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Singapore Budget 2024: CPF contribution rate for workers aged 55 to 65 and Enhanced Retirement Sum to increase
Singapore Budget 2024: Finance Minister Lawrence Wong said that the Enhanced Retirement Sum (ERS) in 2025 will be S$426,000.
SINGAPORE – The Central Provident Fund (CPF) contribution rates for workers aged 55 to 65 will be increased by a further 1.5 percentage points in 2025.
Announcing this in his Budget 2024 speech in Parliament on Friday (16 February), Deputy Prime Minister and Finance Minister Lawrence Wong said that this is in line with the recommendations of the tripartite group on older workers.
A CPF transition offset will be extended to employers for another year to cover half of the increase in employer contributions for 2025.
Raising retirement sum
The Enhanced Retirement Sum (ERS) will also be increased from three times the Basic Retirement Sum, to four times. "This means that the ERS next year will be S$426,000 and this will allow more members aged 55 and above to fully commit their accumulated CPF savings to receive higher payouts, should they wish to do so," Wong said.
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The CPF system will also be rationalised.
From 2025, the CPF Special Account (SA) will be closed for those aged 55 and above. Currently, CPF members aged 55 and above have an SA and a retirement account (RA).
The SA savings will be transferred to the RA up to the full Full Retirement Sum, and the remaining savings will be transferred to the Ordinary Account (OA).
Retirement support schemes
For seniors who need more help, the Silver Support Scheme will be enhanced. The scheme provides quarterly payments to seniors who had low incomes during their working years and have less family support.
The qualifying qualifying per capita household income threshold for the scheme from will be increased to S$2,300 – from S$1,800 – and the payments will be increased by 20 per cent.
The Matched Retirement Savings Scheme (MRSS), which help Singaporeans aged 55 to 70 with less CPF savings to save more by providing dollar-for-dollar matching for cash top ups to their CPF accounts, will be extended to those aged above 70.
"I will increase the annual matching cap from S$600 to S$2,000 and set a lifetime matching cap of S$20,000," Wong added.
Tax relief for some CPF top-ups will thus be removed as "the matching grant is already a significant benefit extended by the government", Wong said. "So we will remove the tax relief for the cash top-ups that attract the matching grant. These changes to the Silver Support Scheme and the MRSS will take effect from 2025."
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