CHANGES IN CPF MINIMUM SUM AND MEDISAVE LIMITS

News Release by: Central Provident Fund Board 30 JUNE 2003 --

CPF MINIMUM SUM

From 1 July 2003, the CPF Minimum Sum will be raised from $75,000 to $80,000. This applies to CPF members who reach age 55 on or after that date. A CPF member can choose to pledge a property up to $40,000 against the Minimum Sum of $80,000. The balance of $40,000 has to be in cash in the Retirement Account.

The increase in the Minimum Sum is to cater for anticipated higher costs of living, and enable CPF members to have an adequate income during retirement. With the $80,000 Minimum Sum set aside at age 55, a CPF member will be able to receive a monthly income of at least $613 starting from the prevailing retirement age, currently at age 62, until the funds in his Retirement Account are paid out. If the amount set aside is less than the Minimum Sum of $80,000, the monthly income will be pro-rated.

At age 55, CPF members can either leave the Minimum Sum with the Board, or choose to buy a life annuity with their Minimum Sum so as to receive a lifetime retirement income. Alternatively, they can deposit it with participating banks.

Minimum Sum for Married Couples

Married couples may jointly apply to set aside only one-and-a-half times the Minimum Sum provided they nominate each other as beneficiaries for their Minimum Sum. From 1 July 2003, they can jointly apply to set aside a total Minimum Sum of $120,000 of which $60,000 may be in the form of a property pledge and the remaining $60,000 in cash, in their Retirement Accounts.

Topping-Up of the Minimum Sum

Members must have more than twice the current Minimum Sum to top-up their parent’s or spouse’s Retirement Account using CPF. From 1 July 2003, a CPF member may use his CPF savings in excess of $160,000 ($80,000 must be cash balance in the Ordinary and Special Account) to top up his parent’s or spouse’s Retirement Account. This does not apply for cash top-ups.

MEDISAVE

With effect from 1 July 2003, the Medisave retention sum will be increased from $23,000 to $25,000 and the Medisave contribution ceiling will be increased from $28,000 to $30,000.

The adjustments made to Medisave is to enable Singaporeans to have sufficient savings to meet their hospitalisation expenses when they retire. The Medisave retention sum and Medisave contribution ceiling have been lifted for Government pensioners under the Fixed Amount on Ward Charges Scheme (FAW) while Government pensioners under the Co-payment on Ward Charges Scheme (CPW) will be subject to half of the prevailing Medisave retention sum and contribution ceiling.

When members qualify for CPF withdrawal, their existing Medisave balance will remain in their Medisave account if it is less than the Medisave retention sum. If their Medisave balance exceeds the Medisave retention sum, they will be able to withdraw the difference in cash at the time of withdrawal.

The contribution ceiling allows any Medisave contribution above the ceiling to overflow to the CPF Ordinary Account. This is to give members the flexibility to use their savings for housing, education, insurance or investment needs.

PUBLIC ENQUIRIES

Members of the public can call the CPF Call Centre on 1800-227-1188. - Minimum Sum Scheme - Code 5     - Medisave - Code 6

or e-mail Retirement@cpf.gov.sg   Healthcare@cpf.gov.sg

The Medisave retention sum and Medisave contribution ceiling have been lifted for Government pensioners under the Fixed Amount on Ward Charges Scheme (FAW) while Government pensioners under the Co-payment on Ward Charges Scheme (CPW) will be subject to half of the prevailing Medisave retention sum and contribution ceiling.

When members qualify for CPF withdrawal, their existing Medisave balance will remain in their Medisave account if it is less than the Medisave retention sum. If their Medisave balance exceeds the Medisave retention sum, they will be able to withdraw the difference in cash at the time of withdrawal.

The contribution ceiling allows any Medisave contribution above the ceiling to overflow to the CPF Ordinary Account. This is to give members the flexibility to use their savings for housing, education, insurance or investment needs.