THE Basic Retirement Sum (BRS) will continue to increase by the same 3 per cent per year for the next two cohorts, Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget speech on Tuesday.
This means that for Central Provident Fund (CPF) members who turn 55 in 2021, the sum will be set at S$93,000. It will be S$96,000 for those turning 55 in 2022.
The BRS for CPF members who are 55 years old this year is S$90,500.
“These modest continuing adjustments are necessary for the payouts to keep up with basic retirement expenses,” Mr Heng said.
With continuing wage growth, each successive cohort has been able to save more. The government expects seven in 10 actively employed persons from the two cohorts – those turning 55 in 2021 and 2022 – to be able to set aside their BRS. This will be “significantly” more than the four in 10 about a decade ago, Mr Heng said.
BRS adjustments generally take into account long-term inflation and some improvements in standard of living.
The government needs to keep updating and improving its CPF policies so they remain appropriate for each cohort, Mr Heng said.
For more Budget 2020 stories, visit bt.sg/budget20.