Delivered in Parliament on 1 November 2021
Mr Deputy Speaker
Retirement is a word that means so many different things to each of us. For the lucky ones amongst us, it brings with it notions of freedom and leisure, golden years where one is no longer a wage slave. On the other end of the spectrum, it brings with it negative connotations of decline, withdrawal and fears about whether the money in the bank account would be enough to stretch to the end of the month. And it is to address this financing of our retirement that prompted the formation of the CPF system in the first place.
Our CPF system was introduced in 1955, before the time when some of our present retirees today were born. Its official mission is to be the bedrock of our social security system, with a strong emphasis on self-reliance. This is something that we cannot disagree with – and indeed most of the residents we meet do tell us that they would love to be in a position to help themselves and their families. Yet, over the years, the changing structure of our economy, demographics, and indeed the world we live in, has meant that many Singaporeans find themselves in a difficult position today where no matter how hard or fast they run on the treadmill of life, they find themselves unable to keep up and end up falling off, and find it next to impossible to get back on again, not for want of trying. And our CPF system, as the expressed bedrock of our social security system, has to be sensitive and cognisant of these difficulties experienced by our fellow residents.
Our CPF policies have, as a response to our changing economy and society, evolved and expanded in an attempt to cover functions beyond being merely savings for retirement, to be used to pay for many of life’s expenses, from funding the purchase of our homes, to paying for medical expenses of ourselves and our family members. Yet at the core of it is the notion that our CPF funds must be kept locked up with a special key, and that they would only be unlocked at a certain time and in a certain manner.
This may be laudable, but it is little wonder that many of our residents do approach us for assistance with CPF matters. I am sure that most of us here in this House have come across cases where a loved one – often the sole breadwinner of the family – either passes away unexpectedly, or suffers from a condition that results in them being unable to carry on earning an income. When such unexpected events happen, family members more often than not struggle to process the shock, and have to make changes to their daily lives. At the same time, they often find themselves having to deal with additional stress and uncertainty as they navigate a warren of administrative steps and paperwork to unlock CPF funds to tide them through difficult times, which not are well equipped to tackle even when not dealing with the grief or shock that colours everything in the overwhelming aftermath of such an unfortunate event.
From this perspective, the amendments proposed by Clause 50 of the Bill which allow for greater flexibility and efficiency for disbursement of unnominated moneys in the event of a member’s death are welcome. These changes allow the Public Trustee to reimburse reasonable funeral expenses incurred by a beneficiary out of the unnominated moneys. It also allows the Public Trustee to pay a sum of money up to a specified limit to be released directly to a beneficiary representative for disbursement in accordance with intestacy laws.
However, I would like to request the Minister to clarify what the specified limit would be, and how the amount is ultimately to be determined. Would it be an amount that changes like the Retirement Sum Scheme?
We also welcome the removal of the ceiling for voluntary contributions to Medisave. This does help to prepare us in an ageing society, and gives more flexibility to those who are able to do so to better plan for retirement and care needs while still active in the workforce. However could we please have further clarity on whether the CPF board has an estimation of how many people would be affected by this?
Moving on to some of the other proposed amendments, I have further comments and would like to seek some more clarifications.
First, we welcome the flexibility introduced in Clause 5 to allow a Member to withdraw funds from his Retirement Account, subject to the condition that they must be receiving an approved annuity stream that is outside of the CPF. However, I would like to ask for greater clarity on how such other annuity streams are assessed, and ultimately approved.
Likewise, the same clause introduces automatic withdrawals if the Board is satisfied that the member is suffering from a “significant condition”, without the need for the member to apply for such withdrawals. The explanatory note further clarifies that this only relates to withdrawals from the ordinary and special accounts, and not the retirement account. If this is on the understanding that the member is extremely ill or incapacitated, it would mean that it would ease the financial and administrative burden on family members, who might need to otherwise apply through the courts or otherwise find additional funds to pay for medical bills or living expenses. Could the Minister confirm that this is correct? Would the Minister also please clarify if automatic disbursements would take place in all cases when a Member has a significant condition? This may not be necessarily be desirable in cases where the financial circumstances of a Member could mean that the immediate disbursement of funds is unnecessary. Such an automatic disbursement then may deprive the member of interest on these released funds which would be challenging to obtain in other savings accounts.
The final point relates to CPF nominations. The current position is that any nominations for recipients of CPF funds upon the member’s death is automatically cancelled upon the member’s marriage. Does this remain unchanged with the amendments being proposed?
Mr Deputy Speaker, my clarifications notwithstanding, I support the Bill.