Started on 1 July 1955, the CPF (Central Provident Fund) is a compulsory savings plan designed for Permanent Residents and working Singaporeans, providing funding mainly for healthcare, housing and retirement. The Central Provident Fund Board is the entity that administers the CPF, running under the Ministry of Manpower. For the CPF, employers contribute 16% of the employee’s monthly gross salary, while employees contribute 20% of their monthly gross salary.
On 29 May 2014, Singaporean Minister for Manpower Tan Chuan-Jin declared that making sure that the CPF system works smoothly to provide to all Singaporeans’ housing needs is a crucial component of all housing schemes, as an argument to other MPs’ suggestions to allow more CPF monies to be spent on healthcare and retirement, and less on housing. Tan Chuan-Jin also cautioned that the higher CPF interest rates that some MPs (Members of Parliament) called for imply a higher risk, and explained his reasoning in Parliament during a debate on the President’s address. He added that the Government is responsible for catering to Singaporeans’ housing needs and that many of the city-state’s population support his opinion.
In addition, Tan Chuan-Jin ensured Singaporeans that the Government will have their housing needs in mind when working to improve access to housing and grant schemes that will help with monetizing their homes, both in the earlier stages of their life and in their later ones.
In President Tony Tan’s address at the reopening of the twelfth Parliament, he mentioned that improvement of CPF savings and annuity schemes was part of the Singaporean Government’s plans. Similarly, Ang Mo Kio GRC Member of Parliament Inderjit Singh claimed that the CPF Board could limit the amount of the Ordinary Account Singaporeans could use for the purpose of buying property. In addition to more affordable housing, Inderjit Singh claimed, this would leave more for retirement.
Together with other MPs (Zaqy Mohamad – Chua Chu Kang GRC, Tin Pei Ling – Marine Parade GRC), Hougang MP Png Eng Huat called for courses of action that would provide higher returns on CPF monies, which would enable a better resistance to inflation. To this, Minister for Manpower Tan Chuan-Jin responded with a reminder that higher returns also bring higher risks, assuring Singaporeans that CPF interest rates is an area of interest for the Government, in what concerns enhancement of CPF life. In addition, he explained why full flexibility in the use of CPF monies would be a downside. Seeing as the CPF’s main aim is the peace of mind of Singaporeans by providing a steady stream of income in retirement, earlier extraction of CPF monies, claimed Tan Chuan-Jin, would bring concerns.
