CPF MINIMUM SUM

CPF MINIMUM SUM:

(Deferment of withdrawal of CPF monies): 21.

Mrs Josephine Teo asked the Minister for Manpower over the last five years (a) what percentage of active and inactive CPF members were able to meet the Minimum Sum at the age of 62; (b) what is the median shortfall for those who did not have the Minimum Sum at the age of 62; and (c) how many of such members opted to defer withdrawal of CPF monies so that their future drawdown period can be extended.

The Minister for Manpower (Dr Ng Eng Hen): Mr Speaker, Sir, can I beg the Member's indulgence? She has asked for

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data for the last five years' cohorts, but because CPF rules with regard to Minimum Sum and other aspects may be different for each cohort, I will give information for the most recent cohort who reached 62 years last year.

First, let me provide data for those who are active members who have been contributing regularly. Of the 7,100 active members who reached the drawdown age of 62 last year, 55% were able to meet their Minimum Sum which was set at $60,000 when they turned 55 in 1999. For the remaining members who did not meet the Minimum Sum, their median shortfall was about $34,500. On how many of them delayed taking out their Minimum Sum, about 42% delayed the drawdown of their Minimum Sum by at least one year

For all members, ie, about 22,600 CPF members, who reached the drawdown age of 62 last year, 34% were able to meet their Minimum Sum, when they turned 55 in 1999. For the remaining 15,000 members who did not meet the Minimum Sum, their median shortfall was about $49,300. Again, about 40% delayed the drawdown of their Minimum Sum by at least one year.

Currently, members are allowed to withdraw 50% of their CPF savings at age 55. This is, in fact, one important factor why many members fall short of the Minimum Sum. As announced in 2003, withdrawals below the Minimum Sum at age 55 will be progressively phased out from 2009 to 2013. These measures, together with the broad range of changes to the CPF system announced by PM at the National Day Rally, will further increase retirement savings for members.

Mr Speaker: Order. End of Question time.

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[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 23, 25, 27, 30-32, 35, 38, 42, 44 and 46 on the Order Paper are reproduced in the Appendix*. Question Nos. 22, 24, 26, 28-29, 33-34, 36-37, 39-41, 43, 45 and 47 have been postponed to a date to be fixed.]

*Cols. 1429-1452