MEMBERSHIP In 2000, CPF membership rose by 1.8% to 2,879,956, of which 1,272,856 were active members. Members' Balances The total members' balances grew by 2.2%, up from $88,396.9 million in 1999 to $90,298.3 million by end of 2000. CPF Contribution Rates On 1 January 1999, the employers’ portion of the CPF contribution rate was reduced by 10 percentage points, bringing the total contribution by the employer and employee to 30%. The CPF cut was part of a cost-reduction package adopted by the Government to lower the cost of doing business in Singapore. This was to help companies cope with the regional economic crisis and help workers keep their jobs. With the recovery of the economy, there was a partial restoration of the employer’s portion of the contribution rates by 2% to 12% in April 2000. The maximum monthly contribution payable for all age groups is based on a salary ceiling of $6,000 a month. In August 2000, the Government also announced the long-term allocation rates for the Ordinary, Special and Medisave Accounts. The Inter-Ministerial Committee on the Ageing Population, formed in October 1998 to lead a coordinated national response to address the challenges of Singapore’s rapidly ageing population, had recommended increasing the contributions to the Special and Medisave Accounts, to help members better prepare for retirement. The contribution to the Ordinary Account would be adjusted so that the total contribution by the employer and employee is 40%, which is the same as the total CPF contributions before the CPF cut in January 1999. Long-term CPF Allocation Rates Age group Ordinary Account (%) Special Account (%) Medisave Account (%) Total (%) 35 years & below 29 4 7 40 Above 35 – 45 years 26 6 8 40 Above 45 – 55 years 23 8 9 40 Above 55 – 60 years 11 - 9 20 Above 60 – 65 years 2.5 - 9 11.5 Above 65 years - - 9 9 Priority would be given to the Special Account when restoring the CPF contributions, followed by the Ordinary Account and lastly, the Medisave Account. Members' Accounts A CPF member maintains three accounts with the Board - Ordinary, Medisave and Special Accounts. At age 55, he also has a Retirement Account under the Minimum Sum Scheme. Contributions into the Special Account were suspended with the CPF cut in January 1999. The allocation of CPF contributions to members’ accounts for the period 1 January 1999 to 31 March 2000 is shown below: Allocation of Contributions from 1 January 1999 to 31 March 2000 Age group Ordinary Account (%) Special Account (%) Medisave Account (%) Total (%) 35 years and below 24 0 6 30 Above 35 to 45 years 23 0 7 30 Above 45 to 55 years 22 0 8 30 Above 55 to 60 years 8.5 - 8 16.5 Above 60 to 65 years 1.5 - 8 9.5 Above 65 years - - 7 7 Contributions to the Special Account resumed with the partial CPF restoration in April 2000. The allocation of CPF contributions to members’ accounts for the period 1 April 2000 to 31 December 2000 is shown below: Allocation of Contributions from 1 April 2000 to 31 December 2000 Age group Ordinary Account (%) Special Account (%) Medisave Account (%) Total (%) 35 years and below 24 2 6 32 Above 35 to 45 years 23 2 7 32 Above 45 to 55 years 22 2 8 32 Above 55 to 60 years 9 - 8 17 Above 60 to 65 years 2 - 8 10 Above 65 years - - 7.5 7.5   Savings in the Ordinary Account can be used for housing, investments, CPF insurance, tertiary education and topping-up of parents' Retirement Accounts. Medisave can be used for hospitalisation expenses, approved outpatient treatments such as chemotherapy and radiotherapy, and approved medical insurance. The Special Account is a cash account for old age use and contingency purposes. Contributions amounting to $14,092.8 million were collected and credited into members' accounts during the year. Withdrawals from members' balances totalled $14,555.9 million in 2000, compared to $12,788.6 million in the previous year. Interest Earned by Members CPF members receive a market-related interest rate on their CPF savings, subject to a minimum rate of 2.5% per annum as stipulated in the CPF Act. Funds in the Special and Retirement Accounts also earn an additional 1.5%. The interest rate is calculated based on the 12-month fixed deposit and month-end savings deposit rates of the four major local banks. To enhance the rate of return on CPF savings and to better reflect the long-term nature of CPF savings, the fixed deposit interest rate is given a weightage of 80%. The interest rates are reviewed quarterly to bring them closer to the prevailing market interest rates. The interest rates remained at 2.5% per annum for the Ordinary and Medisave Accounts and 4% per annum for the Special and Retirement Accounts for year 2000. In 2000, interest credited into members' accounts amounted to $2,379.8 million.