THE minimum sum for both CPF and Medisave accounts have been increased, as well as the Medisave contribution ceiling, with the changes taking effect on the July 1, 2010, the CPF Board announced yesterday.
The prevailing CPF Minimum Sum (MS) will be raised to $123,000, up from $117,000. This is in adherence to the Ministry of Manpower's announcement in August 2003 that the MS will be raised gradually to reach $120,000 (in 2003 dollars) in 2013.
The increase in MS, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement.
Members who can set aside the full MS will receive about $1,100 per month when they reach their draw-down age. The new MS will apply to CPF members who turn 55 from July 1, 2010 to June 30, 2011.
In addition, the Medisave Minimum Sum (MMS) will be raised to $34,500 from $32,000. Members will be able to withdraw their Medisave savings in excess of the MMS at or after 55 years of age.
As a result of this, the Medisave Contribution Ceiling (MCC) - the maximum balance a member may have in his Medisave Account - will be increased correspondingly to $39,500, from $37,000. The MCC is fixed at $5,000 above MMS.
The CPF Board also reiterated in its announcement that any Medisave contribution in excess of the prevailing MCC will be transferred to the member's Special Account if he is below age 55. This would go to his Retirement Account if he is above age 55 and has an MS shortfall.
The CPF Board is also launching three complimentary mega seminars at Suntec City on June 26 and June 27, in conjunction with its turning 55 on July 1.
At each seminar, members will find out what happens to their CPF savings when they reach 55, and learn about the new CPF LIFE scheme. Go to www.cpf.gov.sg for details.
Source: Business Times, 15 May 2010
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