The Central Provident Fund (CPF) basic retirement sum will be raised by 3.5% per year for the next five cohorts of CPF members.
This means the increase will affect those turning 55 from 2023 to 2027.
Based on the basic retirement sum of $96,000 in 2022, the 3.5% per year increase will mean that the sum will be $99,400 in 2023, $102,900 in 2024, $106,500 in 2025, $110,200 in 2026 and $114,100 in 2027.
Speaking at the Budget 2022, Finance Minister Lawrence Wong said this was to “provide members with higher monthly CPF payouts in their retirement years.”
But, he added, there is no requirement for members to top up their CPF if they are unable to set aside the basic retirement sum.
For those who set aside the BRS when they turn 55 in 2027, Wong said they will receive payouts of close to $1,000 per month when they are 65, which will continue for the rest of their lives.
Separately, Wong also announced that employer and employee CPF contribution rates for workers aged 55 to 70 will continue to be increased.
Noting that the first increase was implemented this year, the next step of the increase will continue in 2023.
Employers have been provided with a one-year CPF transition offset equivalent to half of the increase in employer CPF contributions.
The government will also provide employers with a similar offset in 2023, in line with the increase.
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This means that workers aged 55 to 70 will receive a total increase of three to four percentage points in their CPF contribution rates over these two years.
Current CPF contribution rates.
Source: CPF
