CPF top-ups to include in-laws

SINGAPORE - Acting Manpower Minister Tan Chuan-Jin said today in Parliament that Singaporeans will be able to make cash or CPF to-ups to the accounts of parents-in-law and grandparents-in-law.

In moving the second reading of changes to the CPF Act, Minister Tan said the changes to the Minimum Sum Topping-Up Scheme (MTSU) come in response to feedback to an operational experience of the CPF Board.

The MTSU, which currently covers parents, grandparents, spouse and siblings, was introduced to help Singaporeans contribute to the retirement savings of their loved ones.

They can do so by topping up their CPF Special Account (SA) or Retirement Account (RA).

From January 1, 2013, this will now be extended to include parents-in-law and grandparents-in-law.

Other changes to CPF rules include, simplifying the channels for making top-ups to a member's own SA and RA and introducing a minimum age of 16 when making CPF nominations.

The Ministry also refined the current housing refund policy for CPF funds.

Minister Tan said that the new policy will ensure that CPF housing refunds are consistent with the amounts contributed by each co-owner to the property.

At the same time, it will not require older members to retain in their CPF more refunds than necessary.

Currently, members who sell their property before age 55 are required to refund into their CPF account the principal amount that they withdrew for the property, including the prevailing Ordinary Account (OA) interest that would have accrued on this amount, or P+I in short.

At age 55, a member is required to set aside the Minimum Sum (MS) from his existing CPF balances, and he may withdraw his CPF savings in excess of the MS after having also set aside the required amount in his Medisave Account for his healthcare needs.

So when a member sells his property after age 55, only the amount needed to bring the member up to his MS must be refunded.

"In other words, for a member who sells his property after age 55, he will refund his MS shortfall or his P+I, whichever is lower. Remaining proceeds from the sale of his property is received in cash," outlined Minister Tan.

He pointed out that while the current refund rules for members over 55 avoid collection of housing refunds in excess of MS, there may be certain scenarios involving more than one co-owner, where the refunds required of the co-owners may not match the amount of CPF each co-owner used to pay for that property.

When this arises, co-owners can decide to distribute the cash proceeds among themselves such that the total of the cash proceeds and CPF refunds for each co-owner matches the amount that each co-owner had contributed towards payment of the property.

"However, where the co-owners are no longer on good terms, the distribution of cash proceeds becomes more contentious and the co-owners may not always be willing to consider the amount that the other party has contributed towards the property," he said.

He added that in cases where the property is sold at a loss and there may not be any cash proceeds for distribution, the current housing refund requirements may create some unhappiness among members.

In addressing this issue, all members, regardless of their age, will be required to refund their P+I.

This refinement will ensure co-owners receive CPF refunds that are commensurate with their usage of CPF savings for the property.

Where the P+I refund exceeds the MS shortfall for members aged 55 and above, the refunded amount will first be used to set aside their cohort Minimum Sum in their RA and the required Medisave amount in their MA, while the excess can be withdrawn.

"This is no different from the existing requirement that applies to all members past age 55 who wish to withdraw their OA and SA savings in excess of the MS," he said.

All changes will take effect from January 1, 2013.

CPF maintains interest rate on Ordinary Account savings

SINGAPORE: All CPF members will continue to receive a risk-free interest rate of 2.5 per cent on their Ordinary Account savings from 1 October to 31 December.

The CPF Board said the computed interest rate, derived from the major local banks' interest rates for the three-month period from 1 May to 31 July worked out to be 0.16 per cent per annum.

As this is below the legislated minimum of 2.50 per cent per annum, the Ordinary Account interest rate for October to December will remain unchanged at the legislated minimum of 2.50 per cent per annum.

In addition, an extra 1 per cent interest will continue to be paid on the first S$60,000 of a member's combined balances, with up to S$20,000 from the Ordinary Account.

The extra interest from the Ordinary Account will go into the member's Special or Retirement Account to enhance his retirement savings.

The concessionary interest rate for HDB mortgage loans, which is pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account, will remain unchanged at 2.60 per cent per annum from 1 October to 31 December.

For more information, the public can visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.

$14k bill shock for retiree after operation

SINGAPORE - Retired businessman Steven Choo, 60, underwent angioplasty at the Singapore General Hospital (SGH) to unclog blood vessels in his legs last November.
 
Mr Choo, who is diabetic, underwent the procedure - with "balloons" and stents used to unblock the arteries - which prevented gangrene from spreading from his toes.

But the successful operation marked the start of another round of problems for him. On the day he was discharged from hospital, he received a shock: His medical bill came up to $14,501, but Medisave and MediShield would cover only $900 and $810, respectively, or $1,710 combined.

SGH also told him he would not get his $6,620 deposit back, and that he still owed it $5,381, Mr Choo told my paper in an interview. The remaining $790 was covered by a government grant.

The Central Provident Fund (CPF) Board told him that the Medisave claim submitted by the hospital did not indicate a surgical procedure.

This meant he could not claim the full amount he should have been entitled to: $3,050.

Insurance company AIA, which handles his MediShield account, told him likewise.

Mr Choo then hand-delivered a four-page report from his doctor to the CPF Board, explaining that angioplasty is a surgical procedure. But then he got another shock.

