THE proposed Central Provident Fund (CPF) changes allow the working spouse to transfer his CPF to his non-working spouse, so that in the event of death, there is a higher annuity for the non-working spouse from age 65 ("Proposed CPF changes give members more control"; Thursday).
However, this is not optimal and needs to be tweaked further.
The working spouse is required to specify an amount to transfer to the non-working spouse's CPF. But most people are not financially savvy enough to determine what the right amount should be.
There are retirement insurance products that provide monthly annuity payouts. These products allow joint-ownership of the policy, where if one spouse dies, the annuity is bequeathed to the surviving spouse.
But this is not the case for the CPF annuity; in the event of the working spouse's death, his annuity is not automatically transferred to his spouse.
In summary, the intention of the recommendation is a well-meaning one, but I urge the Government to look at how to implement this. Perhaps, it could adopt the best practices of private annuity plans.
Wong Shih Shen
However, this is not optimal and needs to be tweaked further.
The working spouse is required to specify an amount to transfer to the non-working spouse's CPF. But most people are not financially savvy enough to determine what the right amount should be.
There are retirement insurance products that provide monthly annuity payouts. These products allow joint-ownership of the policy, where if one spouse dies, the annuity is bequeathed to the surviving spouse.
But this is not the case for the CPF annuity; in the event of the working spouse's death, his annuity is not automatically transferred to his spouse.
In summary, the intention of the recommendation is a well-meaning one, but I urge the Government to look at how to implement this. Perhaps, it could adopt the best practices of private annuity plans.
Wong Shih Shen
