Friday, 13 October 2017

Singapore women's CPF savings go up, narrowing gender gap

It is a reassuring sign that women can better meet their retirement needs, say experts
By Joanna Seow, The Straits Times, 12 Oct 2017

Singapore women's nest egg for retirement is growing at a faster pace than men's, Central Provident Fund (CPF) Board figures show.

Experts attribute it to a shift towards women holding better-paying jobs and working longer these days, and the easing of rules to encourage more husbands to top up their wives' CPF savings.

Over the past 10 years, women's average balance rose by 8.3 per cent a year against 7.7 per cent a year for men. This refers to savings in their Ordinary, Special, Retirement and Medisave accounts.

As a result, the gap in average CPF balances between women and men narrowed from 16 per cent in 2006 to 11 per cent last year - a reassuring sign that, increasingly, women can better meet their retirement needs.

The trend could help women enjoy a higher standard of living in their senior years and lower the financial pressure on their children and the national budget, said National University of Singapore (NUS) sociologist Tan Ern Ser.

He believes these children, being less likely to be part of the sandwiched generation that have to take care of both the old and young, would be inclined to have more children themselves.

The rise in women's balances is largely fuelled by job-related factors, such as higher wages and the growing proportion of working women, said NUS economist Chia Ngee Choon.

Sociologist Kang Soon-Hock of the Singapore University of Social Sciences said there are now more initiatives to encourage women to remain in or return to the workforce. Flexible work arrangements, for example, are more widespread.

Ms Mayda Jutahkiti, 43, an account director at Rice Communications, said she rejoined the workforce full time last month after four years as a stay-at-home mum.

"I was also a little worried about my retirement savings, given all the news about the rising cost of living," she added.

Also, more husbands are contributing to the CPF savings of their wives, a move encouraged by a change in the CPF transfer rule.

Last year, the minimum amount members must save before they could transfer excess savings to their spouses was halved.

In all, $110 million moved between spouses last year, double the previous year's amount. Almost 90 per cent of these transfers last year were from men to women, said the CPF Board.

Last week, the Manpower Ministry proposed changes to the CPF Act to lower the threshold for children to transfer funds to their parents and grandparents' accounts.

Cash top-ups to CPF accounts of family members also get tax relief.

Mr Wong Chee Yong, 41, a professional in the finance industry, said that in the past few years, he had put $14,000 in cash into his mother's account. She quit being a seamstress about 15 years ago.

"It is good for older folk to have more money for retirement. In the event that my sister and I lose our jobs, my mum can still have a source of income," he said. "Topping up her retirement savings is a way to thank her for her care."

Looking after wife's later years via CPF transfers
By Joanna Seow, The Straits Times, 12 Oct 2017

Until six years ago, Madam Ng Ah Choo's Central Provident Fund accounts hardly had any money. The 58-year-old had stopped working soon after she married in 1988 to be a stay-at-home mum.

In 2011, her husband, Mr Yang Chin Hong, 61, transferred some of his CPF savings to her account to provide her with a steady income in her later years.

Mr Yang, a resident technical officer who inspects buildings, has also been topping up both their accounts with cash.

He has been working in the same line for the past 40 years and now, the two of them have about $166,000 each in their accounts - the prevailing full retirement sum recommended by the Government for those turning 55 this year.

He earns about $4,700 a month, and has used about $500,000 of his CPF savings over the years to pay for their five-room flat in Redhill.

Mr Yang hopes to contribute even more to their accounts so that he and his wife can get bigger monthly payouts later from their retirement accounts.

"It is another way for us to have a comfortable retirement because when we are not working, at least we will have a minimum payout to keep us going," he said.

Madam Ng said she was glad her husband topped up her retirement savings. "He really cares for my future."

CPF Board figures show women's average retirement savings in their CPF accounts have risen in the past decade, at a faster pace than men's.

Some contributing factors include the extra help women are receiving to stay employed and measures that encourage spouses to top up their wives' accounts.

For Mr Yang and Madam Ng, being self-sufficient is their way of continuing to look out for their two daughters, aged 26 and 23.

Mr Yang said: "We plan to take care of ourselves. Nowadays, the cost of living is quite high, so we let them plan their own future without worrying about us."

He added: "I think as long as people live within their means, they should be able to do it."

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