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In 1999, CPF membership rose by 0.9% to 2,828,072, of which 1,224,470 were active members.
The total members' balances grew by 3.6%, up from $85,276.8 million in 1998 to $88,396.9 million by end of 1999.
On 1 January 1999, the CPF contribution rate was reduced by 10 percentage points in employers' contribution. The CPF cut was part of a $10 billion cost-reduction package proposed by the Committee on Singapore's Competitiveness to lower the cost of doing business in Singapore and help companies cope with the regional economic crisis.
The CPF contribution rate was reduced from 40% to 30% of wages for those age 55 and below, with employers contributing 10% and employees contributing 20%. Those above 55 to age 60 contributed 16.5%, with employers and employees contributing 4% and 12.5% respectively. Those above age 60 to 65 contributed 9.5% (2% from employers and 7.5% from employees) and those above 65 years contributed 7% (2% from employers and 5% from employees).
The maximum monthly contribution payable for all age groups was based on a salary ceiling of $6,000 a month.
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.
Since the CPF cut in January 1999, contributions into the Special Account was suspended. Of the total contribution rate of 30% for employees below 35 years, 24% is credited to the member's Ordinary Account and 6% is credited to his Medisave Account. However, members above 35 years are required to contribute 7% to his Medisave Account, while those above 45 to 65 years are required to contribute 8%; the balance is credited into the Ordinary Account. Members above 65 years contribute their total contributions (ie. 7% of wages) into their Medisave Account.
Savings in the Ordinary Account can be used for housing, approved investments, CPF insurance, tertiary education and topping-up of 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 a cash account for old age use.
Contributions amounting to $12,826.6 million were collected and credited into members' accounts during the year. Withdrawals from members' balances totalled $12,788.6 million in 1999, compared to $13,609.8 million in the previous year.
CPF members receive a market-related interest rate on their CPF savings, subject to a minimum rate of 2.5% pa as stipulated in the CPF Act. Funds in the Special and Retirement Accounts also earn an additional 1.5 %.
From 1 July 1999, the Board changed its frequency of adjusting the CPF interest rates and also revised its interest rate formula.
Instead of a six-monthly adjustment, the CPF interest rates are now revised quarterly, which brings it closer to prevailing market interest rates.
The interest rate formula has also been revised to enhance the rate of return on CPF savings and to better reflect the long-term nature of CPF savings. Instead of the simple average of the 12-month fixed deposit and month-end savings deposit rates of the 4 major local banks, the new formula has given 80% weightage to fixed deposits and 20% to savings deposits.
|
Period |
Ordinary & Medisave Accounts |
Special & Retirement Accounts |
|
January - June 1999 |
4.41% |
5.91% |
|
July - September 1999 |
2.50% |
4.00% |
|
October - December 1999 |
2.50% |
4.00% |
In 1999, interest credited into members' accounts amounted to $3,105.3 million. |