For CPF members born in 1958 or after who have not set aside their Minimum Sums, they can only withdraw $5,000 from their Ordinary Accounts when they reach 55. This is unlike the earlier cohorts who could withdraw a % of their OA savings at 55.
This limit of $5,000 has been applicable since 2013 i.e. for the past 12 years, and there is no indication of any change in the horizon. I believe a review should be considered.
As we are aware, persons aged between 55 and 65 may face employment disruption or ill health, whether themselves or in their spouses or parents. Having some extra cash may be critical during this period. How much can $5,000 do, at today’s cost of living? It is worth pointing out that, in contrast, Minimum Sums to be locked into the Retirement Accounts rise with each cohort of Singaporeans based on the birth year. Should we not also have increases in the sum withdrawable at age 55 with each cohort, to recognise the impact of inflation over time?
My second point concerns CPF nominations. As explained in my Budget speech on 27February, the concern is mainly about home-makers being left without inheriting any of their late spouses’ CPF balances. This happens when the deceased spouse has made nominations naming other persons as beneficiaries.
As mentioned then, CPF savings built up during marriage are classified as matrimonial assets that are subject to division during a divorce. A non-working spouse is regularly awarded a share of the spouse’s CPF savings in a divorce. All the more then, a non-working spouse that sticks it out in a marriage till death, should not be deprived of her spouse’s CPF savings. I suggest that nominations made by married persons that exclude the spouse should be witnessed by their spouses to be valid, so that spousal consent is in effect obtained.
