Fancy a 'lifelong income scam'?
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they really outdid themselves this time ..... this scam does practically nothing to help poorer, older Singaporeans, while squeezing middle income Singaporeans who look forward to the day they can touch their CPF ..... bravo ! .....
I look very much forward to voting too .... I had that chap who liked to take pictures of maids the last time .... i'll vote for him again ... even for that clown chee ... for ah meng ... for a chimp ... i don't care ... anything to make the powers that be sweat a bit ..... someone please contest ang moh kio again, and tanjong pagar too ...
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... after forcing people to believe in CPF for decades, what makes them think people will believe in this nonsensical Annuities Scam?
... they're going to be disappointed...
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New annunities scheme offers better returns: Minister
Keith Lin
Wed, Feb 13, 2008
The Straits Times
MANPOWER Minister Ng Eng Hen on Wednesday assured Singaporeans that the new compulsory annuities scheme will offer more attractive returns than similar products offered by the private sector.This is because the scheme will be administered by the Central Provident Fund (CPF) Board, which operates a more favourable interest rate structure than commercial annuity providers, he said. As such, those who opt for the scheme will enjoy payouts based on a minimum guaranteed interest rate of 3.5 per cent.
In comparison, most commercial annuity providers guarantee only a 2 per cent rate of return, Dr Ng said. Whether they give more depends on how well their investments fare, he added.
Under the new CPF Life scheme, CPF members aged 50 and below will have their Minimum Sum cash balances divided into two segments when they turn 55.One part goes to the Retirement Account, which will be used for monthly annuity payouts, while the Refundable Premiums (RP) portion will be used to pay for the premiums of the scheme.
From Jan 1, the Government has floated the interest rates for the Retirement, as well as the Special and Medisave accounts, and pegging them to 10-year Singapore Government Securities (SGS) rates.
But to help members adjust to the floating rate, the Government has guaranteed it will pay out a minimum of 4 per cent on such accounts for the next two years, after which all CPF accounts will attract a floor rate of 2.5 per cent.
At the same time, the Government will pay an additional 1 per cent interest on the first $60,000 of all accounts, with up to $20,000 in the Ordinary Account.
This means that the annuity payouts will be calculated based on an interest rate in the Retirement Account that ranges between 3.5 per cent - 2.5 per cent plus 1 percentage point - and 5 per cent. Besides the better returns, Singaporeans also trust the CPF Board to run the scheme well, Dr Ng said.
Dr Ng, however, made clear that the CPF Board did not set out with the intention of running the scheme.
It was only after the Lim Pin-chaired committee tasked to design the scheme received 'overwhelming response' in favour of it doing so, that the board decided to shoulder the task, he said.
Dr Ng also took the opportunity to respond to concerns on why the payouts will not factor in rising living costs.
Under the CPF Life scheme, participants get a fixed income as long as they live.
He said that having an inflation-indexed scheme would mean that initial payouts need to be smaller, so that participants would have bigger payouts when they grow old.
The other issue is the certainty that those who will live long enough will stand to receive the higher payouts.
But he said Singaporeans are free to sign up annuities plans with commercial providers and be exempted from the national scheme.
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... older folks are already feeling Short Changed, they can forget about it...
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Push to get older, low-wage workers to opt for annuity scheme
Li Xueying
Wed, Feb 13, 2008
The Straits Times
THE Government will campaign 'aggressively' to encourage Singaporeans for whom the annuity scheme is not compulsory, to opt in.This include those older than 50 this year, and those with less than $40,000 in their Minimum Sum balances. Responding to the recommendations by the committee tasked to design a longevity insurance scheme, Manpower Minister Ng Eng Hen on Wednesday said they would fix the 'inadequate' retirement system.
But much remains to be done in the next five years before the CPF Life scheme, to be administered by the Central Provident Fund Board, kicks in in 2013.
Under the scheme, workers will pay premiums out of their Minimum Sum to get a monthly income for as long as they live.Said Dr Ng: 'It's a great weight lifted off one shoulder, now it's transferred to the other shoulder. CPF Board will have to bear this but the foundations are much stronger for them to run the CPF Life.'
One key issue is the push to get those left out of the scheme to voluntarily join in.
'In the immediate future, what CPF Board will be embarking on is an aggressive campaign to encourage opt-ins,' said Dr Ng. 'We'll facilitate opt-ins because I think this is a much needed piece in our CPF system.' Currently, there are three groups for whom the scheme is not mandatory:
Those above 50 this year. There are about 900,000 such residents.
Those with less than $40,000 in their Minimum Sum balances. They make up a quarter - about 9,000 - of the 35,000 workers aged 50 this year who will be the scheme's pioneer batch.
This figure is expected to decrease for subsequent cohorts, as they have a longer period to earn extra interest.Some 100,000 informal, contract or self-employed workers who do not have any CPF at all.
However, the minister acknowledged that these groups will have to pay relatively higher premiums or accept lower payouts for life.
In particular, the committee had called on the Government to offer 'one-off assistance measures' to those with insufficient CPF funds to help them take part in the scheme.
Dr Ng said that it is a sensible suggestion, one that the Government will take 'very seriously'. It will respond in due course.
