New NTUC Income Retirement Plan – FlexRetire

About FlexRe­tire

FlexRe­tire is a reg­u­lar premium par­ti­cip­at­ing endow­ment plan. It allows you to start sav­ings reg­u­larly now for your planned retire­ment age of 55, 60, 65 or 70 Last Birth Date (LBD). Upon retire­ment, you will receive reg­u­lar retire­ment pay­out for the next 10, 20 or 30 years. You will also enjoy free pro­tec­tion of 105% premium paid-to-date plus 100% of the bonuses against death and Total Per­man­ent. Dis­ab­il­ity. FlexRe­tire is guar­an­teed accept­ance, i.e. any­one can pur­chase the plan without the needs for a med­ical check-up.

FlexRe­tire is divided into 2 phases — Accu­mu­la­tion Period and Pay­out Period.

Accu­mu­la­tion Period = Chosen Retire­ment Age (up to age 55/60/65/70 LBD) – Entry Age (LBD)

Pay­out Period = Choice of 10, 20 or 30 years

Dur­ing the Accu­mu­la­tion Period, you can choose to pay the premium in 5 years, 10 years or Accu­mu­la­tion Period minus five years. That is, if the Accu­mu­la­tion Period is 25 years, you only need to pay for 20 years and start get­ting the reg­u­lar pay­out from the 25th year onwards.

At the end of Accu­mu­la­tion Period, you can choose to

  • with­draw the full matur­ity amount;
  • with­draw par­tial matur­ity amount, rede­posit the
    remain­ing cash (at least $10,000) with Income and receive monthly pay­out for the next 10/20/30 years; or
  • save the full matur­ity amount with Income with addi­tional cash value given and receive monthly pay­out for the next 10/20/30 years.

Dur­ing the Pay­out Period when you are receiv­ing the monthly pay­out, you can choose to:

  • use the pay­out as your monthly retire­ment income; or
  • deposit the pay­out with NTUC Income at the cur­rent interest rate of 3.5% p.a.. This is a deposit
    account and you can with­draw the money anytime.

At the end of the Pay­out Period, you will receive

  • the final monthly payout;
  • Future Gift, pro­jec­ted at 24 times of the final monthly pay­out; and
  • the reg­u­lar depos­ited pay­ment accu­mu­lated with NTUC Income and accu­mu­lated interest, if any.

The min­imum entry age is 20 and last entry age is 60 LBD.

 

How FlexRe­tire Lets You Retire the Way You Want?

Sup­pose you are now 35-year-old and desire a monthly retire­ment
income of at least $1,000 for 20 years when you retire at age 65. You can start build­ing your retire­ment funds through FlexRe­tire plan as follows:

Monthly Premium Yearly Premium Total Premium Paid for 10 years Guar­an­teed Matur­ity Amount at 65 years old Bonus upon matur­ity @ 4.75% IRR* Total Matur­ity Amount at 65 years old
$1082.10 $12,485 $124,850 $124,850 $75,796 $200,646

If the full matur­ity amount is re-deposited with NTUC Income at the end of Accu­mu­la­tion Period,

New Prin­cipal Amount Pro­jec­ted Monthly Pay­ment @4.75% IRR* for 20 years Pro­jec­ted Future Gift Total Amount drawn over 20 years, includ­ing Future Gift
$454,704 $2,216 $53,184 $585,024

*IRR : Invest­ment Rate of Returns

An Illustration for FlexRetire Plan

Illus­tra­tion for FlexRe­tire Plan

Focus Group Discussions on enhancement to CPF

CPF Advis­ory Panel has just announced a series of Focus Group Dis­cus­sions (FGD) to be con­duc­ted from mid-November 2014 to mid-January 2015. The dis­cus­sion will be on the fol­low­ing topics:-

  1. Min­imum Sum — how to adjust bey­ond 2015 for future retirees
  2. Lump sum with­draw­als at age 65 years — how much should CPF mem­bers be able to with­draw and under what conditions
  3. CPF pay­outs — how could CPF pay­outs be adjus­ted to address cost of liv­ing increases over time
  4. Altern­at­ive invest­ments and annu­it­ies — how to provide more flex­ib­il­ity for CPF mem­bers who are pre­pared to take on more risks.

