DIVERSION OF CPF CONTRIBUTIONS TO MEET MINIMUM SUM

DIVERSION OF CPF CONTRIBUTIONS TO MEET MINIMUM SUM

40.

Mdm Ho Geok Choo asked the Minister for Manpower in view of the partial restoration of employers' CPF rate and the CPF contributions being channelled into the Medisave and Special Accounts, whether there is room for flexibility by diverting the contributions to top up employees' Minimum Sum requirements first and when an employee's Minimum Sum requirement is fulfilled, then it be channelled to the Medisave and Special Accounts.

Mr Gan Kim Yong: When a CPF member turns 55, his Special and Ordinary Accounts balances will be transferred to his Retirement Account to make up his Minimum Sum. Therefore the 0.5% increase in Special Account contributions will help members meet their Minimum Sum requirement.

The other 0.5% increase in Medisave contribution will help a member attain the Medisave Minimum Sum, which will cater for member's healthcare costs in retirement. If Medisave balances reach the Medisave Contribution Ceiling, which is set $5,000 above the Medisave Minimum Sum, the excess contributions will be channelled to a member's Special Account or Retirement Account which will again help members meet their Minimum Sum requirement.

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