This was announced by Manpower Minister Tan Chuan Jin, who also warned that such a system will make the CPF system more complicated.
Currently, if a person is unable to set aside this full amount in cash, his property – bought with his CPF savings – will be automatically pledged, for up to half of his Minimum Sum.
Mr Tan also said that the government might raise the amount retained as the Minimum Sum.
“We are also looking at the possibility of extending the amount, because there are also a number of people who want to top up their CPF but could not because there are limits.
Actually many also do realise that keeping monies in the CPF makes a fair degree of sense for them as well, both in terms of the savings and the interest that’s being provided.
So, (we are looking at) whether for some who are looking for enhanced payouts, would that be a possibility of putting in more monies into the CPF beyond what it is today? That may be an option that can be considered as well. But we look at it in totality.”
The Minimum Sum is the amount one sets aside upon reaching age 55 to ensure some regular income upon retirement at 65. It now stands at S$155,000.
It will be adjusted to S$161,000 in July 2015.
Mr Tan said the key to improving the CPF system is to establish how much flexibility to work into the system and whether more options can be provided.
Another possibility being looked at is a stream of payouts that get higher as the years go by to combat the effects of inflation.
Since November, the panel tasked with reviewing the CPF system has held several focus group discussions.
It is expected to submit its preliminary recommendations to the government by February next year.
It said that one thing that stands out for now – people value the CPF system.