Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced certain enhancements to the national savings scheme in his Budget speech in Parliament on Monday (23-Feb-2015). The following are the summary of changes to the CPF as follows (starting from Jan-2016),
Singapore Budget 2015 Impact on CPF: Key Takeaways:
- Increased CPF Ceiling. The CPF salary ceiling will go up to S$6,000, from S$5,000, meaning quote “a 45-year-old worker who earns S$6,000 or more today will save an additional S$60,000 by the time he reaches 65“.
- Increased Contribution Rates. Contribution rates for workers aged 50 to 65 will be increased by 0.5% to 2% with a mix of contribution from both the employee and employer. More details at the CPF website.
- Increased SRS. Government will raise the ann ual contribution cap within the Supplementary Retirement Scheme from $12,750 annually currently to $15,300 annually.
- Additional Interests. For people age 55 and above, the government would pay an additional 1% (additional) interest on the first S$30,000 of CPF balances.
- Changes in the Minimum Sum. (a) Basic Retirement Sum is increased by 3% from 2017 to 2020; and (b) People can now choose between the Basic Retirement Sum – $80,500, Full Retirement Sum – $161,000 or Enhanced Retirement Sum – $241,500 with varying payouts for retirement.
Sources and Links to relevant articles
- Asia One: Proposed changes to CPF: What you should know
- Channel News Asia: Budget 2015: Higher salary ceiling, more contributions for older workers among CPF changes
- Straits Times: Budget 2015