Bigger CPF payouts

SINGAPORE - Some have griped about not being able to draw down a bigger income monthly from their nest egg, even after top-ups have been made to their Central Provident Fund (CPF) accounts.

This will change from July, with enhancements to the Minimum Sum Topping-Up Scheme.

CPF members will be able to apply to increase their CPF monthly income - provided their payouts can last at least 20 years from the drawdown age, or at least another five years from the time of application, whichever ends later.

For instance, a 64-year-old man with $95,000 in his Retirement Account, and whose cohort's payouts began at age 62. Were his account to be topped up to $117,000 come July, he could opt to receive $754 a month until the age of 82. Under current rules, he would only be able to draw $537 a month - the maximum payout for his cohort - until the age of 96.

This move is to encourage people to top-up their family members' CPF accounts, said Manpower Minister Gan Kim Yong in Parliament yesterday. "Some members have given feedback that our top-up rules do not allow payouts to be raised beyond the maximum cohort payout level, and may result in excessively long payout durations," he said.

The is because the CPF Board's "prudent approach" had been to use top-up monies in excess of the Minimum Sum to extend the payout duration, instead of the amount.

To also ease the process, CPF members can make or receive regular Minimum Sum top-ups via Giro from next month.

In another major move, from 2013, CPF members turning 55 and with at least $40,000 in their Retirement Account will be automatically included in the CPF Life annuity scheme.

Any extra cash flowing into their Retirement Account from age 55 till 65 will be used to top up their CPF Life plans, so that they will receive a higher monthly income from age 65.

As for those who don't have a sufficient balance at age 55, they can still be auto-included in CPF Life if they have $60,000 in their Retirement Account at 65.

Also new: CPF members will be allowed to transfer their nest-egg monies directly to their nominees' CPF accounts when they die, rather than paying their nominees in cash.

[SOURCE: http://www.todayonline.com]