Let Annuity Substitute For Minimum Sum

Source : The Straits Times, Oct 13, 2007

TWO years ago, when I was 53 years old, I bought a $100,000 annuity using funds in my CPF Ordinary Account, in case I lived beyond the age of 82. This annuity will start paying a guaranteed monthly payout of $500 when I am 62 until I die.

I pledged my annuity to the CPF Board but was told that as there is a shortfall of $290 - under the compulsory annuity, the monthly payout would be $790 - I would not be entitled to full exemption from the Minimum Sum scheme.

I was advised to give up my annuity if I needed a lump sum of money in the future.

When I turned 55 this year, the Minimum Sum of $99,600 was set aside in my Retirement Account.

On Aug 19, the Prime Minister proposed the compulsory annuity. The following day, I called the CPF Board to ask that it reconsider my appeal for a full exemption from the Minimum Sum scheme.

A week later, I received a letter from the board saying that I could apply for a partial exemption and set aside a reduced Minimum Sum.

As I had pledged my annuity, whose value is higher than the required Minimum Sum, it is only logical that I should be granted a full exemption from the Minimum Sum scheme.

Furthermore, with the annuity I am assured of a monthly payout until I die, thus securing my retirement.

Everyone has different retirement needs and only the person himself knows best what he needs for his golden years.

Having planned for my retirement since young, I know clearly what I will need for my future. Having provided its citizens with a good education, the Government should trust them to know what is best for them.

The Government should be more flexible when dealing with the hard-earned savings of its people, built up over the years. It should look at each appeal on a case-by-case basis as the retirement needs of people differ.

Goh Mui Sim (Ms)