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
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
*Please refer to the CPF website for the phased-in rates.
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).
Find out more:
Source: CPF Members Email Update from CPF Board, 22 Feb 2014
Owner-Occupied Residential Properties
Monetary Authority of Singapore (MAS) has announced to exempt owner-occupied owners from the Total Debt Servicing Ratio (TDSR) of 60% when they refinance the property loan from bank, as long as they bought the property before 29 June 2013.
Also, the Mortgage Servicing Ratio (30% of borrower’s gross monthly salary) will also not apply to HDB flats and Executive Condominiums (ECs) when owners refinance the loan, as long as these homes were purchased before 12 January 2013 and 10 December 2013 respectively.
A similar concession will apply with regard to loan tenures, for residential properties purchased before the respective implementation dates for the new loan tenure limits of 30 years for HDB flat and 35 years for others. For HDB, the implementation date was 28 August 2013 and for other owner-occupied residential properties, the date was 6 October 2012. In such cases, borrowers will be allowed to maintain the remaining tenures of their loans at the point of refinancing.
Investment Residential Properties
The TDSR threshold of 60 per cent will continue to apply to the refinancing of all investment property loans. However, MAS will allow a transition period until 30 June 2017, during which a borrower may refinance his investment property loans above the 60 per cent threshold, provided he meets the following conditions:
(a) the property was bought before 29 June 2013;
(b) the borrower commits to a debt reduction plan with the financial institution (FI) at the point of refinancing; and
© the borrower fulfills the FI’s credit assessment.
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:
- Heart and/or Heart Valve Conditions
- Chronic Kidney Disease
- 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
Automobile Association of Singapore (AAS) launched a new motor insurance policy , “AA Senior Motor Plus”, on 23 January 2014. It is targeted at drivers aged 65 and above. It was launched in collaboration with Liberty Insurance and the Singapore Optometric Association.
It comes with benefits such as a 5 per cent discount for eligible policyholders with 30 or more years of experience, and a free medical examination, required of drivers above 65 years old by the Traffic Police. Like any other car insurance policies, driving records and claims experience will be taken into consideration when setting the premium. Policyholder would need to pay for standard excess and it covers driving in both Singapore and West Malaysia.
Currently, NTUC Income offers motor insurance for drivers above 65. At Aviva and DirectAsia.com, only renewal of policies for those above 70 are considered on a case-by-case basis.
Therefore, senior drivers now have one more choice from AAS.
The Singapore Government may be implementing cap on the total amount of money that Singaporean can borrow across all the licensed moneylenders. Therefore, a central database whereby all moneylenders can access to check on the borrowers’ borrowing and credit history will be set up to facilitate this implementation.
In September 2013, Monetary Authority of Singapore has announced that from June 2015, those whose unsecured debts total more than 12 months of their income for 90 days or more will be barred from borrowing further from the banks.
So it is natural that Ministry of Law, who regulates the Registry of Moneylenders, will likely to look into the unsecured loan in the moneylenders’ industries. Hopefully, these two regulations will help Singaporeans to be more prudent and do some financial planning so that they do not over-borrow from the banks or the moneylenders.
NTUC Income has just launched the Regular Premium Policies Promotion from 8th Jan 2014 to 28th February 2014. You will receive up to $500^ CapitaMall shopping vouchers when you apply during the promotion period.
Minimum Monthly Premium
Premium payment term of 5 to 9 years
Premium payment term of 10 years and more
^ For policies with premium payment term of 5 to 9 years, voucher amount is capped at $250 per policy.
For policies with premium payment term of 10 years and above, voucher amount is capped at $500 per policy.
The qualifying plans are as follows:-
2. Endowment Plan
3. Family Insurance Plan
4. Harvest (GIO)
6. Mortgage Plan
7. Protection/ Limited Pay Protection
8. RevoSave/ Limited Pay RevoSave/ Limited Pay RevoSave (5-Pay-10)
9. SAIL (Regular Premium)
10. Senior Plan
Terms and Conditions apply. Click here for more information.
Savings in the CPF Special and Medisave Account (SMA) currently earn the higher of either 4% or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%. The interest rate on SMA savings is adjusted quarterly, based on interest rates on 10YSGS over a preceding 12-month period. The average yield of the 10YSGS plus 1%, from 1 December 2012 to 30 November 2013, is 2.93%. Therefore, the interest rate for CPF SMA will continue to be 4% p.a. from 1 Jan 2014 to 31 March 2014.
Savings in CPF Retirement Account (RA) earn the higher of either 4% or the 12-month average yield of the 10YSGS plus 1%, and adjusted yearly. Therefore, the 4% p.a. interest rate will apply to CPF RA from 1 January 2014 to 31 December 2014.
The additional 1% interest will continue to be paid on the first $60,000 of the combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the SA or RA to enhance the retirement savings.
From 1 January 2014, the Medisave Required Amount (MRA) will be adjusted to $40,500 from the current $38,500, which is the same as the Medisave Minimum Sum (MMS). This is the amount that CPF members are required to top up to the Medisave Account (MA) to the current MMS/MRS when they make a CPF withdrawal at age 55.
CPFB will distribute $29m of surplus from its Dependants’ Protection Scheme (DPS) to members who had active covers when DPS was privatised on 17 September 2005. This rebate will be credited to their CPF OA on 15 December 2013.
NTUC Income has just launched a new Personal Accident plan, SpecialCare (Autism), specailly designed for autistic child from the age of 15 days old to 30 years old. Parent will have to be the policyholder to buy for the child as the insured. SpecialCare pays up to $60,000 to the familiy if death or Total Permanent Disability (TPD) were to happen to policyholder. Also, 5 years premium will be waived to tie the insured over this difficult period.
As for the insured, it covers outpatient, hospitalisation, medical expenses due to infectious disease, ambulance fee, physiotherapy and psychiatic therapy etc.
The yearly premium for sum assured of $30,000 is $198 and for $60,000 is $352
For more deatils, please refer to NTUC Income website at http://www.income.com.sg/insurance/SpecialCareAutism/benefits.asp
VivoChild is an Education Plan specially designed for your child’s education in Singapore, from Primary 1 to University years. You save regularly every month and NTUC Income will pay you cash benefits when your child is in Primary 1, Primary 6, Secondary 4, Junior College 2 and the 3 years in university institution. You can either spend it or deposit back with Income at the current 3.5% p.a.. You can withdraw the cash deposit anytime you want, with a minimum withdrawal of $500. VivoChild also pays $100 per day of hospitalisation for Hand Foot Mouth Disease, Dengue Fever and Food Poisoning.
Not only does VivoChld offers better interest rate, it provides free protection against death and Total permanent Disability (TPD, which is Lost of sight, two legs etc.) to your child. Importantly, should death, TPD or 30 critical illness were to occur to the parent, all future premium will be waived. You are assured that your intention of the education fund that you plan to save will not be disrupted by any of the mishaps.
This is how VivoChild works.
1) You save a fixed sum of money to NTUC Income for 5, 10 years or full term, and the policy matures at age 20 or 22 years old.
2) At the important milestones of your child (P1, P6, S4, JC2 & University years), NTUC Income will return part of the premium back (called cashback) to you. You can choose to
a) Spend it.
b) Save at current 3.5% per annum interest in deposit account issued by Income
3) At any point in time, you can withdraw the money from the Deposit account, with minimum withdrawal of $500.