Govt extends 4% interest rate for CPF savings till Dec 2010
By S Ramesh, Channel NewsAsia | Posted: 05 September 2009 1325 hrs
S Ramesh and Undertaker
SINGAPORE: The government is ensuring the people's retirement income is not too volatile in light of the global economic conditions and low interest rate environment.
As such the four per cent floor rate for CPF savings will be extended by another year till December 2010, said Manpower Minister Gan Kim Yong.
He also launched the opt-in phase of CPF LIFE where some 700,000 Singaporeans above 55-years-old stand to gain.
62-year old Michael Yap personally believes in having enough savings for his lifetime.
He said: "They have this Balanced Plan where the payout and the bequest is balanced. I have got a dependant especially my wife. If something should happen to me and she survives me, I would like to leave her some money."
The CPF Board has kicked off a series of road-shows to help members better understand the CPF LIFE scheme.
The first phase of the opt-in exercise is voluntary, for members born in or before 1954.
Mr Gan said: "Some of them may already have started drawing down on the minimum sum scheme that we have put in place. So not all of them may find CPF LIFE relevant because they might have their own plans for retirement and some may already be tapping on the current CPF scheme. So it is important to consider the opt-in in the right perspective."
The Minister also urged members to make their choice of the four plans carefully as there's no turning back once the decision is made.
Mr Gan added: “It is important for Singaporeans to make their choice in CPF Life very carefully because we offer four plans, each plan has a unique feature. Some plans will cater to members who want to have more income and leaving behind less for their family when they pass on. Some may prefer to leave more behind and are prepared to have lower payouts monthly. It's a balance between the two factors."
CPF Life provides members with a lifelong monthly income from age 65.
There are four plans to choose from.
LIFE Plus Plan offers higher monthly income but leaves behind less for beneficiaries.
For the LIFE Basic Plan, members accept a lower monthly income for higher bequest amount.
The LIFE Income Plan offers the highest monthly income but members would leave nothing behind when they pass away.
Meanwhile, the default plan is the LIFE Balanced Plan which will provide a balance between a level of retirement income and some bequest amount if they pass away early.
Mr Gan continued: "Ultimately, the more savings you have in your Retirement Account, the more you will get out of CPF LIFE. Those who desire higher payouts can also get their family members to top-up their CPF savings. We have progressively liberalised the Minimum Sum Topping-Up Scheme these few years to facilitate family support. I encourage children to make top-ups for their parents to help them participate in CPF LIFE."
The CPF Board will send out invitation packages to members from Monday.
Singaporeans have attained one of the highest life expectancies in the world. But what's equally important is to ensure that Singaporeans enjoy life long income security.
That's where the CPF LIFE programme comes in. The government is also encouraging Singaporeans to continue working beyond the age of 62. - CNA/vm
By S Ramesh, Channel NewsAsia | Posted: 05 September 2009 1325 hrs
S Ramesh and Undertaker
SINGAPORE: The government is ensuring the people's retirement income is not too volatile in light of the global economic conditions and low interest rate environment.
As such the four per cent floor rate for CPF savings will be extended by another year till December 2010, said Manpower Minister Gan Kim Yong.
He also launched the opt-in phase of CPF LIFE where some 700,000 Singaporeans above 55-years-old stand to gain.
62-year old Michael Yap personally believes in having enough savings for his lifetime.
He said: "They have this Balanced Plan where the payout and the bequest is balanced. I have got a dependant especially my wife. If something should happen to me and she survives me, I would like to leave her some money."
The CPF Board has kicked off a series of road-shows to help members better understand the CPF LIFE scheme.
The first phase of the opt-in exercise is voluntary, for members born in or before 1954.
Mr Gan said: "Some of them may already have started drawing down on the minimum sum scheme that we have put in place. So not all of them may find CPF LIFE relevant because they might have their own plans for retirement and some may already be tapping on the current CPF scheme. So it is important to consider the opt-in in the right perspective."
The Minister also urged members to make their choice of the four plans carefully as there's no turning back once the decision is made.
Mr Gan added: “It is important for Singaporeans to make their choice in CPF Life very carefully because we offer four plans, each plan has a unique feature. Some plans will cater to members who want to have more income and leaving behind less for their family when they pass on. Some may prefer to leave more behind and are prepared to have lower payouts monthly. It's a balance between the two factors."
CPF Life provides members with a lifelong monthly income from age 65.
There are four plans to choose from.
LIFE Plus Plan offers higher monthly income but leaves behind less for beneficiaries.
For the LIFE Basic Plan, members accept a lower monthly income for higher bequest amount.
The LIFE Income Plan offers the highest monthly income but members would leave nothing behind when they pass away.
Meanwhile, the default plan is the LIFE Balanced Plan which will provide a balance between a level of retirement income and some bequest amount if they pass away early.
Mr Gan continued: "Ultimately, the more savings you have in your Retirement Account, the more you will get out of CPF LIFE. Those who desire higher payouts can also get their family members to top-up their CPF savings. We have progressively liberalised the Minimum Sum Topping-Up Scheme these few years to facilitate family support. I encourage children to make top-ups for their parents to help them participate in CPF LIFE."
The CPF Board will send out invitation packages to members from Monday.
Singaporeans have attained one of the highest life expectancies in the world. But what's equally important is to ensure that Singaporeans enjoy life long income security.
That's where the CPF LIFE programme comes in. The government is also encouraging Singaporeans to continue working beyond the age of 62. - CNA/vm
