It could go up to 65 from the current 62 with more seniors continuing to work beyond the retirement age.

Jun 21, 2007
AsiaOne

The withdrawal age for the minimum sum from the Central Provident Fund (CPF), which is currently tied to the retirement age of 62, could go up to 65.

With the Singapore government encouraging more seniors to continue working, it is reasonable to push the CPF withdrawal age to 65, said Mr Lim Boon Heng, the minister overseeing issues on ageing.

Raising this possibility yesterday, Mr Lim said at a press conference: "The existing law says it is tied to the prevailing retirement age. So, if the retirement age is raised, then the draw-down age from this minimum sum will follow as well.

The supply crunch is exacerbated by ageing buildings, such as One Shenton Way, being torn torn down, while demand continues to stay strong as businesses are expanding.

"I think it is quite reasonable to raise it to 65 if our objective is to raise the employment rate of this group of people."

Mr Lim, who was in Japan recently on a study trip, noted that governments in Japan and Europe have increased the draw-down age for their national pension schemes.

But the minister cautioned against raising the minimum sum's withdrawal age until re-employment becomes prevalent.

"We should make employment happen. We should not leave people in the situation where they can't get a job and yet the minimum sum draw-down age is raised."

The minimum sum scheme requires those from 55 years to leave a certain sum in their account to ensure that they have enough money to see them through old age. It will be raised from $94,600 to $99,600 next month.

Singapore's long-term target is to raise the retirement age to 67. A more immediate plan to be implemented by 2012, however, is a re-employment law to get employers to re-employ their retiring workers.

Economist Tan Khee Giap, commenting on raising the minimum sum's withdrawal age, said: "You must ensure people are able to work till 65 or longer before you delay the withdrawal age."

For the full story, read The Straits Times today.

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