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.

Update to Critical Illnesses definitions and coverage

Life Insur­ance Asso­ci­ation Singa­pore (LIA) has just made two changes to the Crit­ic­al Ill­nesses (CIs) bene­fits offered under new indi­vidu­al and group insur­ance policies. These changes take imme­di­ate effect.

Firstly, the defin­i­tions to the “severe stage” of the cur­rent 37 CIs are updated. This is to reflect the advances in clin­ic­al prac­tices, med­ic­al sci­ence and tech­no­logy.

Secondly, LIA now allows more than 30 CIs to be covered in a crit­ic­al ill­ness plan. Cur­rently, only 30 out of the 37 CIs are selec­ted by each insurer to be included in a life insur­ance plan.
Addi­tion­al crit­ic­al ill­nesses out­side the 37 stand­ard CIs will be set and defined by indi­vidu­al insurer. Insurer is also allowed to offer single-ill­ness CI plan such as can­cer.

The cur­rent defin­i­tion of the 37 CIs will not be sold from 1 Feb 2014.

MediShield Life and Integrated Shield Plan

The MediShield Life Review Com­mit­tee has just released the recom­mend­a­tions on the enhanced bene­fits to the cur­rent MediShield. The changes are as fol­lows:-

a) Remove the life­time claim lim­it of $300,000;

b) Remove the cov­er­age age lim­it of 90 years old;

c) Uni­ver­sal cov­er­age for all, includ­ing pre-exist­ing con­di­tions;

d) Increase the policy year claim lim­it from $70,000 to $100,000;

e) Increase the daily claim lim­its for nor­mal wards from $450 to $700 and ICU wards from $900 to $1,200;

f) Increase the claim lim­its for sur­gic­al pro­ced­ures from $150-$1100 to $200-$2000;

g) Increase the daily claim lim­its for com­munity hos­pit­als from$250 to $350;

h) Sub­stan­tially increase the claim lim­its for out­pa­tient can­cer chemo­ther­apy and radio­ther­apy treat­ments, to bet­ter cov­er the cost of sub­sid­ised can­cer treat­ment;

i) Lower co-insur­ance rates from the cur­rent range of 10–20% to 3–10%;

Co-insur­ance Cur­rent MediShield MediShield Life
Claim­able Amount
$0 — $3,000

20%

10%

$3,001 — $5,000

15%

10%

$5,000 — $10,000

10%

5%

>$10,000

10%

3%

Out­pa­tient Treat­ments

20%

10%

j) Start premi­um rebates earli­er from age 66, instead of age 71

The addi­tion­al costs arising from the expec­ted high­er claims from those with pre-exist­ing con­di­tions will be shared across those with pre-exist­ing con­di­tions, the exist­ing insured poli­cy­hold­ers, and the Gov­ern­ment. Those with pre-exist­ing con­di­tions will pay high­er premi­ums at an addi­tion­al 30% for a peri­od of 10 years, in view of high­er risks. The premi­um increase for the remain­ing poli­cy­hold­ers as a res­ult of uni­ver­sal cov­er­age should be no more than 3% from cur­rent premi­ums.

The private Integ­rated Shield Plan (IP) con­sists of two parts – the basic MediShield plan and a top-up por­tion. As an Integ­rated Shield Plan poli­cy­hold­er, you enjoy the com­bined bene­fits of MediShield, which is run by CPF Board, and the enhanced bene­fits of the top-up por­tion, which is run by your private insurer. When imple­men­ted, MediShield Life will replace the cur­rent MediShield por­tion of your IP.

Because MediShield Life will provide cov­er­age for all pre-exist­ing con­di­tions, you will also enjoy the MediShield Life cov­er­age, for life, includ­ing for any pre-exist­ing con­di­tions that you may have. This will apply even if the con­di­tion is excluded fromthe top-up cov­er­age by your Integ­rated Shield insurer.

As the admin­is­trat­or of MediShield Life, the CPF Board will assess all claims from the IP poli­cy­hold­ers and make pay­outs accord­ing to the MediShield Life bene­fits. The CPF Board will for­ward MediShield Life pay­outs to the private insurer, who will com­pute its share of cov­er­age and then provide the com­bined pay­out to the hos­pit­als dir­ectly.

All Integ­rated Shield Plan poli­cy­hold­ers will also receive cov­er­age for life under MediShield Life. Because Integ­rated Shield Plans premi­ums include a MediShield com­pon­ent which will become MediShield Life in future, eli­gible IP poli­cy­hold­ers will also receive sub­sidies from the Gov­ern­ment to help pay for part of their MediShield Life premi­um.

When MediShield shifts to MediShield Life, the premi­um for the MediShield por­tion will increase due to the MediShield Life changes. Hence, the over­all premi­um for Integ­rated Shield Plans may also increase.

The Life Insur­ance Asso­ci­ation has assured the MediShield Life Review Com­mit­tee that the bene­fit recom­mend­a­tions made by the Com­mit­tee will have min­im­al impact on the IP (i.e. top-up) com­pon­ent of premi­ums of Integ­rated Shield Plans. Insurers will assess the impact of the MediShield Life changes on the over­all IP premi­um and will advise their poli­cy­hold­ers when the changes are con­firmed.

All Singa­pore cit­izens will be eli­gible for the fol­low­ing sub­sidies on their MediShield Life premi­ums: trans­ition­al sub­sidies to cush­ion the increase in their pay­able MediShield premi­um, as well as Pion­eer Gen­er­a­tion MediShield sub­sidies if they are Pion­eers and MediShield Life premi­um sub­sidies if they meet the income cri­ter­ia. All Integ­rated Shield Plan poli­cy­hold­ers will enjoy the same sub­sidies for the MediShield Life com­pon­ent of their IP premi­ums.

The Gov­ern­ment will release more inform­a­tion on how you will be assessed for the premi­um sub­sidies when ready.

FAST interbank transfer from 17 March 2014

The Asso­ci­ation of Banks in Singa­pore has just announced that Fast And Secure Trans­fers (FAST) of elec­tron­ic funds trans­fer from one bank to anoth­er bank will be almost instant using the inter­net and mobile plat­forms, start­ing from 17 March 2014 8am. This is much improve­ment from the cur­rent turn­around time of up to three work­ing days.

The max­im­um funds allow for inter­b­ank trans­fer is cur­rently set at $10,000. This ser­vice is free for all retail cus­tom­ers. How­ever, the per trans­ac­tion fee ranges from 20 cents to 5 dol­lars for cor­por­ate cus­tom­ers.

The 14 par­ti­cip­at­ing banks are ANZ Bank, CIMB Bank, Cit­ibank, DBS Bank, Deutsche Bank, Far East­ern Bank, HSBC, May­bank, OCBC Bank, RHB Bank, The Roy­al Bank of Scot­land, Stand­ard Chartered Bank, Sum­itomo Mit­sui Bank­ing Cor­por­a­tion and United Over­seas Bank.

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

Refinancing of Residential Properties Loan made easier

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.