of all CPF active members were unable to meet the $161,000 minimum sum.
To the last question on how many PRs have withdrawn and cancelled their CPF accounts over the past few decades, Teo answered that there were an annual average of 13,500 CPF members between 2013 and 2017.
Of this group, she said, “0.4% of total CPF members, withdrew their CPF monies when they left Singapore. This includes former Singapore Citizens (SC), former Permanent Residents (PR) and foreigners who contributed to the CPF before 2003.”
Interestingly, netizens responding to Teo’s comments felt that both her answers as well as the questions Gan asked her were “useless”. The following questions have been shared on social media hundreds of times since Teo released her response: