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Following Prime Minister Lee Hsien Loong’s declaration that more can be done to improve the country’s local Central Provident Fund (CPF) system, the Ministry of Manpower (MOM) has announced it is launching a panel to study possible improvements within the CPF structure.
“The CPF system has served Singaporeans well and has several distinctive strengths,” MOM stated in a press release.
“However, the government has been studying further enhancements to some key aspects of the CPF system to make it more flexible to meet the needs of more Singaporeans and provide additional options in retirement.”
These changes will be analysed by the CPF advisory panel, which will convene from mid-September 2014.
MOM has appointed Professor Tan Chorh Chuan, president of the National University of Singapore, to chair the panel.
“The panel has been assigned an important responsibility,” Tan said. “We recognise that CPF members have varied needs, and we hope that the panel’s work will provide useful insights to help the government make further improvements to the CPF system to provide greater peace of mind and more options in retirement.”
The panel members will include academics, financial industry practitioners, and community representatives from the unions, social sector and grassroots, to provide a broad diversity of views on the enhancements under consideration.
MOM highlighted key areas these members will be exploring in the coming months, including how the minimum sum should be adjusted beyond 2015 in order to meet the objective of delivering a basic monthly retirement payout for life, and how to enable CPF members to withdraw a bigger lump sum upon retirement.
They will also look at how to provide an option for members who prefer CPF payouts that are initially lower but rise with time to help with increases in the cost of living.
Flexibility for members to use private investment plans or annuities to supplement their CPF savings will also be a key target area for the panel to focus on, MOM added.
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