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Get more out of Life
Take a bet on how long you'll live with CPF Life
Loh Chee Kong
AT first glance, it seems like a no-brainer: Get as much money out of the new CPF Life scheme as fast as possible.
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After all, like anyone else who is young and healthy, I have no idea when the Grim Reaper or a chronic illness might strike.
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And should I choose to start my annuity payouts at age 65 under the refundable premium option — the Refund 65 plan — I would get a higher monthly payment than under the default Refund 80 plan.
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The difference would be at least $40, assuming I have more than $67,000 in cash in my Retirement Account (RA) when I turn 55. This is hardly an eye-popping disparity but then, as many would shrug and say, why turn down the extra cash?
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As for whether to choose a refundable or non-refundable scheme, well, it all boils down to whether you have beneficiaries and if you want to leave money for them.
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But wait. If, like me — or most of the lay people I've spoken to — your immediate instinct is to jump at the Refund 65 plan when it is your turn to choose, consider the following first.
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Should you die just before your 65th birthday, your beneficiaries could lose out on more than $32,000, in comparison to what they would have gotten had you opted for the default Refund 80 plan, for instance.
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Thanks to the Government's announcement last year of an extra 1-per-centage point interest on CPF savings, between now and 2013 when the new annuity scheme kicks, CPF members who have $67,000 in cash in their Minimum Sum account can draw out $710 monthly from age 65 to 85 — as compared to $600 under the old interest rate.
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With the help of Society of Financial Service Professionals president Leong Sze Hian, these are our calculations for the new scheme based on the available information: Assuming you have $67,000 in cash in your RA and you sign up for the Refund 65 plan, your entire RA would go into the refundable premiums pool.
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If you die before turning 65, the premiums would be fully refunded to your family — in other words, they get back $67,000 exactly.
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But had you opted for the default Refund 80 plan instead, where only 24 per cent of your RA goes into the refundable premiums, your family would get $99,023 (that's $16,080 from refundable premiums, plus $82,943 from your RA including the 5-per-cent compounded interest earned since age 55).
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In all, that's a hefty $32,023 more.
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So, should you now shoot for the other end of the CPF Life spectrum, that is, the Refund 85 or 90 plans, to maximise the benefits to your loved ones?
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Here's another variable to consider. Under the Refund 65 plan, if you die a month after turning 65, your family gets back $66,350 (some 99 per cent of your premium).
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Under the Refund 90 plan, if you die one month after turning 90, your family gets back $3,460 (86 per cent of your premium, which would have been very low to begin with).
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And if you have a Refund 75 plan and die a month after your 75th birthday, your family receives $26,840. Notably, should you die at 75 or 90, but you have a Refund 65 plan, your family would get nothing as your payouts would have exceeded your premium.
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Your family also does not get back anything that may be left in your RA should you die after annuity payments start.
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In short, to put it crudely, it's like taking a bet on your life span.
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In Mr Leong's view: "If you don't manage to cross the starting age for payout, you are worse off taking an earlier payout. If you manage to cross that age, you are better off taking an earlier payout."
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My personal choice? I'm a risk-taker.
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Which means that, in 28 years' time when I turn 55, and if I'm still hale, I would choose the Refund 65 plan and spend the next decade praying hard — and staying healthy — to ensure I live past my 65th birthday. As for my beneficiaries, I'm sure they wouldn't fault me for leaving nothing behind by living longer.
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This article is not meant to serve as a guide. Individual needs and circumstances may vary and it is best to consult the CPF Board for advice. Contact the CPF Life hotline 1800-5433-273.
Take a bet on how long you'll live with CPF Life
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I got a solution. Lets all DIE early.
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Originally posted by Shotgun:
I got a solution. Lets all DIE early.
... LOL..
... quite a lot are doing that already... just that ST afraid to publish it...
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We all know what our govt is up to. This plan will eventually roll out despite widespread negativity.
Changing the plan's name :D
Hell i could name my pile of faeces "Rose" and it will still smell like our govt and thier policies.
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well at least they are making a slight u-turn i nthe way they do things, its 'opt in' for this one, instead of the usual 'opt out' tactics xD
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Originally posted by 4getmenot:
well at least they are making a slight u-turn i nthe way they do things, its 'opt in' for this one, instead of the usual 'opt out' tactics xD
" THE Government will campaign 'aggressively' to encourage Singaporeans for whom the annuity scheme is not compulsory, to opt in. This include those older than 50 this year, and those with less than $40,000 in their Minimum Sum balances." - I think this mean that only those older than 50 this year and with less than $40,000 in their minimum sum are not compulsary to take up this scheme. So it is mandatory to most Singaporeans which mean there's no option for you to 'opt in' or 'opt out'. -
Originally posted by 4getmenot:
well at least they are making a slight u-turn i nthe way they do things, its 'opt in' for this one, instead of the usual 'opt out' tactics xD
correction .... the "opt in" is only for those who are already too old (read: poor and therefore uneconomic to the scheme) ...... for the rest, it's compulsory ....
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Really. Get out of Singapore and earn your bucks o'seas. That way you don't have to worry about some biatch cpf and annuity scheme. Plan your own retirement expenditures and save up.