Increase In Minimum Sum & Medisave Contribution Ceciling

The following update that I picked up are reproduced for your quick reference.

CPF Minimum Sum

From 1 July 07, the CPF Minimum Sum (MS) will be increased from $94,600 to $99,600. The new amount will apply to CPF members who turn 55 between 1 July 07 and 30 June 08. CPF members who set aside the $99,600 fully in cash will receive a monthly payout of $790 from age 62 for about 20 years.

This increase is in line with the announcements made in August 03 that the CPF MS will be raised gradually to reach $120,000 (in 2003 dollars) in 2013. The increase in MS, which includes an adjustment for inflation, is to ensure that Singaporeans set aside sufficient savings for their retirement.

Medisave Minimum Sum and Medisave Contribution Ceiling

From 1 July 07, the Medisave Minimum Sum (MMS) will be increased from $28,000 to $28,500. Members will have to set aside this amount, or the actual Medisave balance, whichever is lower, in their Medisave Account, when they withdraw their CPF at or after 55 years old.

The Medisave Contribution Ceiling (MCC) will be also raised from $33,000 to $33,500. This is the maximum balance each member may have in his Medisave Account. As announced previously, any Medisave contribution in excess of the prevailing MCC will be transferred to the member’s Special Account if he is below age 55. If he is above age 55, the Medisave contribution in excess of the prevailing MCC will be transferred to his Retirement Account if he has a Minimum Sum shortfall.

The revisions to MMS and MCC are to ensure that Singaporeans have sufficient savings to meet their hospitalisation expenses, and have been adjusted for inflation.