March 11, 2005
Plans for better CPF returns
SINGAPOREANS may be able to get better returns from the Central Provident Fund.
The Government is studying a framework that will let CPF members make investments with risk levels they can tolerate and from which the majority can benefit in the longer term.
Announcing this yesterday, Manpower Minister Ng Eng Hen cautioned that 'the framework cannot be a quick way to make a fortune'.
The potential of higher returns comes with higher risks, he stressed. This is why the Government shelved plans to let CPF members take up privately managed pension plans. The idea came from the Economic Review Committee in 2002.
Dr Ng said feedback from the industry and the public indicated that many members would underestimate their risks and make unwise investment decisions.
He was replying to opposition MP Low Thia Khiang (Hougang), who asked if the Government had plans to get better returns on CPF savings.
Said Dr Ng: 'This is a complex situation and I don't think you can do it without broad consultation.'
Meanwhile, CPF members must work longer and save more for their retirement, he said. This is because people today start their working life later and live longer after retirement.
Dr Ng also announced that the criteria to top up CPF accounts will be relaxed this year. CPF members will find it easier to make top-ups to the retirement accounts of parents, grandparents and non-working spouses older than 55.
Currently, people can use either cash or CPF savings to do top-ups.
To use CPF funds, a member must have more than twice the minimum sum. Only the amount in the ordinary account exceeding twice the minimum sum can be used.