Measures to Reduce Unclaimed CPF Monies

3 Mr Seah Kian Peng asked the Minister for Manpower what can be done to reduce the amount of unclaimed CPF monies going forward.

4 Ms Foo Mee Har asked the Minister for Manpower whether CPF Board will consider changing the CPF nomination process to facilitate more seamless distribution of deceased CPF members' funds to their loved ones and rightful owners promptly.

5 Mr Chong Kee Hiong asked the Minister for Manpower regarding unclaimed CPF monies (a) what are the profiles of these members by age, ethnic group, marital status and education level; (b) what measures does the Ministry have to increase the awareness of nominations such as that of contacting and engaging those above a certain age who have yet to make nominations; and (c) whether the Ministry will consider allowing higher withdrawal amounts for those who have no kin to nominate.

The Minister for Manpower (Mrs Josephine Teo): Mr Speaker, with your permission, may I take Question Nos 3 to 5 together, please.

Mr Speaker: Yes, please.

Mrs Josephine Teo: I thank the Members who have raised important questions. There are several key issues I hope to address in this reply.

The first question is whether most CPF monies go unclaimed? The answer is no. In fact, about 98% of all unused CPF monies belonging to deceased members were distributed by CPF Board or the Public Trustee’s Office (PTO) over the last five years. Around 2% are unclaimed.

The vast majority of deceased members had made nominations as to who they wish to receive their unused CPF monies. Their monies were distributed to beneficiaries according to these nominations. This is typically done within a month of CPF Board being notified of the member's passing by the Immigration and Checkpoints Authority and where the nominees’ bank details have been submitted.

Mr Chong asked about the profile of those who nominated, compared to those who did not. The clearest difference is that members below the age of 45 who pass away are much less likely to have made a nomination. But even if a member did not make a nomination for anyone to receive his unused CPF monies, it may still be distributed to his next-of-kin according to the intestacy and Muslim inheritance laws.

How does this happen? CPF Board will pass the monies to the PTO typically within three weeks of notification of the member’s passing. The PTO will then trace and search for the next-of-kin. The Ministry of Law will be answering a separate question on the efforts taken to return the un-nominated CPF monies to members’ next-of-kin.

The second question is whether unclaimed CPF monies are then forfeited? The answer is again no. As MinLaw will explain in greater detail, next-of-kin can approach the PTO at any time to submit their claims. There is no time limit for them to do so.

The third question is whether CPF Board makes an effort to reduce incidence of unclaimed monies. The answer is yes, absolutely. The CPF Board adopts a three-pronged approach. First, educating members; second, reminding members regularly; and third, making it easy for members to nominate.

Firstly, education. The CPF Board raises awareness on the importance of making a CPF nomination through annual island-wide CPF roadshows. It also works with other industry stakeholders, such as lawyers and insurance agents, to advise their clients on making a CPF nomination.

Secondly, to remind members regularly, the Yearly Statement of Account given to all CPF members highlights in text whether or not the member has made a nomination. If one has been made, the CPF Board also lets the member know when the nomination was made, in case the member wants to change his mind.

Members may be aware that CPF Board runs a CPF Retirement Planning Service for members before they reach age 55 and a second time before they reach age 65. At these planning sessions, if a member has not already made a nomination, the CPF Board officer will remind the member.

Thirdly, as Ms Foo Mee Har alluded to in her question, the CPF Board strives to make it easy for members to nominate. At the CPF Retirement Planning Service, if a member decides to make a nomination, it can be done on the spot. Today, a nomination can be made in-person at any of the CPF Service Centres, or via post. The CPF Board is also exploring providing a new electronic nomination system in the first quarter of next year. In 2018, CPF Board processed about 120,000 nomination applications, more than double the 50,000 nominations made in 2013.

To Mr Chong’s question, what if a member has no next-of-kin? For members on the Retirement Sum Scheme, the payouts are computed taking into consideration life expectancy, which is unrelated to whether a person has next-of-kin. Therefore, such members may wish to join the CPF LIFE scheme and choose the Standard Plan which generally offers higher payouts for life. After all, they have no next-of-kin to fall back on if they outlive their savings. At the same time, we focus on helping every member get their nominations done well in advance.

Mr Seah Kian Peng (Marine Parade): I thank Minister for her answers. I am quite sure, in terms of CPF going out to encourage everyone to make nominations, this has been on-going. The fact is that there is still 2% of CPF members who have yet to make nominations. From your earlier answers, it appears that it is the younger ones who have not made nominations. I wonder and I would like to ask the Minister whether 2% – it does not appear as a big number – but when you aggregate it across, it could be 30,000, 40,000 members who have not made nominations.

