SINGAPORE: Lee Hsien Yang called an observation from newbie Workers’ Party Member of Parliament (WP MP) Kenneth Tiong (Aljunied) about the cap on the CPF bonus interest “excellent.”
On May 23, Mr Lee, the son of Singapore’s founding Prime Minister Lee Kuan Yew and brother to former PM Lee Hsien Loong, shared Mr Tiong’s Facebook post on the topic.
The MP explained in his post that “There’s a number in your CPF account that hasn’t moved in 18 years.”
Since CPF gave Singaporeans a bonus of 1% interest on their first S$60,000, nothing has changed. Meanwhile, what people need as their Full Retirement Sum (FRS) has more than doubled.
“So the bonus that once covered more than half of your target now covers barely a quarter of it. Same cap, different world,” he added.
Mr Tiong explained that from 2008 to 2026, the FRS needed by Singaporeans has gone up from S$106,000 to S$220,400.
“This means that a policy designed to boost the first 57% of the working Singaporean’s FRS journey in 2008 now covers only 27% in 2026. While other CPF parameters like the Ordinary Wage ceiling have been reviewed and adjusted over time, the bonus interest cap has not,” the MP added.
In its reply, MOM noted that, aside from the extra 1% interest mentioned by Mr Tiong, since 2016, members aged 55 and above get another 1% interest on the first S$30,000.
However, it added that members are not losing out on interest, explaining that CPF retirement sums are decided based on how much money people need for retirement and are not tied to the extra-interest cap.
“The retirement sums guide members on how much to set aside based on their retirement needs,” adding that there are other measures to help Singaporeans build retirement savings, including the Majulah Package, Silver Support Scheme, Matched Retirement Savings Scheme, Workfare Income Supplement, and new CPF top-ups for older Singaporeans who have not reached the Basic Retirement Sum.
FB screengrab/ Kenneth Tiong
What netizens are saying
On Mr Tiong’s Facebook account, many commenters thanked him for bringing the matter up, adding that they felt that the MP was looking out for them. One said that he had the same question as Mr Tiong.
Some Facebook users also thanked Mr Lee for bringing attention to the matter. Also, a commenter asked, “Are we being shortchanged? Or it’s a lapse in oversight?”
Mr Lee, who was granted political asylum in the United Kingdom, has been living outside Singapore for the past few years.
Mr Tiong’s question, as well as the answer from the written reply from the Ministry of Manpower, may be found here. /TISG
Read also: Lee Hsien Yang on 38 Oxley Road: Lee Kuan Yew was opposed to monuments
