Special Account Savings Are Retirement Nest Egg, Says MOM

Special Account Savings Are Retirement Nest Egg, Says MOM
- My Paper, 03 March 2009

We refer to the letter "Use Special Account for Education Loans" by Mr Rick Poon (My Paper, 26 February 2009). Mr Poon suggested that the CPF Board consider allowing parents to use their Special Account (SA) savings to pay for their children's education if they do not have sufficient funds in their Ordinary Account (OA).

2.   The CPF Education Scheme was a concession introduced in 1989 to help members support their own or their children's full-time tertiary education at approved publicly-funded educational institutions, using their OA savings.

3.   Savings in the SA are meant for retirement purposes; they should not be used for education as doing so could adversely affect the member's retirement adequacy. With our rapidly ageing population and corresponding increase in retirement and healthcare needs, we should be very careful in allowing the use of more CPF savings for educational purposes.

4.   Parents can approach the respective tertiary institutions for advice on loans and bursaries to help pay for their children's education.

5.   We thank Mr Poon for his suggestion.

Use Special Account For Education Loans
- My Paper, 26 February 2009

Many people have been affected by the economic downturn and have had to accept pay cuts. Others are uncertain about job security and some have been laid off. I would like to suggest that the CPF Board consider allowing parents to use funds from the Special Account to pay for their children's education if they do not have sufficient funds in their Ordinary Account. The amount drawn from the Special Account would be returned by the children once they have graduated and found a job.