share on
The Enhanced Retirement Sum will be increased from three times to four times of the Basic Retirement Sum, starting in 2025.
Announced recently at Budget 2024, Singapore is taking steps to enhance retirement adequacy measures.
Some key moves to rationalise the CPF system include the closure of the Special Account (SA) for members aged 55 and above, and raising of the Enhanced Retirement Sum (ERS) from three times to four times of the Basic Retirement Sum starting 2025 so that more members turning age 55 can choose to receive higher CPF payouts.
With this, over 99% of CPF members aged 55 and above will be able to transfer all their SA savings to their Retirement Account to continue earning the higher long-term interest rate, and receive higher retirement payouts.
Further, Singapore is introducing the S$8.2bn Majulah Package to boost the retirement adequacy of seniors. This is expected to benefit 1.6mn Singapore Citizens born in 1973 and earlier.
As announced by Senior Minister of State for Manpower Dr Koh Poh Koon, the Government will enhance support in the following ways:
- continuing with the planned increase in senior workers’ CPF contribution rates to allow senior workers to accumulate more in their CPF accounts
- enhancing the Matched Retirement Savings Scheme in support of seniors with lower retirement savings
- enhance the Silver Support Scheme for seniors who had low incomes during their working years and have less family support
As first announced by Deputy Prime Minister Lawrence Wong at Budget, Singapore is committed to raising the CPF contribution rates for senior workers.
Prior efforts include the Tripartite Workgroup on Older Workers’ recommendation implemented in 2022 to increase the CPF contribution rates for senior workers, and will continue to do so in 2025.
The Government will continue to support employers with the CPF Transition Offset for the first year of implementation of this increase.
Even with the increase in senior workers’ CPF contribution rates, some seniors may still face challenges in accumulating their CPF savings for retirement.
Thus, Singapore will continue the Matched Retirement Savings Scheme (MRSS) beyond the pilot and enhance the scheme in two ways from 2025 onwards.
The Government first introduced the MRSS as a pilot in 2021 to provide a dollar-for-dollar matching grants on cash top-ups made to the Retirement Account of eligible senior Singapore citizens aged between 55 and 70 with lower retirement savings. The matching grant is capped at $600 per year.
These top-ups can be made by anyone – individuals themselves, family members, employers or the community.
In the first three years, about 172,000 Singaporeans have benefitted from the scheme, with an estimated total of $200mn provided in matching grants thus far. The positive response to MRSS showed that financially savvy members have chosen to make top-ups to loved ones’ CPF accounts as a way of growing their retirement savings.
Following the positive response, the MRSS will be extended beyond the current age cap of 70 years old. With this, the number of Singaporeans eligible for the enhanced MRSS will thus double to about 800,000 per year.
At the same time, the maximum matching grant quantum will be increased from S$600 to S$2,000 per year. A S$20,000 cap will apply over an eligible member’s lifetime.
Beyond the increase in senior workers’ contribution rates and MRSS enhancements, Singapore will also be enhancing the Silver Support Scheme.
This will come in the form of an increase in Silver Support quarterly payments by 20% to keep pace with inflation. The Government will continue to review the Silver Support Scheme regularly to target support at seniors while ensuring the scheme remains fiscally sustainable.
Lead image / Ministry of Manpower
share on
