CPF LIFE Plans Have Been Simplified
- Lianhe Zaobao (03 September 2009) : CPF LIFE plans have been simplified
- Lianhe Zaobao (26 August 2009) : Can I Choose A Simple Annuity Plan?
CPF LIFE plans have been simplified
- Lianhe Zaobao, 03 September 2009
We wish to clarify some misperceptions in Mr Chew Chuan Seng's letter 'Can choose the current simpler annuity scheme?' (Lianhe Zaobao, 26 August 2009).
2. CPF LIFE has been made simple for members. There is no minimum CPF balance required to join CPF LIFE. For members turning age 55 in 2013 and beyond, those with at least $40,000 in their Retirement Accounts (RA) will be automatically included while those with lower balances may still opt in.
3. When members join CPF LIFE, their RA monies will be set aside for CPF LIFE. There is no need to set aside another Minimum Sum (MS) or raise money to meet the prevailing MS amount as described by Mr Chew. Payouts under CPF LIFE are generally comparable to those under the current MS scheme, but CPF LIFE payouts go the extra mile as they are paid as long as the member is alive.
4. Mr Chew also compared CPF LIFE with private annuities. They are not directly comparable given their different designs. For example, AIA's deferred annuity plans offered to members from 1989 – 1995 guarantee monthly payouts only for 10 or 15 years, whereas under the LIFE Balanced Plan, any unused premiums will always be refunded even after 15 years. Furthermore, the AIA annuity plan which Mr Chew has cited was offered to members more than 10 years ago. Today, AIA no longer offers such plans to CPF members.
5. We thank Mr Chew for the opportunity to clarify the many points he raised. Members who wish to better understand CPF LIFE can refer to the CPF Board's website www.cpf.gov.sg or call 1800-LIFE-CPF (1800-5433-273).
Can I choose a simple annuity plan?
- Lianhe Zaobao, 26 August 2009
A ZB reader wrote in response to the third reading of the CPF Amendment Bill in Parliament. He noted the benefits of the current Special Annuity scheme, administered by NTUC Income and AIA, only requires members to pay $32,000 to the insurer. However, members need a minimum sum of $40,000 in order to be automatically included for CPF Life. The Retirement Account needs to have $106,000 in order to receive a monthly annuity of $910. Therefore, he felt that the current scheme is more affordable for low-wage workers.