You can email to cpf_panel@mom.gov.sg to con­trib­ute your ideas on the above top­ics or to sign up for the FGD.  The first 4 FGDs sched­ule to dis­cuss the first 3 top­ics are as follows:-

  •  15 Novem­ber 2014 (Sat­urday) 9.00am to 12.30pm at *SCAPE
  • 22 Novem­ber 2014 (Sat­urday) 9.00am to 12.30pm at *SCAPE
  • 9 Decem­ber 2014 (Tues­day) 6.30pm to 9.30pm at the National Lib­rary Building
  • 10 Janu­ary 2015 (Sat­urday) 9.00am to 12.30pm (venue to be in town area)

There will be more FGD ses­sions to be announced later.

For more inform­a­tion, please visit http://www.cpfpanel.sg

Lease Buyback Scheme extended to 4-room HDB flat

On 3rd Septem­ber 2014, the Min­istry of National Devel­op­ment (MND) and the Hous­ing & Devel­op­ment Board (HDB) announced four enhance­ments to the Lease Buy­back Scheme (LBS) with effect from 1 April 2015.
Only house­hold with at least one of the owner a Singa­por­ean and all own­ers must be at least at CPF Draw-Down Age in order to par­ti­cip­ate in this LBS.

Firstly, the LBS will be exten­ded to 4-room HDB flats. On top of the pro­ceeds the own­ers receive from selling the tail-end lease of their flat to HDB, they will receive a fur­ther $10,000 cash bonus per house­hold if the total CPF top-up is $60,000 or more. If the total CPF top-up is less than $60,000, the house­hold gets a pro-rated bonus of $1 for every $6 CPF top-up.

Secondly, the income ceil­ing for par­ti­cip­at­ing in the LBS will be raised from $3,000 to $10,000 per month. The income ceil­ing for the Sil­ver Hous­ing Bonus (SHB) scheme will be raised from $3,000 to $10,000 correspondingly.

Thirdly, each owner of a house­hold will only be required to top up his/her CPF RA to half the age-adjusted pre­vail­ing CPF Min­imum Sum (MS), instead of the full age-adjusted pre­vail­ing MS cur­rently. There­fore, they will be able to retain more cash upfront from par­ti­cip­at­ing in the LBS. How­ever, for any cash pro­ceeds above $100,000, the own­ers will still be required to top up the excess amount into their respect­ive CPF RAs. How­ever, if you are a sole-owner of the HDB flat, this rule does not apply to you and you will still be required to top up your CPF RA to the full age-adjusted pre­vail­ing CPF MS.

Fourthly, eld­erly house­holds will have the flex­ib­il­ity to choose the length of lease to retain, based on their age and pref­er­ences, instead of hav­ing one stand­ard 30-year lease for all. Those aged 70 to 74 will have the option of a 25-year lease, those aged 75 to 79 will have the option of a 20-year lease, and those aged 80 or older will have the option of a 15-year lease. On the other hand, those who prefer longer leases can choose to retain more than the min­imum required for their age, in 5-year incre­ments, up to a max­imum of 35 years. Any uncon­sumed lease will be refun­ded to the owner’s estate. A house­hold must have lived for at least 5 years and have at least 20 years of lease to sell to HDB to be eli­gible for the LBS.

New Asian Income Fund from NTUC Income

NTUC Income has just launched a new fund, Asian Income Fund, that intends to dis­trib­ute monthly dividend pay­out of 5–6% per annum.  It cap­tures the strong growth poten­tial of Asia through both equit­ies and bonds. Investors gain from an act­ive asset alloc­a­tion strategy which aims to max­im­ize yield and total return in dif­fer­ent mar­ket envir­on­ments (Recov­ery, Expan­sion, Slow­down and Recession).

