CPF Minimum Sum and MediSave amounts adjusted
01 June 2009
Singapore: The prevailing CPF Minimum Sum (MS) will be raised
from July 1 for those aged 55 years. The new amount will be S$117,000,
up from S$106,000.
The move, which includes an adjustment for inflation, is to ensure that
Singaporeans set aside sufficient savings for their retirement.
It is also in line with the Ministry of Manpower's announcement in
August 2003 that the CPF Minimum Sum will be raised gradually to reach
S$120,000 (in 2003 dollars) by 2013.
In addition, the CPF board announced in a news release issued on Monday, that
the Medisave Minimum Sum (MMS) and Medisave Contribution Ceiling (MCC) will also be adjusted.
With effect from July 1, the Medisave Minimum Sum will be set at S$32,000 instead of S$29,500.
As for the maximum balance a CPF member may have in his Medisave
Account, known as the Medisave Contribution Ceiling, this is fixed at
S$5,000 above the Medisave Minimum Sum and be increased correspondingly
to S$37,000, from S$34,500.
Any Medisave contribution in excess of the prevailing Medisave
Contribution Ceiling will be transferred either to the member's Special
Account if he is below the age of 55 years, or to his Retirement
Account if he is above the age of 55 and has a shortfall in the Minimum
Sum.
- CNA/sf
From The Newsroom Team
The CPF minimum sum has been INCREASED yet again to “adjust for inflation”. However, for some strange reasons, the Straits Times chose to omit the key word - “increased” in its report:
“From next month onwards, Central Provident Fund (CPF) members will see changes made to their Minimum Sum (MS), Medisave Minimum Sum (MMS), and Medisave Contribution Ceiling (MCC).
Starting July 1 this year, the CPF MS will be revised from $106,000 to $117,000. This will apply to members who turn 55 from July 1, 2009 to June 30, 2010.” (read article here)
The minimum sum is the amount of money needed to to be set aside in the Retirement account of Singaporeans after they reach 55 years of age before they can withdraw their CPF in one lump sum.
For example, if one has $118,000 in his/her CPF ordinary account, he/she can withdraw $1,000 in cash while leaving the minimum sum of $117,000 in the Retirement account.
In other words, if you do not have this amount in your CPF by the time you are 55, you will be at the complete mercy of the CPF Board to “dispense” your own savings to you monthly till the day you die.
To make it worse, if you are unable to set aside your full Minimum Sum in cash, your property, bought with your CPF savings, will be automatically pledged for up to half of your Minimum Sum. (details here)
How many Singaporeans can pledge this minimum sum to their retirement account by 55 years of age? It will be a interesting figure for us to find out.
The figures are computed based on the cost of living in Singapore. What if one decides to retire in China, Thailand or Malaysia? Can the sum be adjusted so as to free out more cash for retirees to enjoy their twilight years elsewhere?
The government has no business or right to withhold the savings of Singaporeans from them. These monies are not sitting idly in the CPF. Are they used by our Sovereign Wealth Funds in overseas investments, e.g. to bail out distressed foreign banks?
It seems like most Singaporeans will never be able to withdraw their CPF in one full sum unless they are filthy rich or they pack up their bags and live Singapore for good.
What do Singaporeans want to do after they retire from active working life, that is IF they ever retire? Do they want to depend on a few hundred dollars from their CPF savings to survive or do they want to make use of it to enjoy life like travelling around the world?
We vote for a government to care for us when we grow old and infirm, not to “help” us plan for our retirement with our own savings. Why can’t the government do more to help those elderly with no CPF savings to depend on when they can afford to blow away $4.6 billion dollars in less than a year?
Do we really need to invest our reserves in such risky investments in order to generate returns year after year? Not all developed countries in the world have SWFs like Singapore and they are doing as well, if not better than us.
Are Singaporeans getting short changed by the government? Do we really want to work forever to contribute to Singapore’s GDP growth (so as to justify the exorbitant pay of our ministers) till the day we collapse and die? Is this the definition and meaning of life in Singapore?
While the CPF minimum sum keeps increasing, the salary of the ordinary Singapore worker has stagnated. How is it possible for us to accure that sum of money in our CPF when our salaries forever lags behind the high cost of living which has been increasing relentlessly?
Does the government really understand the concerns and aspirations of Singaporeans? Perhaps we should peg their salaries to the median salary of the Singapore worker instead of the GDP growth before they can understand the plight of the common man in the streets.