Public backlash over the Central Provident Fund (CPF) payout mechanism has yet to die down.
Two Singaporeans have urged the authorities to make full CPF payout to members by the age of 70, in separate forum letters published by the national broadsheet.
Interest in CPF’s payout mechanism picked up last month when a rumour that the CPF Board may have changed the retirement sum Payout Eligibility Age (PEA) to 70 years old from 65 years old began making the rounds online.
Clarifying that this isn’t true, CPF Board said in a statement that the PEA is age 65. It added, however, that automatic Retirement Sum Scheme payouts will only start at the age of 70 if CPF members do not ask for their payouts to commence at age 65.
Singaporeans, however, have blasted the CPF Board and have asked why it did not set the automatic payout arrangement starting point to age 65 if all it wants to do is simplify the payout activation process.
In a letter published on Saturday (23 Feb), medical doctor Dr Ho Ting Fei made the case for revising the current CPF payout mechanism.
Noting Manpower Minister Josephine Teo’s statement that there was no advantage for the CPF Board or the Government to want members to defer payouts beyond 65, Dr Ho asked why the authorities don’t lower the automatic payout mechanism to age 65 instead of 70.
Arguing against the authorities’ stance that such a change would take “a long while for people to get used to,” Dr Ho said that this would be such a “easily-explained change” where all sides get what they want – those who need the money can receive it at age 65 while those who want the attractive interest rate can opt out for deferred payments.
“The payout at age 70 should include the entire Retirement Sum. The CPF Board should not hold on to the sums of every person who turns 70 and dispense it in monthly portions over the next 23 years until the person turns 93.
“According to SingStat, only about 30 per cent of Singapore residents are expected to be alive at 90. What merit is there, then, in not paying out the entire Retirement Sum at 70?”
Calling on the Government to make policies “user-friendly and flexible enough to change when necessary,” Dr Ho said that the payout mechanism should be revised in a more compassionate manner given the life expectancy and needs of members.
Another forum letter writer seconded Dr Ho’s views. In a letter published on Tuesday (26 Feb), Mr Lawrence Loh Kiah Muan argued that CPF Board’s “rules and policies should be simple and logical, instead of being complicated, confusing and potentially contentious.”
Mr Loh also asserted that members should be able to withdraw their Retirement Sum at the retirement age of 62, since savings from the Ordinary Account can be withdrawn at the age of 55. He asked: “What is the rationale for starting payouts at the ages of 65 to 70, when the minimum retirement age is 62?”
Echoing Dr Ho’s calls to consider revising CPF policies given life expectancies and to make full CPF payout by age 70, Mr Loh suggested that CPF Board could compute monthly payouts up to the average lifespan and allow the balance to be withdrawn at the age of 70.
He asserted: “Ultimately, CPF savings belong to the members, and they should have more say in how they can be used.”
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