Would Minister consider, making it such that nominations are almost automatic? For those who are not married, perhaps, it could automatically go to their parents? Just to make it even easier, if they choose to make new nominations, that could be done at the time that the member chooses to do so. As against now – notwithstanding all the reminders, statements to inform the CPF members that they have not made a nomination – it goes unnoticed and it remains a case where they have not made a nomination. Would the Minister consider such a suggestion?

Mrs Josephine Teo: Mr Speaker, I thank the Member Mr Seah Kian Peng for his suggestion. I think if we break down what the problem really is, as long as the person has a next-of-kin, even if the person did not make a nomination, the Public Trustee's Office will try and search for the next-of-kin and trace the person's whereabouts and make an effort to return the unused CPF monies. So, where there is actually someone, that you can give the money to, even if the person did not make the nomination, that is not the most difficult thing. The most difficult thing is where, there is a next-of-kin but we have difficulty tracing them. The correct thing to do, is therefore, to make sure that the monies are never forfeited. The person could be overseas, the next-of-kin may have lost touch with the deceased member and may not even be aware that the person has passed away and that there is unused CPF monies to be distributed.

There is a very small group, where even with the best efforts, the Public Trustee's Office will have difficulty tracing. The question of how to deal with this group, really is not so much a matter of nomination, is whether we can find more effective ways to do the trace and search. There is also another question, that has been posed to MinLaw and I would like to suggest that perhaps, we can let MinLaw answer that question and then we can follow up.

Mr Chong Kee Hiong (Bishan-Toa Payoh): Speaker, Sir, I have two supplementary questions. First, Minister mentioned about the roadshow to inform people about the nomination. I would like to ask whether MOM could have a specific outreach to members who have not made nominations, rather than roadshows which a lot of people would ignore unless it is very specific to them. The second supplementary question is, my colleague, Ms Foo Mee Har, had also in October this year, raised the question on whether MOM could increase payout under the Retirement Sum Scheme. I would like to check whether the Minister has any updates on this.

Mrs Josephine Teo: Mr Speaker, to Mr Chong Kee Hiong's question on whether we can make personalised outreach, the answer is yes. We already do so, through the yearly Statement of Account. Can we make it more prominent, the answer is yes. However, at the end of the day, I am also mindful that people need to think a little bit about who they wish to nominate and the appropriate thing to do therefore, is that, when they are ready to do so and to enable them to so in a seamless manner.

I think from the statistics, it is quite clear that it is the younger individuals, who may not have thought so much about it and therefore, they have not made a nomination. What we intend to do, is to make this nomination process even more easy for younger persons who are very tech savvy, through a technology platform, perhaps they will find that maybe if they make a nomination today and tomorrow, they change their mind, it is not so difficult to do as well. This electronic means of doing so, we will be launching in the first quarter of next year, so I am hopeful that it will help to promote nominations.

To Mr Chong Kee Hiong's second question on the Retirement Sum Scheme payouts. Mr Speaker, may I have your permission to take it within my Second Reading speech later in the sitting, that deals with the CPF (Amendment) Act.

Mr Speaker: Okay, please do. Ms Sylvia Lim.

Ms Sylvia Lim (Aljunied): Thank you, Mr Speaker. I have a supplementary question for Minister for Manpower. That is about the trigger point for distribution of CPF monies, meaning the death of the member. We do understand of course, if the member died in Singapore, there is a death certificate issued and CPF Board is quite efficient actually in notifying the beneficiaries. But, is there any inter-governmental procedure if the person were to die overseas? Do governments frequently exchange information about deaths of nationals that have occurred overseas that may be relevant, say to Singaporeans dying, say in Cambodia or Thailand, for example?

Mrs Josephine Teo: Mr Speaker, it would not be unusual for foreign governments to inform us if someone were to have passed away. Sometimes, they may not inform relevant parties in Singapore, they may inform our missions overseas. And our missions overseas can then get in touch with the CPF Board. But, most likely, it is the next-of-kin who would trigger the payouts so the rest of the processes follow. As Ms Sylvia Lim explained, usually it is quite efficient, but if she is aware of any specific cases where these disbursements have not been done in a timely manner, I invite her to let me know about it and I would be happy to look into that.