Review of CPF Basic Retirement Sum Requirements in Light of Economic Crisis Caused by COVID-19 Pandemic
Ministry of ManpowerSpeakers
Summary
This question concerns the inquiry by Mr Gerald Giam Yean Song on whether CPF Basic Retirement Sum (BRS) requirements will be reviewed following the COVID-19 economic crisis. Minister Mrs Josephine Teo explained that BRS is based on long-term retiree expenditure and inflation rather than short-term fluctuations. She stated the Government’s priority is sustaining employment and CPF contributions through initiatives like the Jobs Support Scheme and SGUnited Jobs and Skills Package. Minister Mrs Josephine Teo also noted that members with insufficient savings are not required to top up in cash and can access relief like mortgage deferments. She concluded that BRS will be reviewed regularly to ensure retirement adequacy, noting that existing rules allow for specific CPF withdrawals at ages 55 and 65.
Transcript
51 Mr Gerald Giam Yean Song asked the Minister for Manpower whether the CPF Basic Retirement Sum requirements for the cohort of Singapore residents turning 55 years of age in 2021 or later will be reviewed in light of the economic crisis caused by the COVID-19 pandemic which has affected CPF contributions.
Mrs Josephine Teo: The Basic Retirement Sum (BRS) provides members with monthly payouts that cover basic expenses throughout their retirement years. CPF members aged 55 and above can withdraw up to $5,000 from their CPF savings, or more if they have set aside their Full Retirement Sum or BRS, with property pledge. For members turning age 65 from 2023, they can also withdraw up to 20% of their Retirement Account savings1 upon reaching age 65. Members who have less than their BRS are not required to top up their CPF accounts in cash.
BRS takes reference from the actual expenditure of lower-middle quintile retiree households and is adjusted for long-term inflation and some improvements in standard of living. It reflects the long term needs of the member rather than short term fluctuations.
We understand many Singaporeans face financial difficulties in this current environment. Our priority is to help Singaporeans stay employed to continue receiving CPF contributions. This is in line with the guidelines issued by the National Wages Council, which strongly encourage employers to retain employees through cost-saving measures, retraining and redeployment to new jobs within the company. The Government has also provided targeted assistance to save jobs and livelihoods such as through the Jobs Support Scheme, which provided salary support to help companies to retain employees. We have also ramped up job redesign reskilling and redeployment programmes as part of the SGUnited Jobs and Skills Package.
Apart from the above support, the COVID-19 Support Grant and Self-Employed Person Income Relief Scheme have also helped Singaporeans with short-term cash flow support. Lower income workers and households get more support through the Workfare Special Payment and grocery vouchers. The HDB and banks are providing mortgage relief to flat owners who faced difficulties paying monthly instalments in cash or using CPF.
We will continue to review BRS keeping in mind the long term retirement needs of Singaporeans.