NATIONAL LIFELONG INCOME SCHEME (CPF LIFE)

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NATIONAL LIFELONG INCOME SCHEME (CPF LIFE): **

(Implementation): **

58.

Mr Ong Ah Heng asked the Acting Minister for Manpower (a) whether Singaporean workers now have better savings in their CPF accounts and are better prepared for retirement; (b) when will the National LIFElong Income Scheme (CPF LIFE) be implemented and how many workers above 50 years of age are likely not to be in the position to join the Scheme; and (c) how is the Ministry going to encourage Singaporeans with little or no CPF savings to join the CPF LIFE.

Mr Gan Kim Yong: The CPF savings of our workers have been steadily increasing over the years. Active CPF members turning 55 in 2007 had median CPF savings of $65,000 in cash before withdrawal, compared with $60,000 in 2003.

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Three major changes were introduced last year to better prepare CPF members for retirement. First, to help members stay employed longer, we will implement re-employment legislation by 2012. Older low wage workers are further encouraged to work through the Workfare Income Supplement Scheme. Second, we have increased the returns to CPF savings by applying a 1% extra interest on the first $60,000 of a member's CPF savings. This has taken effect from January this year. Third, we announced CPF LIFE to make members' CPF savings last for a lifetime.

There is no requirement to have a minimum balance to join CPF LIFE. However, CPF members aged 50 or younger in 2008 and having at least $40,000 of CPF savings at age 55, will be automatically included. This will start in 2013 when they turn 55. All other members, including those above 50 this year, can still be included if they opt in to CPF LIFE. We will announce opt-in details later as the implementation of CPF LIFE is still being worked out.

To help members with lower CPF savings, we will provide a one-off LIFE Bonus ("L-Bonus") of up to $4,000 for members in the first five cohorts who turn 55 from 2013. They are aged 45 to 50 this year. The L-Bonus will also be extended to those aged above 50 this year who opt in. Eligible members can also choose to monetise their flats under the Lease Buyback Scheme in order to purchase a CPF LIFE plan. In addition, we have liberalised the MS Topping-Up Scheme this year so that family members, and even friends and employers, can top up the accounts of CPF members. This will help them to have a higher income from CPF LIFE.