CPF Changes Up For Debate In Parliament

Source : The Straits Times, Sep 14, 2007

CHANGES to the Central Provident Fund (CPF) system will be the main topic of debate in Parliament from Monday when Manpower Minister Ng Eng Hen gives details of proposed changes.

Wide-ranging amendments to the Penal Code, which governs most criminal offences here, will also be tabled at next week's sitting, as will a proposed piece of legislation on preventing terrorist bombings.

As these two sets of amendments are only being introduced, or in Parliament parlance, going through their 'first reading', they will be debated only at a later date.

Changes to the CPF to prepare for a greying population were first outlined by Prime Minister Lee Hsien Loong in his National Day Rally speech last month.

The CPF measures are meant to ensure that people have enough for old age even as lifespans go up.

Among other things, members will get higher returns of up to one percentage point more on their savings.

The draw-down age for the Minimum Sum will also be postponed from 62 to 63 in 2012, and gradually raised to 65 by 2018.

The Minimum Sum is the amount people must keep in their Retirement Accounts after withdrawing their CPF at age 55.

CPF members now get a monthly payout from the Minimum Sum at age 62, for up to 20 years.

But the change likely to attract intense scrutiny is some form of compulsory annuity for members now below 50.

MPs say the annuity is perceived negatively at dialogues with residents.

Read the full report in Saturday's edition of The Straits Times.