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440,000 CPF members qualify for matched top-ups show the dark side of the CPF scheme

“440,000 CPF members qualify for matched top-ups” (Straits Times; 7 Jan 2021) is good news for the New Year.

But this also unveiled the dark side of the CPF scheme.

According to the CPF Board chief executive Augustine Lee, “About half of CPF members turning 55 today have yet to attain the Basic Retirement Sum. This matching grant by the Government will encourage them to save more with CPF.”

This CPF matching scheme was first announced by DPM Heng Swee Keat in his Budget speech on Feb18 2020 and scheduled for implementation in 2021.

This Matched Retirement Savings Scheme (MRSS) is targeted at Singaporeans aged 55 to 70, who have not met the prevailing Basic Retirement Sum (BRS), among other criteria. The prevailing BRS for 2021 is $93,000 which is adjusted annually by 3% per year for the next two years like “a moving escalator”. In fact, “the BSR has increased by 3% per year since 2017, while household incomes per capita have risen by an average of 4.1%, in nominal term.”

It is easy to understand the government’s objective on the surface – to encourage anyone,
including family members, employers or members of the community, to make top-ups to a person’s Retirement Account. Each dollar of cash top-up will be matched by the Government for the next five years, capped at $600 per year or a total government contribution of $3000 to each of the 440,000 CPF members provided they have received some top-ups to their Retirement Accounts.

Ms Sim Ann, Senior Minister of State for Communications and Information and National Development and Adviser to Bukit Timah grassroot organization, made a top-up to a 62-year-old hawker without disclosing the actual amount.

This new scheme will disadvantage the low income Singaporeans without financial ability to make cash top-ups as they will not obtain any matching top-ups by the government. If they have higher incomes, probably they will not be one of the 440,000 CPF members.

The target age group of 55 to 70 were those born between 1966 and 1951, an age group younger than the Merdeka Generation born between 1959 and 1950) and the Pioneer Generation (born 1934 or earlier and 1949).

To forestall any complaints from the MGs and PGs, the government enhanced the Silver Support Scheme (SSS) with broader eligibility criteria and higher payouts of 20% increase in the quarterly cash payouts for the elderly. This SSS targets the bottom 20% of Singaporeans aged 65 and above, numbering about 100,000 seniors.

While the superficial reason for introducing the Matched Retirement Savings Scheme (MRSS) is to encourage cash top-ups for a segment of the population younger than the MGs and PGs, I believe the underlying objective is politics.

The new year 2021 is perfect timing to launch a seemingly social scheme to target a relatively young population for five years, leading up to the next General Election in 2025. For the PAP government to use the CPF Scheme for politics is unacceptable.

More importantly, this MRSS target group is made up of 806,890 residents or more (between aged 55 to 69) out of a population of 5.7million in 2019. The older population aged 70 to 90 and over numbered 360,390 and fast shrinking due to age.

Going forward, I would expect to see more attention and social assistance given to this younger cohort for a political agenda rather than trying to improve their livelihood as they age.

Alternative parties may have no options but to start activities to nurture this younger cohort for the coming GE if this is what the PAP government is doing.

 

Kok Ming Cheang

 

 

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8 Responses to “440,000 CPF members qualify for matched top-ups show the dark side of the CPF scheme”

  • Sinkies are saintly:

    For Sinkies to be happy with this matched top up, they have to be saintly. Why?

    A person has to give up $600 cash a year, then the gov update his CPF account with another $600. Gov does not need to put in cash. Just an accounting update to those slavery, i mean, special, bond.

    This money gets locked up and slowly gets released back when the person is very old. If the person dies before getting every dollar back, some money will be contributed into the general pool. Right?

    What is there to be happy about?

    Think big lah. Good countries give big pensions monthly. Absolutely free.

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  • #06-191 Sor Hais:

    They are not returning you the full amount unconditionally at 55 yo. Still ask people to put money inside. Haiz…

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  • Very sneaky:

    Quite fishy. Dunno what theyre up to again.
    All i can think of is that this gov needs money and lots of it to use since losing bil$ in o/s investments lately(msia n india)..and what easier way than rob from our cpf monies?
    I feel the truth of this hidden agenda will be unfolded in the coming months. Tweaking of cpf rules and payouts too perhaps., their favourite pass time to make us suffer!
    Never be happy when our gov gives you money..instead be afraid, be very afraid!

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  • What is that worth?:

    #06-191 Sor Hais:
    They are not returning you the full amount unconditionally at 55 yo. Still ask people to put money inside. Haiz…

    Qualifying condition: not enough basic retirement sum, and now 55 years old or older.
    That means your $600/yr cash will be locked up until 65yr or 70yr or any later year they want to impose, and returned to you in small monthly amounts.

    According to the CPF estimator, with the additional $3000 cash +$3000 matched, the additional cpf life payout is only $60 a month. Since half is your own original cash, the gov matched top up scheme is only worth $30/mth, 10 years down the road. Assuming inflation of 3% a year, that is really little.

    Not a big deal.

    Another way is to look at the value down. $600 a year matched up is less than $2 a day. A cup of coffee? This gov is really cheapskate when it comes to helping the old.

    People please demand for $1000 a month free pension. The reserve can very easily support that. We deserve it after contributing to the reserve for half a century. Furthermore, much of the reserve comes from creaming off our CPF investment returns. It’s our money!

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  • Big propaganda. Big deal?:

    A big propaganda to show the gov effort.

    ST: The move to help more older CPF members attain the Basic Retirement Sum and provide them with retirement adequacy comes through the Matched Retirement Savings Scheme, which will benefit some 440,000 people.

    Wow. Provide retirement adequacy.
    Wow. Will benefit 440,000 people.
    Wow. Sim Ann contributes for a stranger.
    Wow.
    Wow.

    After getting the full benefit of this great scheme, a retiree will get a big extra CPF Life payout of $1 a day, that’s right, one dollar a day.

    Did any of the news report the actual benefit?

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  • NZ Super pension!:

    Let’s look at what pension New Zealand old folks are getting.

    https://www.workandincome.govt.nz/eligibility/seniors/superannuation/payment-rates.html

    Single: more than $20,000 a year.
    Married, both total: more than $30,000 a year.

    This is absolutely free, regardless of work or wealth, for the people. As long as they have stayed in NZ for certain number of years.

    Sinkies are so poor poor thing. $0 pension from the world’s highest paid government.

    61%, what have you voted for? Voting yourself into poverty.

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  • Daft:

    1st,how come so many people not working 30 years ago.

    2nd Lee,what happen???

    3rd…4th…..

    Finally, how?

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  • Can no longer trust them:

    Just imagine..
    A huge number of our citizens cant reach the min.sum.
    So who is to blame?
    Gov letting in planeloads of foreigners and our people losing jobs to these aliens!
    No jobs so how to contribute to cpf…???
    but gov still deducting from the jobless n retrenched their medisave to fund medishield …another ripoff scheme!
    This gov are the real free riders…riding on good hardworking sgs…
    Freeloaders in fact!!

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