More import­antly, NTUC Income will guar­an­tee 105% of the invest­ment amount or cash value, whichever is higher, in the event of untimely death or Total Per­man­ent Dis­ab­il­ity (TPD) before age 65, After age 65, it is 100% of the invest­ment amount or cash value, whichever is higher, in the event of untimely death.  This is on top of the monthly with­drawal of the dividends over the years.

The Cur­rent Pro­mo­tion offers a 10% bonus on the net amount of the new dis­tri­bu­tion declared for Asian Income Fund and will be given each month, up to 30 Octo­ber 2014. This bonus is only pay­able once for each dis­tri­bu­tion arising from net new invest­ments and top-ups. It is not applic­able to monthly dis­tri­bu­tion arising from switches into this fund. The bonus will be accu­mu­lated and pay­able together with the accu­mu­lated dis­tri­bu­tion 45 days after 30 Octo­ber 2014.

The Asian Income Fund is pay­able on a monthly basis with effect from Novem­ber 2014. There­after, NTUC Income intends to pay the dis­tri­bu­tion within 45 days from the declar­a­tion date, which is the 2nd last work­ing day of the month.

For example, if Mr Lee made a new invest­ment of $100,000 into Asian Income Fund on 20 May 2014 and received a monthly dis­tri­bu­tion of $480 for the month of May 2014 to Octo­ber 2014 as follows:

  May Jun Jul Aug Sep Oct Total
Monthly Dis­tri­bu­tion $480 $480 $480 $480 $480 $480 $2,880

The bonus pay­able based on the above example is $288.

Sub­scrip­tion Method: Cash/SRS

Asian Income Fund Factsheet is here at http://www.income.com.sg/fund/pdf/2014/AsianIncome(Apr).pdf

Changes to CPF Contribution Rates from January 2015

Recieved the fol­low­ing sum­mary from CPF Board today on Singa­pore Budget 2014 — Ini­ti­at­ives Related to CPF.

For more details, please refer to resources provided by CPF Board at the end of the article.

 

Changes to CPF Con­tri­bu­tion Rates

Employer con­tri­bu­tion rates to the Medis­ave Account (MA) will be increased for all work­ers to help them save more for health­care needs. Work­ers aged above 50 to 65 will see an addi­tional increase in the employer con­tri­bu­tion rates to the Spe­cial Account (SA) to help them save more for retirement.

Employee con­tri­bu­tion rates to the Ordin­ary Account (OA) will increase for work­ers aged above 50 to 55.

The table below shows these increases in CPF con­tri­bu­tion rates for Singa­pore Cit­izens (SCs), and for Singa­pore Per­man­ent Res­id­ents (SPRs) from their 3rd year of obtain­ing SPR status.

Increases in CPF con­tri­bu­tion rates for SCs and SPRs from Janu­ary 2015

Employee’s age (years) Per­cent­age point increase in CPF con­tri­bu­tion rates (for wages ≥ $750) Alloc­a­tion of increase
Con­tri­bu­tion by employer Con­tri­bu­tion by employee Total OA SA MA
50 and below +1% - +1% - - +1%
Above 50 — 55 +2% +0.5% +2.5% +0.5% +1% +1%
Above 55 — 60 +1.5% - +1.5% - +0.5% +1%
Above 60 — 65 +1.5% - +1.5% - +0.5% +1%
Above 65 +1% - +1% - - +1%

Medis­ave con­tri­bu­tion rates for Self-Employed Per­sons (SEPs) with annual net trade income of $18,000 and above will be raised by 1%.

The rates in the table below are applic­able to SEPs for annual net trade income from 2015.

