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Singapore sets up advisory panel to study CPF changes

The Straits Times | Wednesday, Sep 10, 2014

Professor Tan Chorh Chuan, president of the National University of Singapore

A 13-member advisory panel has been set up by the Ministry of Manpower to study possible improvements to the Central Provident Fund (CPF) system.


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Here is a press statement from the Ministry of Manpower:

APPOINTMENT OF CENTRAL PROVIDENT FUND ADVISORY PANEL

During his National Day Rally speech 2014, Prime Minister Lee Hsien Loong spoke about the Central Provident Fund (CPF) system which together with home ownership, form the twin pillars of retirement adequacy in Singapore. The CPF system has served Singaporeans well and has several distinctive strengths. However, the Government has been studying further enhancements to some key aspects of the CPF system to make it more flexible to meet the needs of more Singaporeans and provide additional options in retirement.

As CPF changes are complex, PM said that the Ministry of Manpower would appoint a CPF Advisory Panel to study these possible enhancements further, including the benefits and trade-offs involved.

Details of the Panel

The CPF Advisory Panel will be chaired by Professor Tan Chorh Chuan, President of the National University of Singapore. The Panel members include academics, financial industry practitioners, and community representatives from the unions, social sector and grassroots, to provide a broad diversity of views on the enhancements under consideration. The list of Panel members is in the Annex.

On his appointment as Chairman of the CPF Advisory Panel, Professor Tan said, "The panel has been assigned an important responsibility. We recognise that CPF members have varied needs, and we hope that the Panel's work will provide useful insights to help the Government make further improvements to the CPF system to provide greater peace of mind and more options in retirement."

Terms of Reference

The panel will study these areas:

a. How the Minimum Sum should be adjusted beyond 2015, in order to meet the objective of delivering a basic monthly retirement payout for life;

b. How to enable CPF members to withdraw more as a lump sum upon retirement, and the circumstances for their doing so, taking into consideration the impact on retirement adequacy for different groups;

c. How to provide an option for members who prefer CPF payouts that are initially lower but rise with time to help with increases in the cost of living; and

d. How to provide more flexibility for members who wish to

i. Seek higher returns while balancing the higher investment risks involved, through private investment plans; ii. Invest in private annuities when they retire as an alternative to CPF LIFE.

The Panel will convene from mid-September 2014. Initial recommendations will be provided by early 2015, and the panel is expected to complete its study within a year from now and present its report to the Ministry of Manpower.

Members of the public who would like to provide feedback to the panel can e-mail their views to cpf_panel@mom.gov.sg.

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