By Ang Wei Qin
THE scheme is stated in the Central Provident Fund (CPF) website.
But Mr Jerry Low, 58, was not aware of it.
So the retired bank trader got a surprise when the CPF Board transferred $10,000 into his Medisave Account (MA) without his permission, after he applied to withdraw $37,000 from his Ordinary Account (OA) in June this year.
Mr Low had chosen to not withdraw all his money from his OA when he turned 55.
He opted for a partial withdrawal, leaving some money in his OA as the CPF interest rate of 2.5 per cent was higher than what the banks were offering.
He could do this as his Medisave Account and Retirement Account (RA) had the required amount.
Since 2008, Mr Low had used his Medisave to pay for some medical expenses, whittling away his Medisave Required Amount (MRA), which was $14,000 as of Jan 1, 2008.
However, the required amount was raised to $27,500 as of Jan 1 this year.
Said Mr Low: "I was shocked to find that $10,000 from my OA had been moved to my MA without my approval.
"I did not even know that the money was moved, let alone the amount moved."
He had one big question:
"What if I had taken all my money out when I turned 55?
"Would they have asked me to top up the MA to be back above the required MRA?
"How are those who keep their money with the CPF different from those who continue to save with it?"
When contacted, a CPF spokesman said that this was not a new scheme.
She said in a statement that "on an average yearly basis, less than 1 per cent of CPF members who turned 55 years old have had a transfer from their Ordinary and/or Special Account to their Medisave Account".
She told The New Paper: "It only affects people who have met the minimum sum requirement in the RA but not the minimum sum in the MA."
If such a member wants to withdraw money from his OA, his MA is subject to a top-up from his OA.
The statement also stated that "the MRA that members need to set aside to provide for healthcare needs in retirement is currently $27,500 and is annually adjusted to address increasing lifespans and rising health-care costs."
"CPF members who turn 55 and have the full CPF Minimum Sum are required to set aside the MRA in their MA when they make a CPF withdrawal," the statement read.
"If such members have less than the MRA in their MA, their Ordinary and/or Special Account balances would be used to top up the MRA."
Members above 55 who are still contributing to their CPF accounts still have a Special Account instead of a Retirement Account.
The statement did not say what would happen to those who withdraw all their money from the OA when they turn 55. It also did not say if they have to top up their MA should they withdraw from it.