CPF top-up, payout procedures to be tweaked, along with plans for higher retirement and re-employment ages

CENTRAL Provident Fund (CPF) top-up and payout procedures are set to be further streamlined, under legislative changes debated in the House on Monday (Nov 1).

Singapore is also on track to raise the statutory retirement and re-employment ages next July, as proposed by a tripartite workgroup in 2019, with the upcoming passage of the Retirement and Re-employment (Amendment) Bill after a round-up speech on Tuesday.

Citing the concept of re-employment, Manpower Minister Tan See Leng said: "These innovations in our labour market have helped allow our seniors to remain economically active... This has helped more of our senior workers earn more and save more."

Under the latest proposed policy shift, remaining CPF Ordinary Account and Special Account savings will be automatically disbursed to members whose Retirement Account savings have run dry, so they will no longer have to make a separate application to transfer the funds and keep receiving payouts.

Some 83,000 CPF members are expected to benefit from the planned adjustment, which is slated to kick in during the first quarter of 2022.

Other changes include raising the combined tax relief cap for the Retirement Sum Topping-Up and Voluntary Contributions to MediSave Account schemes to S$8,000 for top-up givers, effective Jan 1, 2022. The previous cap for Retirement Sum Topping-Up was S$7,000, while tax relief for voluntary MediSave top-ups went to recipients, not givers.

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Meanwhile, top-ups under Voluntary Contributions to MediSave Account would be capped across the board at the Basic Healthcare Sum - rather than taking the limit as the lower of either the CPF Annual Limit of S$37,740 or the Basic Healthcare Sum of S$63,000, as is the case now.

Also, members' funds would be retained for no longer than 6 months after their deaths from April 2022 onwards, compared with as long as 7 years now.

The Ministry of Law plans to allow relatives of a CPF member who died without nominating account monies to appoint a "beneficiary representative" from the second quarter of 2022 onwards. The representative can submit a consolidated claim for the funds in the dead member's account, as long as the monies are not more than S$10,000.

Otherwise, all eligible beneficiaries must still submit their information to the Public Trustee's Office, as is now the case for unnominated sums of any amount.

Separately, the statutory retirement age is now scheduled to go from 62 to 63 from Jul 1, 2022, while the re-employment age will go from 67 to 68. The maximum retirement age under the law would be set at 65, and the maximum re-employment age at 70.

"Naturally, employers who wish to move faster are free to do so," Dr Tan added. "In fact, the public sector has already taken the lead, by implementing a retirement age of 63 and a re-employment age of 68 one year earlier."

Singapore also already offers grants to encourage employers to raise internal retirement and re-employment ages above the statutory level, and to give senior workers more part-time work options, the minister noted.

Meanwhile, the CPF contribution rate for workers aged 55 to 65 would go up by 2 percentage points on Jan 1, 2022, and the rate for workers aged 65 to 70 will go up by 1.5 percentage points.

That's after the Covid-19 pandemic held back the raise by a year, in a delay that Dr Tan said reflected "the strength of Singapore's tripartism model". There are no imminent changes to CPF withdrawal rules, such as the minimum lump-sum withdrawal age of 55 and the automatic retirement payout age of 70.

"Workers  have the assurance of continued employment up till the statutory re-employment age if they are able and wish to do so," said Dr Tan. "At the same time, businesses have  sufficient flexibility to adjust re-employment terms, enabling them to continue providing employment opportunities to our senior workers while remaining  competitive."