A new CPF Special Needs Saving Scheme will be launched in early 2012 for parents who have children with special needs. This comes six years after the scheme was originally proposed.

Under the scheme, the funds in the parent’s CPF accounts can be disbursed to their special needs child on a monthly basis, instead of a lump-sum payment.

Upon the parent’s demise, nominee CPF accounts will be set up and a monthly payout of at least $250 will be drawn from the account. The amount can be decided by the parents when they are applying for the scheme.

However, if the parent’s savings are insufficient to provide the minimum payout for 12 months at the point of death, the entire balance will be paid out as one lump sum.

The disabled who require assistance in at least one activity of daily living (There are 6 ADLs: washing, dressing, feeding, toileting, mobility and transferring) and children in Special Education schools would be eligible for this scheme. The nominating parent and the person with disabilities will also have to be Singaporeans or Singapore Permanent Residents at the time of application.

Parents may approach the Centre for Enabled Living for more information.

The CPF Board announced last Friday that the minimum floor rate of 4% in the Special, Medisave and Retirement Account (SMRA) will be extended by another year to the end of 2012.

Since 2008, the SMRA rates were supposed to be pegged to the 12-month average yield of the 10-year Singapore Government Securities (10YSGS) plus 1% subject to a floor rate of 2.5% per annum. However, the government had kept a floor rate of 4% till the end of 2009 in order to help people cope with the transition.

Subsequently, the government extended the 4% floor rate of the SMRA interest twice, once for 2010 and once for 2011.

So this time round will be the third extension.

Incidentally, the average yield of the 10YSGS plus 1%, from 1 September 2010 to 31 August 2011, works out to be 3.30%.

As a followup to this story about missing CPF money, my colleague Wilfred emailed the CPF board to confirm their policy regarding the confidentiality of nominees. This is what he received:

As the Board is under a duty to CPF members to maintain the confidentiality of the information belonging to our CPF members hence we do not release confidential information of a deceased’s CPF nomination.

The information of the deceased’s beneficiaries is confidential to the next beneficiary(ies). Therefore, the beneficiaries will not be identified with each other as we will contact the deceased’s beneficiary(ies) directly.

This is a very serious loophole. What is there to prevent a rogue agent at CPF board from making a fake nomination and making off with someone else’s money? Dead man tell no tales and without knowing where the money went to, it is even harder for the deceased next of kin to detect such a fraud.

The following information from CPF provides details of the latest revisions to various CPF minimum amounts:

From 1 July 2011, the prevailing CPF Minimum Sum (MS) will be revised to $131,000, up from $123,000. Members who can set aside the MS fully in cash can apply to commence their monthly payouts of $1,170 when they reach their draw down age. The new MS will apply to CPF members who turn 55 from 1 July 2011 to 30 June 2012.

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

I was reading a comment online the other day made by a person X that upon his wife’s demise, the CPF proceeds were not paid to him (can’t find the source now).

He checked with the parents of his spouse and they did not receive anything too.

CPF mentioned that the proceeds were paid out in accordance with the nomination made by the deceased but they were unable to reveal the identity of the nominees as it was part of their policy.

So there was no way for the person to know whom the money was paid out to or even to verify that the money was paid out in the first place.

If this story was true, I think it’s a policy that definitely needs to be tweaked!

While there is a need to protect the confidentiality of any nomination made while a person is still alive, surely the immediate next of kin has a right to know where the money went to after the person has died?

The passing on of a loved one is already a highly emotional draining event and having this kind of thing happen would only serve to add more stress and burden on the person involved.