WE REFER to the letter by Mr Jolly Wee, 'Change rules to boost CPF top-ups' (my paper, Nov 24), proposing the withdrawal of interest earned on voluntary top-ups to the CPF Special Account.

The purpose of the voluntary CPF topping-up scheme is to encourage members to make cash top-ups to enhance their retirement savings.

It is not intended to provide an income stream available for immediate drawdown.

Interest earned on the Special Account should be retained, so that they can be compounded and enhance the member's retirement savings.

We would also like to highlight that the topping-up scheme already contains incentives to encourage participation.

Those making cash top-ups to their accounts can enjoy up to $7,000 in tax relief.

In addition, if a member makes cash top-ups to family members' (parents, grandparents, siblings or spouses earning less than $2,000 in the preceding year) accounts, he or she would enjoy an additional tax relief amount of up to $7,000.

Ms Julia Ng
Deputy Director
Corporate Communications
for Permanent Secretary
Ministry of Manpower

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