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In 1998, CPF membership rose by 0.8% to 2,803,405. This figure includes 1,198,155 active members and 219,659 self-employed persons who made contributions under Medisave for the Self-Employed Scheme.
The total members' balances grew by 7.1%, up from $79,657.4 million in 1997 to $85,276.8 million by end of 1998.
In 1998, the CPF contribution rate remained at 40% of wages for those age 55 and below, with employers and employees contributing 20% each. Those above 55 to age 60 contributed 20%, with employers and employees contributing 7.5% and 12.5% respectively. Those between age 61 to 65 contributed 15% and those above 65 years contributed 10%, with equal contributions from employers and employees.
The maximum monthly contribution payable for all age groups was based on a salary ceiling of $6,000 a month.
Non-pensionable officers in the public sector contributed at the same rate as private sector employees. For pensionable officers in the public sector, the contribution rate was 30% with equal contributions from employers and employees. Contributions from pensionable and non-pensionable officers in the public sector are subject to a maximum monthly amount of $1,400 by the employers and $1,200 by the employees.
A CPF member maintains 3 accounts with the Board - Ordinary, Medisave and Special Accounts. At age 55, he also has a Retirement Account under the Minimum Sum Scheme.
Of the total contribution rate of 40%, 30% is credited to the member's Ordinary Account, 6% to his Medisave Account and 4% to his Special Account. However, members above 35 years are required to contribute 7% to his Medisave Account, while those above 45 years are required to contribute 8%. For these members, the contributions into their Ordinary Accounts are reduced to 29% and 28% respectively.
Savings in the Ordinary Account can be used for housing, approved investments, CPF insurance, tertiary education and topping-up parents' Retirement Accounts. Medisave can be used for hospitalisation expenses, Hepatitis B Vaccinations, chemotherapy, radiotherapy, approved outpatient treatments and approved medical insurance premiums. The Special Account is meant for old age and contingencies.
Contributions amounting to $15,999.8 million were collected and credited into members' accounts during the year. Withdrawals from members' balances totalled $13,609.8 million in 1998, compared to $11,456.5 million in the previous year.
CPF members receive a market-related interest rate on their CPF savings. The CPF interest rate is a simple average of the 12-month deposit and month-end savings rates of the 4 major local banks, subject to a minimum rate of 2.5% as stipulated in the CPF Act. It is revised every 6 months. The interest rates for January to June 1998 were 3.48% p.a. for both the Ordinary and Medisave Accounts and 4.73% p.a. for the Special and Retirement Accounts. For July to December 1998, the interest rates increased to 4.29% p.a. for the Ordinary and Medisave Accounts, and 5.79% p.a. for the Special and Retirement Accounts. From January to June 1998, the Special and Retirement Accounts earned interest at 1.25% points higher than the Ordinary and Medisave Accounts. This differential was increased to 1.5% points on 1 July 1998.
From 1 July 1998, CPF members below age 55 can transfer their CPF savings from the Ordinary Account to top-up the Special Account to $40,000. This transfer, which is not reversible, enables CPF members to build up cash for their old age and to earn higher interest on their retirement savings.
In 1998, interest credited into members' accounts amounted to $3,248.9 million. |