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The Minimum Sum for Central Provident Fund (CPF) members has breached the $100,000 mark for the first time.

CPF members who turn 55 from July 1 this year to June 30 next year will have to set aside $106,000 in cash savings in their Retirement Accounts, up from the current $99,600, the CPF Board said in an update yesterday. They will receive $910 every month after they turn 64 for about 20 years, up from $790 under the current Minimum Sum Scheme.

The new Minimum Sum follows the CPF Board’s announcements in Aug 2003 that the sum will be raised to reach $120,000 in 2013. The increase, which includes an adjustment for inflation, is to ensure Singaporeans set aside sufficient savings for their retirement, the board said.

Also, from July 1, the Medisave Minimum Sum will be revised upwards to $29,500 from the current $28,500. CPF members will have to set aside this sum or the actual Medisave balance, whichever is lower, in their Medisave Accounts, when they withdraw their CPF savings at age 55.

In addition, the Medisave Contribution Ceiling will be raised to $34,500 from $33,500. This is the maximum balance a CPF member may have in the Medisave Account, with any excess transferred to the member’s Special Account if he or she is below 55. For those above 55, the excess will be transferred to their Retirement Accounts if there is a shortfall in the Minimum Sum.

CPF members will continue to earn 4-per-cent interest on their Special, Medisave and Retirement Accounts from July to September. This is the current floor rate set by the Government to help CPF members adjust to a floating rate pegged to the yield on the 10-year Singapore Government Security, which at present works out to 3.65 per cent.

Source : Today - 17 Jun 2008