THERE have been many suggestions on how the Central Provident Fund (CPF) can be improved. The Government should look at making the scheme simple, while ensuring that Singaporeans have enough funds to meet their basic retirement needs.
First, the Ordinary, Special, Medisave and Retirement accounts should be merged into a single Retirement Account. This account can then be used for all purposes - medical, housing, education, retirement and low-risk investment.
The Government should continue to pay interest rates that are competitive, based on the risk of investment. Remove the withdrawal cap when it comes to medical and housing purposes; maintain the cap if the funds are used for investment and education.
Second, as the CPF is a low-risk savings tool, there should be a revamp of the Supplementary Retirement Scheme (SRS). Providing an increased tax-saving element for voluntary contributions to the SRS, with no caps, will provide Singaporeans with an incentive to save for their retirement.
The penalty for early withdrawal should be increased to deter people from withdrawing the funds early. The Minimum Sum should incorporate the amount for the SRS.
CPF members should be allowed to invest in SRS-approved investments, where the Government will be able to introduce mid-risk investment options that can help Singaporeans increase their retirement funds.
Wong Shih Shen
First, the Ordinary, Special, Medisave and Retirement accounts should be merged into a single Retirement Account. This account can then be used for all purposes - medical, housing, education, retirement and low-risk investment.
The Government should continue to pay interest rates that are competitive, based on the risk of investment. Remove the withdrawal cap when it comes to medical and housing purposes; maintain the cap if the funds are used for investment and education.
Second, as the CPF is a low-risk savings tool, there should be a revamp of the Supplementary Retirement Scheme (SRS). Providing an increased tax-saving element for voluntary contributions to the SRS, with no caps, will provide Singaporeans with an incentive to save for their retirement.
The penalty for early withdrawal should be increased to deter people from withdrawing the funds early. The Minimum Sum should incorporate the amount for the SRS.
CPF members should be allowed to invest in SRS-approved investments, where the Government will be able to introduce mid-risk investment options that can help Singaporeans increase their retirement funds.
Wong Shih Shen
