Friday 8 January 2021

Matched Retirement Savings Scheme: 440,000 CPF members eligible for new scheme with government matching retirement account top-ups from 2021

Govt will match cash top-ups of up to $600 a year in their CPF Retirement Account for 5 years from 2021 to 2025
By Sue-Ann Tan, The Straits Times, 7 Jan 2021

Thousands of people are set to get matching sums of up to $600 a year to top up their Central Provident Fund (CPF) Retirement Account, under a new scheme which kicks off this year.

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. They account for about 53 per cent of CPF members aged between 55 and 70, said the CPF Board yesterday.

The scheme allows 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.

Top-ups can be made on the CPF website or mobile app. They also do not have to be made in a lump sum. This means that those who make small and regular top-ups throughout the year using Giro can receive the matching grant.


CPF Board chief executive Augustin Lee said: "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.

"There's no better savings interest rate than what CPF pays now. We hope their loved ones and the wider community can also pitch in. Even small amounts saved consistently can go a long way in securing CPF members' retirement needs."

Those who are eligible for the scheme must be between 55 and 70 years old, and have less than the Basic Retirement Sum of $93,000 this year in their Retirement Account.

Other criteria include average monthly income, annual value of their residence, and property ownership.

Eligible members will be notified by the CPF Board this month. They can also check their eligibility on the CPF website.

Ms Selena Ling, OCBC Bank's head of treasury research and strategy, said: "Retirement adequacy concerns are increasingly pertinent for an ageing population like Singapore's... While current inflationary pressures are mild due to the pandemic, nevertheless, inflation levels are expected to return to positive territory this year and Singaporeans are also living longer."

Associate Professor Lawrence Loh from the National University of Singapore Business School added: "The matching incentive will help develop a habit of augmenting the retirement funds early in the CPF contributor's life."

The CPF Board is also partnering grassroots leaders to encourage the community to build up the retirement savings of the vulnerable.

Donors from Bukit Timah pitched in to help 100 residents, with the first batch of top-ups made yesterday.

Ms Sim Ann, adviser to Bukit Timah grassroots organisations, said: "Not everyone might have the cash to do the top-up. This is the reason why I feel there is a part for kind strangers to play in this process."

Ms Sim, who is also Senior Minister of State for Communications and Information, and National Development, made a top-up to the account of Madam Salmiah, a 62-year-old hawker.

Another beneficiary, Mr Lau Eng Kwee, 67, stopped work as a hawker in 2019 due to cancer. He has to support two adult children with learning disabilities and his wife. He said: "My family depends on me so these CPF payouts are useful in helping me to go on."
















Keeping retirement adequacy in mind
The Straits Times, 9 Jan 2021

It is heartening that thousands of people are set to get matching sums of up to $600 a year to top up their Central Provident Fund (CPF) Retirement Account. 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 about 440,000 people. They account for about 53 per cent of CPF members aged between 55 and 70. Anyone, including family members, employers or members of the community, can 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 a year.

The scheme draws attention to about half of CPF members turning 55 today who have yet to reach the Basic Retirement Sum. The matching grant by the Government will encourage them to save more with the CPF. It is a worthwhile gesture because it emphasises the importance of retirement adequacy in an individual's life plans. The CPF is key to ensuring that adequacy, along with upholding the infrastructure of healthcare, home ownership, family protection and asset enhancement. Taken together, these provisions constitute a comprehensive social security system that is essential for personal financial and physical well-being in an affluent but expensive society.

Given the CPF's attractive savings interest rate, it makes sense to use that channel to stretch the retirement dollar. Unfortunately, personal circumstances sometimes make it difficult for Singaporeans to achieve the Basic Retirement Sum. Here, even small amounts saved consistently can make a difference in the long run. Although the top-up scheme is not new, the latest initiative is a welcome addition to it.


The importance of retirement adequacy is amplified by Singapore's transition to an ageing society. One in two Singaporeans aged 65 today is expected to live to the age of 85 and beyond, and one in three is expected to live to 90 and beyond. CPF savings can provide them with a monthly income to meet their basic living expenses in old age. Those on CPF Life will receive a monthly payout for as long as they live. Supplemented by personal savings, affordable homes that are fully paid up for on retirement, and sufficient savings for future medical expenses in old age, the CPF offers peace of mind to the elderly. That is an invaluable feature of the quality of life that they seek in their golden years.

Even with the CPF around, the need for financial responsibility lies firmly with the individual. Keeping discretionary spending within bounds during working lives, being judicious in the purchase of homes, and taking the need for a healthy lifestyle seriously offer protection from economic challenges in old age.



















*  70,000 CPF members to get $40 million in matching grants from the Government in January 2022 for top-ups to their retirement accounts
By Prisca Ang, The Straits Times, 18 Aug 2021

Seventy thousand Central Provident Fund (CPF) members will receive about $40 million in matching grants from the Government in January next year for cash top-ups made to their Retirement Account (RA) in the first half of this year.

The top-ups and matching grants will increase their monthly retirement payouts, said the CPF Board on Wednesday (Aug 18).

They will get the grants under the Matched Retirement Savings Scheme, which was launched earlier this year to help seniors who have yet to meet the prevailing basic retirement sum save more for their retirement.

Every dollar of cash top-ups put into eligible members' RA will be matched by the Government, up to an annual cap of $600. Anyone can make the cash top-ups for eligible members.


For a start, the scheme will run for five years, from this year to 2025. No application is needed, with eligible members notified in January via e-mail, SMS or post.

CPF Board said in January that 440,000 people are eligible for the matched top-ups.

They make up about 53 per cent of CPF members between 55 and 70 years old, the board said then.

Those who are eligible for the scheme must be within that age range and have less than the prevailing basic retirement sum - or $93,000 this year - in their retirement account.

Other criteria include average monthly income, annual value of their residence and property ownership.

The scheme was announced in the Budget last year. Then Finance Minister Heng Swee Keat said at the time that it will help to encourage and augment family support for seniors with fewer means in retirement.

Having financial assurance in retirement can help Singaporeans age with confidence, he said, given that Singapore's life expectancy at birth is close to 85 years, the longest in the world.

Eighty per cent of the 70,000 CPF members who will get matching grants for the top-ups made between January and June had received such top-ups for the first time.

Ninety per cent of the 70,000 had received top-ups of $600 or more and 40 per cent had gotten the top-ups from their loved ones, with the majority of the top-ups coming from their children.

Mr Jeffrey Lee, a tutor in his 20s, has been topping up $50 each month for both of his parents since the start of the year.

"My parents have little CPF savings in their RA, and the (scheme) will help them build up their retirement nest egg... every dollar counts when it comes to retirement planning. This is especially so for parents who have started saving later," he said.


Ms Ong Woei Jiin, director of CPF Board's retirement savings department, said: "For other eligible members who have yet to make top-ups, we strongly encourage them and their loved ones to do so as soon as possible, as these top-ups and matching grants will allow members to enjoy higher monthly payouts in retirement."

Cash top-ups to the RA of CPF members who are eligible for the scheme will have to be made before the end of this year in order for them to receive the matching grant, which will be credited to them in January next year.

Members can top up their accounts via the CPF website or myCPF mobile app. They can go here for more details.


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