Thursday, 4 February 2016

CPF statements give clearer picture of accounts

By Joanna Seow, The Straits Times, 3 Feb 2016

The 3.7 million Central Provident Fund (CPF) members who are in the process of receiving their yearly statement will notice a makeover.

Instead of row after row of numbers, the first page shows a colourful graphic summarising their total savings and the interest they earned in the past year. It also explains the various sources of input into the accounts, such as contributions from work, refunds and government support.

The next page shows an infographic breakdown of the amounts debited from members' accounts in the past year, categorised into various uses such as housing, healthcare and investment.

The CPF Board said yesterday it made the changes after a series of focus group discussions with members last year.

"We hope the illustrated summary can help members better understand the various contributions to and uses of their CPF balances, and will enable them to make informed financial decisions," said Ms Ong Woei Jiin, the board's director of member accounts services.

The board is also sourcing feedback via an online survey which allows users to highlight areas in the statement they find confusing.

Previously, the annual statement listed every transaction for the year. But it was up to readers to tally the amounts in the different categories.

Members will still receive the transaction list, in an updated font, at the back of the summary.

"I thought it was an advertisement at first because it's so colourful," quipped 60-year-old quantity surveyor Leu Fook Teong.

He gave the new format a thumbs up: "Last time it was just lines of numbers like an office report. Now it shows my total investment returns and medical spending, and I don't have to go add it up myself."

For those below the age of 55, a portion at the end of the summary page indicates how much more interest they stand to earn by the time they are 65 years old if they transfer $1,000 from their Ordinary Account to the Special Account. The Ordinary Account has an annual interest rate of at least 2.5 per cent, while that of the Special Account is at least 4 per cent.

The more than three in 10 CPF members aged 55 and up will see information about monthly payouts under either the CPF Life scheme or the Retirement Sum scheme.

West Coast GRC MP Foo Mee Har said the new summary page allows people to see at a glance how much interest they are earning on their savings. The new format could also help them see if the amount put aside for retirement is too little.

She said: "The areas listed are a good reminder to help Singaporeans get to know their CPF well... and fully optimise their CPF savings."

You'll be receiving something new in the mail from us soon. We have revamped our CPF Yearly Statement of Accounts to...
Posted by CPF Board on Wednesday, February 3, 2016

Proposals on CPF payouts, returns will take more time
'Complex investment issues' lead to new target deadline - by first half of this year
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 3 Feb 2016

Proposals to improve Central Provident Fund (CPF) payouts and returns, targeted to be ready by mid-2015 and deferred till late last year, will now only be ready by the first half of this year.

The Ministry of Manpower told The Straits Times yesterday that these recommendations by a government-appointed panel will take more time to prepare because "investment issues are technical and complex".

In February last year, the CPF Advisory Panel recommended tweaks that included letting CPF members tailor different levels of savings and payouts. It said then that proposals to boost returns and payouts were in the works and would be ready by the middle of last year.

In July, panel chairman Tan Chorh Chuan said that the process would take longer and a new date was set for the end of last year.

Yesterday, the Manpower Ministry gave a new deadline - the first half of this year. The ministry spokesman, who was responding on behalf of the review panel, would not be drawn into giving a more specific timeframe.

"As investment issues are technical and complex, the panel has taken more time to study this issue in depth," the spokesman said.

"This includes engaging the services of an independent consultant to assist with the modelling for the various investment options being considered," he added.

The extra time will also allow the panel to study feedback from focus group discussions and industry consultations, the spokesman said.

The 13-member panel was appointed in September 2014, after Prime Minister Lee Hsien Loong announced the CPF system review in his National Day Rally speech. The panel, which consists of academics, financial experts and representatives from unions, the social sector and the grassroots, was directed to study how the compulsory scheme could give members more say and greater security in retirement.

One area under study was how the Minimum Sum should be adjusted to give members better monthly retirement payouts for life. Another area is enabling bigger lump-sum withdrawals upon retirement.

Last February, the panel recommended letting members set aside three different sums at age 55 - a basic sum of $80,500, a higher sum of $161,000 or an enhanced sum of $241,500 - giving them monthly payouts of between $650 and $1,900 from age 65. It also recommended a lump-sum withdrawal at age 65 of up to 20 per cent of CPF savings. The Government has implemented the changes.

The delay in the second set of recommendations did not faze Government Parliamentary Committee for Manpower chairman Patrick Tay.

"Retirement adequacy is an important issue," said Mr Tay. "It is more important that the panel puts together a robust system that meets the needs of Singaporeans."

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