The Ministry of Manpower (MOM) is reviewing the payout duration of the Central Provident Fund (CPF) Retirement Sum Scheme (RSS), which currently can extend to pay members as old as 95 years of age.

This after receiving feedback from CPF members who said it is currently spread over too long.

Minister for Manpower Josephine Teo said in a parliamentary written answer on Monday (Oct. 7) that MOM and the CPF Board are conducting a review:

"The ongoing review of RSS payout rules will consider how to address this concern. We expect to complete the review before the end of 2019, and will announce the outcome thereafter."

She was responding to MP Foo Mee Har, who asked if the CPF Board could consider reviewing the Retirement Sum payout duration, so that members can receive higher monthly payouts.

How the Retirement Sum Scheme works

The RSS is the main retirement payment scheme for CPF members born before 1958.

Disbursements of one's savings from this scheme are designed to last at least 20 years past the age of eligibility for retirement payouts (this currently ranging from 60 to 65 years old), taking into account the current 4 per cent base interest rate on CPF Retirement Account savings.

Singaporeans are living increasingly longer, though. In 2018, one in five Singaporeans aged 65 were expected to live past age 95, and more than half were expected to live past 85.

"Therefore, when Extra Interest and Additional Extra Interest were introduced by the government in 2008 and 2016 respectively, they were used to extend the RSS payout duration beyond 20 years.

This extension reduces the risk of members running out of savings in old age."

But following concerns expressed by CPF members, the limit of 95 years old may soon be lowered.

Top image from CPF Board's Facebook page and Shi Min Teh on Unsplash