Con­tri­bu­tion rates applic­able to SEPs from 2015

Annual net trade income (from 2015) Age as at 1 Janu­ary of work year
Below 35 years 35 to below 45 years 45 to below 50 years 50 years and above
Above $6,000 to $12,000 4% 4.5% 5% 5.25%
Above $12,000 to $18,000 Phased in* from 4% to 8% Phased in* from 4.5% to 9% Phased in* from 5% to 10% Phased in* from 5.25% to 10.5%
Above $18,000 8%(Maximum $4,800) 9%(Maximum $5,400) 10%(Maximum $6,000) 10.5%(Maximum $6,300)

*Please refer to the CPF web­site for the phased-in rates.
Spe­cial Employ­ment Credit and Tem­por­ary Employ­ment Credit

To help employ­ers bet­ter cope with the con­tri­bu­tion rate increases in 2015, the Spe­cial Employ­ment Credit (SEC) will be enhanced. Employ­ers will in addi­tion receive a new Tem­por­ary Employ­ment Credit (TEC).

SEC enhance­ment in 2015
Employ­ers hir­ing Singa­por­ean work­ers aged above 50 earn­ing up to $4,000 a month in 2015 will receive an addi­tional off­set of up to 0.5% of wages, mak­ing it a total off­set of up to 8.5%. The cur­rent off­set is up to 8%.
TEC pay­ment in 2015
In 2015, employ­ers will receive a one-year off­set of 0.5% of wages for Singa­por­ean and SPR work­ers, up to the CPF salary ceil­ing of $5,000 per month, based on employ­ees’ incomes paid in 2015. This will help employ­ers cope with the increased Medis­ave con­tri­bu­tion rates.

Find out more:

Singa­pore Budget 2014: Ini­ti­at­ives relat­ing to CPF(more details such as FAQs and con­tact inform­a­tion are available)
Singa­pore Budget 2014: All initiatives
Singa­pore Budget 2014: Full Budget Speech

 

Source: CPF Mem­bers Email Update from CPF Board, 22 Feb 2014

New Launch of SP SAIL

NTUC Income has just re-launched a new lim­ited tranche of Single Premium Savings/Endowment Plan, SP SAIL, with imme­di­ate effect. NTUC Income will stop accept­ing applic­a­tions once the alloc­a­tion is reached.

This is a guar­an­teed accept­ance sav­ings plan, which provides pro­tec­tion against Death and Total Per­man­ent Dis­ab­il­ity (TPD)

  • 105% of the single premium for stand­ard life or
  • 101% of the single premium for non-standard* life, plus 100% of the accu­mu­lated bonus.

The min­imum entry age is 25 Last Birth Date (LBD) and max­imum entry age is 60 LBD. The accu­mu­la­tion period is 10, 15, 20,25, 30 years or up to 55, 60, 62, 65 LBD. You can use cash or SRS money to save with SAIL. The min­imum amount for SAIL is $10,000.

 

What is SP SAIL plan?

SP SAIL is a single premium par­ti­cip­at­ing endow­ment or retire­ment plan with a min­imum accu­mu­la­tion period of 10 years. At the end of the accu­mu­la­tion period, you can choose to

  • with­draw the full matur­ity value, or
  • with­draw par­tial matur­ity amount and rede­posit the remain­ing cash with Income. The min­imum deposit amount is $10,000. You will then with­draw your sav­ings in 20 annual installments.
  • Save the full matur­ity amount with NTUC Income to with­draw your sav­ings over the next 20 annual install­ments. Some addi­tional con­ver­sion bonus will be given for this option.

Monthly pay­out is avail­able if the actual con­ver­sion value is $50,000 and above. The second or third option serves as a very good retire­ment plan that will com­ple­ment other annu­ity plan or CPF LIFE scheme man­dated by CPF Board, which provides streams of income pay­ment dur­ing the retire­ment years.

—————-

*Non-standard life refers to an insured suf­fer­ing from any of the fol­low­ing med­ical con­di­tions, at the time of applic­a­tion, within three months from cover start date:

  • Can­cer
  • Heart and/or Heart Valve Conditions
  • Chronic Kid­ney Disease
  • Stroke
  • Liver Cir­rhosis and/or End Stage Liver Failure
  • Sys­temic Lupus Erythematosus
  • Ter­minal Illness
  • Sev­er­ance or total loss of use of one or both limbs OR total loss of use of one or both eyes