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Minister for Manpower Dr. Tan See Leng affirmed that achieving this amount remains a relevant indicator to gauge adequacy of basic retirement.
In a recent Parliamentary response, Minister for Manpower Dr Tan See Leng has affirmed that Singapore's Basic Retirement Sum (BRS) attainment remains a relevant indicator for basic retirement adequacy.
As Minister Tan explained, the CPF BRS is the amount that members are required to set aside at age 55 to provide a basic payout for life from age 65. It is adjusted regularly by taking reference from the lower-middle retiree household expenditure and factoring in long-term inflation as well as some increase in the standard of living, and thus remains a relevant indicator.
"The BRS does not prevent members from setting aside more savings in CPF in order to receive a higher retirement payout, and members who wish to do so can set aside up to the Enhanced Retirement Sum."
Minister Tan was tackling a query by Member of Parliament (MP) Saktiandi Supaat, who had asked about whether the attainment of the BRS remains a relevant indicator for basic retirement adequacy, and for any strategy in place to enhance and protect the retirement adequacy of Singaporeans in different age groups.
As shared in Minister Tan's response, about seven in 10 active CPF members who turned age 55 in 2022 had set aside the cohort BRS or more — similar for active CPF members who are Singaporeans. Of the remaining three in 10 (or 12,400 members) who had not set aside the cohort BRS, about 44%, or 5,400 members, are male and about 56%, or 7,000 members, are female.
Further elaborating, the seven in 10 active CPF members who had set aside their BRS or more at age 55 in 2022 can expect to receive lifelong monthly payouts of at least around S$850 from age 65 based on the CPF LIFE Standard Plan. All active CPF members have positive balances in their CPF accounts and will receive some CPF LIFE payout, if they are on the scheme.
Next, the Minister also tackled a separate query raised by MP Liang Eng Hwa, who checked in on the current number of Singaporeans aged 55 years old who not been able to attain the BRS, with a breakdown according to their gender; and of which, how many will receive a monthly CPF LIFE payout of (i) less than $1,000 and (ii) zero amount, respectively.
"To help Singaporeans attain basic retirement adequacy, we, first and foremost, need to ensure that our economy continues to be competitive and create good jobs," Minister Tan highlighted.
This, he added, includes uplifting lower-wage workers through Singapore's Workfare and Progressive Wage moves.
"Singaporeans can be assured that they will be able to meet their basic retirement needs as long as they work and contribute consistently to CPF."
For those who are unable to work consistently and have less in retirement, Singapore has also provided targeted support through schemes such as the Silver Support Scheme. The Government will match top-ups for eligible seniors through the Matched Retirement Savings Scheme.
"We recognise that older generations of Singaporeans grew up under different economic circumstances. Our seniors had less time to benefit more from Singapore’s growth and from recent improvements to the CPF system, and hence have built up less retirement savings."
As such, Singapore has carried out the following:
- Singaporeans from the Pioneer and Merdeka Generation, including those who are presently aged 65 and above, will continue to benefit from the generous Pioneer Generation and Merdeka Generation Packages.
- For Singaporeans who are currently between 50 and 64 years old, the Majulah Package has been designed to provide more support to those with lower incomes and less wealth. Those in the Pioneer and Merdeka Generations will also benefit from the Majulah Package if they are eligible.
- Younger Singaporeans below 50 are saving more in their CPF through work than the older generations due to wage growth. Minister Tan also assured that they will also have a longer runway to benefit from more recent enhancements to the CPF system and Singapore’s economic growth and save up for their retirement.
Lead image / Shutterstock
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