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Changes in CPF Minimum Sum, Medisave Minimum Sum and Medisave Contribution Ceiling From 1 July 2012

Employment practices
30 May 2012 

  1. CPF members who turn 55 between 1 July 2012 and 30 June 2013 will need to set aside a Minimum Sum (MS) of $139,000. The MS for 2011 was $131,000.
  2. The MS has been adjusted over the years to account for inflation, longer life expectancies and Singaporeans' rising expectations of their quality of life post-retirement. Since 2004, the MS has been increased by $4,000 (in 2003 dollars1) each year to reach $120,000 (2003$2) in 2013, as recommended by the Economic Review Committee in 2003. The actual increases in MS are also adjusted for inflation each year.
  3. Based on 2011 inflation and incorporating the annual $4,000 (in 2003 dollars) adjustment, the increase in MS due this year would have been $12,000, which is relatively large compared to previous years. In response to concerns over large increases in MS in any given year, we will spread out the remaining MS increases needed to reach the $120,000 (2003$) target over a longer period of four years. This means we will reach the target in 2015, instead of 2013.
  4. With this change, the 2012 MS will be $139,000, a 6% increase ($8,000) over 2011. Without the change, the 2012 MS would have been $143,000 or a 9% increase over 2011.

    Medisave Minimum Sum and Medisave Contribution Ceiling
  5. The Medisave Minimum Sum (MMS) is the amount that a person turning 55 needs to set aside for his hospitalisation expenses in subsidised Class B2 and C wards, subsidised outpatient treatment for selected chronic conditions and basic MediShield and ElderShield premiums in his old age. Regular MMS adjustments are necessary to help Singaporeans plan for their long-term healthcare needs.
  6. From 1 July 2012,

    a. The Medisave Minimum Sum (MMS) will be raised to $38,500 from $36,000, a 7% increase. Members will be able to withdraw their Medisave savings in excess of the MMS at or after age 55.

    b. The maximum balance a member may have in his Medisave Account, known as the Medisave Contribution Ceiling (MCC), is set at $5,000 above MMS and this would be increased correspondingly to $43,500, from $41,000.
  7. As announced previously, any Medisave contribution in excess of the prevailing MCC will be transferred to the member’s Special Account if he is below age 55 or to his Retirement Account if he is above age 55 and has a MS shortfall.

    CPF Board organises free talks for members reaching 55
  8. As part of CPF Board's ongoing efforts to help members reaching 55 understand the MS and make informed choices about their CPF savings, the CPF Board will be organising three talks opened for members' registration from June to August. More information on the talks, please refer to CPF website. 
    1  The actual increase each year will have to be more than $4000 since the increase must account for inflation between 2003 and the time the increase is made. This is what is meant by a $4000 increase in 2003 dollars.
    2 The $120,000 target in 2003 dollars is effectively $120,000, adjusted for inflation between 2003 and the time the target is met. Doing so preserves the real value of the target.