CPF reform

[wts2013]

The advantageous of topping up to Medisave is to make use of the overflowing feature, whereby excess medisave monies flow over to SA or RA. I reckon that's a more powerful force then compounding.

ya, so now garmen kill the game, u no need to play liao right, just topup direct to SA lor, hahaha

 

[xtwis7]

Now they allow pple to use medisave to pay for ISP premiums up to $800 per annum. GG why did Gan Kim Yong tell this out BEFORE the insurance comapanies come out with the new pricing for the ISP with medishield life? I think pple are now inclined to get e most "comprehensive" and expensive coverage since they are spending money they can't touch anyway. And as a result insurance company can get away with charging higher cpremiums.

Sigh.

Any idea how does the actual payment from Medisave works? Must meet up with insurance agent already I think.

 

[w1rbelw1nd]

Any idea how does the actual payment from Medisave works? Must meet up with insurance agent already I think.

You mean medishield? I think you can claim from medishield life after deducting the deductibles and coinsurance.

Annual claim limit of $100,000, with no lifetime limit is really quite attractive imo. Just remember that agents may be biased with their advice...

 

[lzydata]

If there is no need to fulfil the Medisave Minimum Sum at age 55 before withdrawals from OA/SA... then people won't be bothered to top-up their Medisave. Right?

Is this new policy flawed?

So under the new policy, whatever you have in your MA is from mandatory contributions or voluntary contributions, never from internal transfers/topups at age 55 or 65.

Given the higher incomes of working people nowadays and the recent increase in the MA contribution rate, I think the government's assessment is that this is sufficient. Let's bear in mind, the allocation rate for MA is higher than for the SA for 50 years old and below (more money goes in there), and the same interest rate applies. If we do the same calculation and account for compounding, the balance will be higher than the SA's.

Also, the really big medical expenses come with older age, and this will also be addressed with Medishield Life subsidies and ad-hoc government topups.

 

[cscs3]

Any idea how does the actual payment from Medisave works? Must meet up with insurance agent already I think.

Insurance agent is just another salesman. Is good to study before meeting them. Best is do not meet them.

 

[cscs3]

So under the new policy, whatever you have in your MA is from mandatory contributions or voluntary contributions, never from internal transfers/topups at age 55 or 65.

Given the higher incomes of working people nowadays and the recent increase in the MA contribution rate, I think the government's assessment is that this is sufficient. Let's bear in mind, the allocation rate for MA is higher than for the SA for 50 years old and below (more money goes in there), and the same interest rate applies. If we do the same calculation and account for compounding, the balance will be higher than the SA's.

Also, the really big medical expenses come with older age, and this will also be addressed with Medishield Life subsidies and ad-hoc government topups.

I don't find a different Still the interest rate pay out is very attractive.

 

[lzydata]

FAQs on the Changes to the Medisave Scheme

http://mycpf.cpf.gov.sg/NR/rdonlyre...3CDB46/0/FAQsonChangestotheMedisaveScheme.pdf

 

[peacefulday]

FAQs on the Changes to the Medisave Scheme

http://mycpf.cpf.gov.sg/NR/rdonlyre...3CDB46/0/FAQsonChangestotheMedisaveScheme.pdf

nothing explain on what if the member decreased? How will the cpf sum go to next of kin? Decreased member's cpf will transfer into cash and handover to dominate next of kin?

Member decreased:
below 55,
between 55 > 65,
above 65

how will the rough payout like? These doubts are what we most concern.....

 

[wts2013]

nothing explain on what if the member decreased? How will the cpf sum go to next of kin? Decreased member's cpf will transfer into cash and handover to dominate next of kin?

Member decreased:
below 55,
between 55 > 65,
above 65

how will the rough payout like? These doubts are what we most concern.....

It is very clear, distribution of CPF monies of deceased follows CPF regulations, ie it will automatically be paid to the nominated parties if u have a nomination made. Once a death cert is obtained, CPF Board will automatically be notified and CPF Board will contact the nominated parties, confirm the nominated parties' bank account and how u want shares like singtel to be disposed. U can choose to transfer the shares to your CDP or ask CPF to sell the shares and credit the funds to your bank a/c.

 

[lzydata]

nothing explain on what if the member decreased? How will the cpf sum go to next of kin? Decreased member's cpf will transfer into cash and handover to dominate next of kin?

Member decreased:
below 55,
between 55 > 65,
above 65

how will the rough payout like? These doubts are what we most concern.....

The balances in the OA, SA, MA and RA as well as unused CPF LIFE premiums will be distributed among the nominee(s), if there is a CPF nomination, or following the intestacy laws if there is no nomination. I believe the age is only a factor in how much the unused CPF LIFE premiums are i.e. what the CPF LIFE bequest is.

Distribution of CPF savings upon death of a CPF member
http://mycpf.cpf.gov.sg/Members/CPFSchemes/CPFWithdrawalsonOtherGrounds_DM.htm

 

[peacefulday]

just a thought,

if one able to only achieve the Enhance retirement sum in his/her coming years, what's the best option...

1) go ahead oneself to hit the Enhance Retirement Sum target, or
2) split up both shares such as he/her and spouse to achieve Full retirement instead?

I will go for 2) then, and what is your take? Any pro and con?

 

[lzydata]

just a thought,

if one able to only achieve the Enhance retirement sum in his/her coming years, what's the best option...

1) go ahead oneself to hit the Enhance Retirement Sum target, or
2) split up both shares such as he/her and spouse to achieve Full retirement instead?

I will go for 2) then, and what is your take? Any pro and con?

