Mr Louis Ng Kok Kwang (Nee Soon): Sir, this Bill updates the CPF rules to limit the CPF scheme to only SCs and PRs. The Bill also updates rules relating to the death of a CPF member.
CPF is one of Singapore’s unique features. CPF plays an important role in our social stability by helping Singaporeans have a strong retirement nest egg set aside to age gracefully. I support this Bill as it represents a continued focus on this purpose.
I have three points of clarification to raise.
My first clarification is how we ensure that new citizens or PRs will have sufficient amounts set aside for their retirement.
The changes in this Bill reinforce that CPF is meant for the retirement needs of Singaporeans and PRs. However, Singapore remains an open economy. There are people who continue to take up citizenship or PR status. At the point that they take up citizenship or PR status, they may not have any CPF savings. Depending on their age, they may not have the time to build up their retirement reserves. If new citizens and PRs do not have sufficient retirement reserves, they too will have to rely on public infrastructure in their retirement years. How does the Government ensure that any new citizens and PRs have sufficient savings to be self-reliant in their retirement years?
My second clarification is on the change of timing when making computations for deceased members. The Bill changes this from the actual time of death to the time CPF is notified. Can the Minister elaborate what practical effect these changes will have for Singaporeans?
The CPF website states that there is no need for Singaporeans to notify the CPF Board. Can Singaporeans assume that notifications are made automatically to the CPF Board on the same day a death is reported? Is there any risk that this would adversely affect the accounts of a deceased member or payouts to their nominees?
CPF can appear complex to Singaporeans and making sure the rules are clear to Singaporeans will give them greater confidence in the system.
My third and final clarification is on the adjustment to CPF interest rates. We are in an environment of rising interest rates. Many Singaporeans save in and even voluntarily top up their CPF, knowing it is a safe vehicle for their retirement savings with an attractive interest rate.
However, this year we saw the pegged rate for the Special and MediSave accounts go above the floor rate. Various savings and investment products are also advertising rates above the Ordinary Account interest rate. Singaporeans may thus want to chase higher interest rates and through riskier products. Can the Minister elaborate on the Government’s approach to adjusting the interest rate? Will the rates be reviewed in the near future so that our ageing population can have a larger retirement nest egg?
Sir, notwithstanding my clarifications, I stand in support of the Bill.
Watch the speech here.