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0111 Written Answer by Minister for Manpower Dr Tan See Leng on CPF payouts

NOTICE PAPER NO. 893 OF 2021 FOR THE SITTING ON OR AFTER 11 JANUARY
QUESTION NO. 1460 FOR WRITTEN ANSWER

NCMP: Ms Hazel Poa

To ask the Minister for Manpower what is the number of Singapore citizens drawing a monthly CPF payout of (i) below $500 (ii) $500 to under $1,000 (iii) $1,000 to under $1,500 (iv) $1,500 to under $2,000 and (v) $2,000 and above, respectively.

NOTICE PAPER NO. 893 OF 2021 FOR THE SITTING ON OR AFTER 11 JANUARY
QUESTION NO. 1461 FOR WRITTEN ANSWER

NCMP: Ms Hazel Poa

To ask the Minister for Manpower what is the projected number of Singapore citizens in 10 years’ time drawing a monthly CPF payout of (i) below $500 (ii) $500 to under $1,000 (iii) $1,000 to under $1,500 (iv) $1,500 to under $2,000 (v) $2,000 to under $3,000 and (vi) $3,000 and above, respectively.

Answer:

1. The monthly CPF payouts that Singapore citizens are receiving have been increasing over generations, given income growth, increased labour force participation, and improvements to the CPF system. Older cohorts also tend to have lower monthly CPF payouts due to more liberal withdrawal rules at age 55. For example, older cohorts who withdrew 50% of their Ordinary and Special Accounts (OSA) savings from age 55 would see their payouts reduce by around half. About 25% of those aged 89 and above2 and receiving CPF payouts in 2020 had monthly payouts above $500. This increased across cohorts to about 40% for those aged 67 to 882 and to about 60% for those aged 65 to 663.

2. It is difficult to project CPF monthly payouts ten years from now with meaningful accuracy as members’ CPF balances could change significantly during this period due to multiple reasons, such as contributions from employment income or voluntary top-ups.

3. Nevertheless, we can get an indication by looking at the CPF balances of the cohort that turned 55 in 2020 and their estimated CPF payouts when they reach age 65. About 66% of active members would have accumulated sufficient CPF savings by 55 to set aside their cohort’s Basic Retirement Sum, and can receive at least around $8004 in monthly payouts for life. Of these, about seven in ten can expect to receive around $1,600 in monthly payouts, as they would have been able to set aside their cohort’s Full Retirement Sum. In addition, about 10% are expected to accrue additional contributions through employment to also receive at least around $800 in monthly payouts by age 65. The other members are likely to have had low total lifetime CPF contributions which means they could be eligible for the Silver Support Scheme5 if they do not have significant means to provide for their retirement.

4. The Silver Support Scheme, which covers a third of all seniors aged 65 and above, provides quarterly cash supplements of up to $900 in addition to their CPF payouts and other forms of Government support such as the Workfare Income Supplement, GST Voucher Scheme and ComCare. Many seniors also receive additional retirement support from their loved ones, from their private savings and by unlocking the value of their housing assets through the Lease Buyback Scheme or Silver Housing Bonus.

 

FOOTNOTE

  1. These members could withdraw all of their OSA savings upon turning age 55.
  2. These members could withdraw 50% of their OSA savings upon turning age 55.
  3. These members could withdraw 30% - 40% of their OSA savings upon turning age 55.
  4. Based on a 55 year old male in 2020 who starts his payout at 65 years old, on the CPF LIFE Standard Plan.
  5. Subject to additional eligibility requirements such as per capita household income and property ownership at the time of assessment.