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Budget 2024: CPF Enhanced Retirement Sum to increase; Special Account to be closed for those 55 and above Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn Close Close Top Stories Singapore Asia World Commentary Sustainability Business Sport Latest News Discover CNA Insider Watch Live TV News Reports Documentaries & Shows TV Schedule Listen CNA938 Live Podcasts Radio Schedule Special Reports Singapore Parliament Mental Health Interactives Lifestyle Entertainment Women Wellness Living Style & Beauty Dining Travel Luxury Experiences Obsessions People Remarkable Living CNA Eyewitness Send us a news tip Events & Partnerships Branded Content Business Blueprint Health Matters The Asian Traveller Weather Edition: Singapore Asia Search Trending Topics CNA Explains China Malaysia Israel-Hamas war Snap Insight Ukraine invasion Wellness Billion-dollar money laundering case Follow CNA Follow our news Facebook Twitter Youtube LinkedIn RSS
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Budget 2024: CPF Enhanced Retirement Sum to increase; Special Account to be closed for those 55 and above CPF members aged 55 and above can receive estimated monthly payouts of up to S$3,330.
When it comes to CPF contributions, the experts interviewed said there is no need for employees working remotely to do so.The CPF Board website states that CPF contributions “are not payable on wages given to your employee who is employed to work overseas”.(File photo: TODAY)
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Abigail Ng
Abigail Ng 16 Feb 2024 04:51PM (Updated: 16 Feb 2024 06:13PM) Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn SINGAPORE: Central Provident Fund (CPF) members aged at least 55 will no longer have a Special Account from 2025 onwards, but they will be able to put more money into their Retirement Accounts, said Deputy Prime Minister Lawrence Wong in his Budget speech on Friday (Feb 16).
These moves are meant to better support the retirement needs of seniors in Singapore, he added.
The Enhanced Retirement Sum is the maximum amount that CPF members can put into their Retirement Accounts to receive payouts.It is currently set at three times the Basic Retirement Sum (BRS), but will be increased to four times the BRS next year.
“This will allow more members aged 55 and above to fully commit their accumulated CPF savings to receive higher payouts, should they wish to do so,” he said.
WHAT IT MEANS Having more money in a CPF Retirement Account translates to bigger monthly payouts.According to the Ministry of Finance, a CPF member with three times the Basic Retirement Sum in 2025 can have an estimated monthly payout of S$2,530 (US$1,880).
By comparison, a member with four times the BRS next year – or S$426,000 – can receive an estimated monthly payout of S$3,330.
CPF members can voluntarily top up their Retirement Accounts by transferring savings from their Ordinary Account or by making cash top-ups.
Meanwhile, the closure of Special Accounts means that savings in the account will be transferred to the Retirement Account up to the Full Retirement Sum, which is two times the basic sum.
“The remaining (Special Account) savings will be transferred to the Ordinary Account.
Of course, members can voluntarily transfer these OA savings to the RA at any time, up to the revised (Enhanced Retirement Sum), to earn higher interest and to receive higher retirement payouts,” said Mr Wong.
WHY IT MATTERS Savings in the Ordinary Account earn 2.5 per cent per annum, compared to around 4 per cent per annum for the Retirement Account and Special Account.
But some Special Account savings can be withdrawn on demand when the CPF member turns 55.
“As a principle, only savings that cannot be withdrawn on demand should earn the long-term interest rate, and savings that can be withdrawn on demand should earn the short-term interest rate,” the Ministry of Finance said.
In 2022, Member of Parliament Melvin Yong (PAP-Radin Mas) asked the Manpower Ministry about “Special Account shielding” where members prevent their savings from being transferred to the Retirement Account.
That is done by investing money from the Special Account, then liquidating it shortly after.
At the time, the Manpower Ministry said only 2 per cent of CPF members did that.
It also said it would monitor the trend and take action if necessary..