He said: "CPF Board wrote to tell me that they're not paying because (the angioplasty) was not done in a 'proper' place."

The CPF Board's letter, dated Feb 8, read: "Only surgical procedures performed in a properly equipped operating theatre... are Medisave claimable."

The head of SGH's diagnostic radiology department, Associate Professor Tay Kiang Hiong, told my paper that Mr Choo's angioplasty had been planned to take place in an operating theatre. But his operation was moved to an angiography suite - where angioplasty is also typically conducted.

Unhappy

This was because "there were urgent and complicated cases that needed to be performed in the operating theatre", said Prof Tay.

Mr Choo then sent an e-mail message to the CPF Board arguing that he had been penalised because of where his operation was conducted.

The case remained in limbo for three months, said Mr Choo, who wrote to the CPF Board repeatedly, only to receive the same reply each time that his appeal was under review.

In May, the Ministry of Health (MOH) sent him an e-mail message informing him that his appeal had been successful.

Not long after, Mr Choo's MediShield claim was also approved.

AIA told my paper that the claim was reviewed twice because there were inaccuracies in the initial claim.

Late last month, SGH called Mr Choo to tell him that both Medisave and MediShield amounts due to him had been paid out fully.

He was also entitled to a $638 refund from his deposit.

Six months later, the problem has been resolved but it has left Mr Choo irate. He said: "If I did not fight for it, where would I get the money from?"

Mr Choo added that he hopes that others would not have to be put through the same ordeal.

An MOH spokesman told my paper that angioplasty typically takes place in operating theatres.

As Mr Choo's angioplasty took place in an angiography suite, it "was not deemed a surgical procedure".

This is why SGH did not submit a Medisave claim for the procedure, said the spokesman.

The spokesman added: "We have since clarified with SGH that an angioplasty procedure... can be submitted for Medisave claims, even if it took place in the angiography suite."

CPF caps wrap fee for CPF Investment Scheme

From 1 July 2012, the CPF Board will subject the wrap fee charged for CPF Investment Scheme (CPFIS) investments to a maximum limit of 1% per annum.

The cap on wrap fees is intended to help members lower the costs of investing their CPF savings over the longer term. The move is another measure taken by the CPF Board as part of its efforts to progressively lower the costs of investment and improve the quality of products offered under the CPFIS since 2006. Past measures include the tightening of admission criteria for new funds and the setting of fee caps on sales charges and fund expense ratios

A wrap fee is a regular charge paid to financial advisers for providing bundled investment services, such as advisory, brokerage and administrative services. Also known as an ongoing fee, the wrap fee is typically levied monthly or quarterly by liquidating a small portion of the investment. Currently, CPF members who maintain wrap accounts for their CPFIS unit trust investments are charged a wrap fee of up to 1.5% per annum by their financial advisers.

The CPF Board urges members who wish to invest their CPF savings for potentially higher returns to do so prudently and to scrutinise the total cost of investment as high costs may potentially erode investment returns significantly over the long term.

Since 2006, the CPF Board has been undertaking measures to progressively lower the cost of investment and improve the quality of funds under the CPF Investment Scheme. The summary of the measures taken are as follows.

From	Description
1 Feb 2006	Tightening of admission criteria. New funds must: (i) meet the revised benchmark set at the top 25 percentile of funds in the global peer group; (ii) have expense ratio that is lower than the median of existing CPFIS funds in its risk category; and (iii) preferably have track record of good performance for at least 3 years.
1 Jul 2007	Sales charge for CPFIS-included funds must not exceed 3%.
1 Jan 2008	Expense ratios for CPFIS-included funds must not exceed the median of existing CPF funds in its risk category: Risk Categories Expense Ratios Criterion (%) Higher risk 1.95 Medium to High Risk 1.75 Low to Medium Risk 1.15 Lower Risk 0.65
1 Jan 2011	All existing funds must meet the stricter admission criteria before accepting new CPF monies.

More information can be found from CPF Website.

Central Provident Fund Investment Scheme ongoing charge capped at 1%

About 30,000 Singaporeans stand to benefit from a new rule that will make it cheaper to invest under the Central Provident Fund Investment Scheme (CPFIS).

The CPF Board is placing a limit of 1 per cent a year on the wrap fee charged on unit trusts included in the CPFIS, starting from July next year.

A wrap fee is a regular charge paid to financial advisers for providing bundled investment services, such as advisory, brokerage and administrative services.

Also known as an ongoing fee, the wrap fee is typically levied monthly or quarterly by liquidating a small portion of the investment, which eats into returns.

S'poreans reminded to sign up for Growth Dividend

SINGAPORE: Letters will be sent out from December 7 to remind Singaporeans aged 21 and above to sign up for the Growth Dividend this year.

They must do so by 31 December 2011, said the Finance Ministry.

This can be done either online or at any community centre.

Grassroots leaders will also be visiting one- to three-room HDB flats to help the elderly and low-income Singaporeans sign up for their payouts.

Eligible Singaporeans can sign up online at the "Grow & Share" website www.growandshare.gov.sg.

Alternatively, they may complete the "Grow & Share" form available at any community centre, Community Development Council or CPF Service Centre. All forms should reach CPF Board before 31 December 2011.