Since CPF LIFE has no option for a spouse to inherit someone's payout, it should be better for couples to "split up" their retirement sums so that each has at least the Full Retirement Sum. (Or the Basic one if you think that's enough.) This way, no matter who outlives who, each person is guaranteed a reasonable payout for life. But exactly how much this is supposed to be better for both parties depends on the actual numbers, which I expect the CPF Board to provide along with the counselling to all those turning 55 or 65 years old.

Here's a "lopsided" scenario where one spouse has a lot more in CPF LIFE than the other, and (1) that spouse goes first, and (2) there is no CPF nomination. Under intestacy laws, for example, if there is a spouse and children, half will go to the spouse and the other half will be distributed amongst the children. If there are no children but living parents, half will go to the spouse and the other half to the parents. So the bequest may not be directed 100% to the spouse. Also it is not clear if the spouse can then "top up" his/her own CPF LIFE to get the higher payouts, or he/she would have to do without a life annuity of his/her own.

 

[henrylbh]

just a thought,

if one able to only achieve the Enhance retirement sum in his/her coming years, what's the best option...

1) go ahead oneself to hit the Enhance Retirement Sum target, or
2) split up both shares such as he/her and spouse to achieve Full retirement instead?

I will go for 2) then, and what is your take? Any pro and con?

Any amount above FRS can be kept to meet the ERS or withdrawn in cash or transferred to another defined party's CPF or kept in OA for emergency withdrawal in future.

BRS payout is 650 -700
FRS payout is 1200 - 1300

Splitting FRS into 2BRS the payout would be 1300 - 1400.

If so wish and can afford 2FRS or 2ERS is best depending on one's decision and needs. Only need to remember that amount that goes to FRS or ERS is irreversible.

In splitting one need to consider the age of the other half as the payout will be later if the other is younger. Also payout for femaile is lower.

If one of them is gone, the deceased's can be nominated to go to the other half in cash or in CPF. Whether the bequest in Cash or CPF can be channelled into CPF Life for higher payout of the other is not clear.

Also it should be noted that the giver who transferred his/her CPF to the recipient will get back the unused CPF amount from the recipient if the recipient is gone. Whether the amount can be channelled in CPF Life for higher payout is also not clear.

If it is a cash top to the other half, the recipient's CPF will be distributed to the nominee/s or go to the estate when the recipient is gone and the giver may not get back his contribution if he is not the sole beneficiary.

 

[henrylbh]

I have some qualms about this. Here is why;

Medisave Contribution Ceiling used to be revised every July. In sync with the new retirement enhancements, the review is done every January. What this means is that interest generated (and credited in 1st Jan) will no longer overflow to other accounts. THis is because by then, the Basic Healthcare Sum is being revised upwards ( i suppose) again. See where i coming from?

2ndly, the removal of the Medisave Min Sum should be a good thing. But the report also mentioned that older citizens now would just need to fit the withdrawal criteria. Say for example; a 59 yr old citizen has this balances;

OA - $100k
SA - $0
MA - $40k
RA - Met his Retirement Sum.

Question; Is he eligible to withdraw $100k from his OA since his RA meets the Retirement Sum. If i base on the previous guidelines (before this change), he needs to top up his MA to the Medisave Min Sum (currently $43,500), then he can withdraw the excess, which means $100k - $3500 (shortfall) = $96,500. So what happens if this new scheme is implemented?

Food for thought. Anybody can answer?

From 1 January 2016, a CPF member withdrawing his CPF monies from the Ordinary and Special Accounts upon reaching age 55 will no longer be required to top up his Medisave account, even if his Medisave balance is below the Basic Healthcare Sum.

The BHS is fixed at $49,800 from 1 Jan. Currently, one can with Medisave account in excess of $43,500 if one meets the min sum at age 55. This is a very big jump from $43,500 to $49,800 in the name of enhancements to the scheme!

 

[tiny]

I feel the BHS and the Retirement Sums should be based on age band like how the medishield works. Cannot be expecting a fresh graduate in 2016 to hit the BHS?

What will the sums be for fresh graduate of the year 2030 be hitting? The sum ceiling only gets higher but a fresh graduate is still a fresh graduate.

 

[anfielder]

I feel the BHS and the Retirement Sums should be based on age band like how the medishield works. Cannot be expecting a fresh graduate in 2016 to hit the BHS?

What will the sums be for fresh graduate of the year 2030 be hitting? The sum ceiling only gets higher but a fresh graduate is still a fresh graduate.

why are you talking about fresh graduates hitting the BHS and retirement sums when these are for those who reach the age of 55?

 

[teerance85]

From 1 January 2016, a CPF member withdrawing his CPF monies from the Ordinary and Special Accounts upon reaching age 55 will no longer be required to top up his Medisave account, even if his Medisave balance is below the Basic Healthcare Sum.

The BHS is fixed at $49,800 from 1 Jan. Currently, one can with Medisave account in excess of $43,500 if one meets the min sum at age 55. This is a very big jump from $43,500 to $49,800 in the name of enhancements to the scheme!

So what this means is, the term "excess withdrawable monies from medisave" would cease to exist. Whatever excess medisave goes to SA (below 55), RA or OA (above 55).

 

[djchris]

He's just commenting that the change of a minimum medisave sum of 43,500 to basic healthcare sum of 49,800 is a big jump.

 

[henrylbh]

Instead of commenting on BHS of 49.8k, he should be lamenting why now basic car cost about 100k and a 5rm cost about 350k.

 

[lzydata]

The BHS is fixed at $49,800 from 1 Jan. Currently, one can with Medisave account in excess of $43,500 if one meets the min sum at age 55. This is a very big jump from $43,500 to $49,800 in the name of enhancements to the scheme!

Don't be misleading. The appropriate comparison is not between the BHS and the MMS $43,500, but the MCC $48,500. You cannot compare it to the MMS because even if you do not have the BHS, you do not need to top it up. One can have $1 inside the MA at age 55 and that will be fine.