Imputed rents may not be included in CPF Minimum Sum
The government is reviewing how it calculates the CPF Minimum Sum figure, based on inflation.
This, according to Manpower Minister Tan Chuan-Jin, who was speaking today at a CPF forum organised by the Institute of Policy Studies.
The CPF Minimum Sum is calculated based on the Consumer Price Index, which is a measure of inflation.
This figure includes imputed rents, which is the amount home owners would pay if they were renting their homes.
And Mr Tan says they may consider excluding it.
"I think increasingly we are looking at disaggregating some of that figure, because it may have a different impact on the different things we are doing."
He explained that the government's initial plan in 2003 was to raise the CPF Minimum Sum from $80,000 to $120,000 over the next 10 years, and make some adjustments for inflation every year.
"Basically it was meant to end in 2013, but because inflation in the last couple of those years was particularly high, and we didn't want too big a jump, we basically extended it till 2015. So there'll be one more increase for next year."
Thereafter, he says the minimum sum will be adjusted for inflation.
Ensuring that CPF returns keep up with inflation is another area the government is studying.
Currently, CPF savings across the various accounts earn an interest of between 2.5 and 5 per cent.
Another topic brought up at the forum was wages.
Two participants raised concerns that while the CPF Minimum Sum is increasing, along with prices, wages have not gone up by much.
In response, he says stagnating wages is something many countries are grappling with.
Mr Tan says wages in Singapore have risen 2 to 3 per cent in real terms in the last few years.
Wages for lower-income Singaporeans have also risen in the last few years, thanks to the Progressive Wage Model and other measures.
But he adds that in every society, there will be a segment that struggles.
And that's where the rest of the social safety nets come in.
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