SINGAPORE: The Ministry of Defence (MINDEF) on Friday (Sep 6) announced changes to its savings and employee retirement plan for officers.

Known as the SAVER Plan, it aims to encourage officers to remain in service until they retire from the Singapore Armed Forces (SAF) and to help them "build up a financial reserve" for their move to another career after retirement.

Following a recent review, MINDEF and the SAF will make changes to the scheme, which will take effect on Jul 1, 2025.

This includes more cash bonus payments in the early stages of their careers, full Central Provident Fund (CPF) contributions, and raised contribution duration and rate to the officers' retirement accounts.

"Under the enhanced SAVER Plan, new officers starting their career with the SAF will experience an average of 40 per cent increase in their SAVER benefits, accumulating about three years of their last drawn annual salaries at retirement," said MINDEF.

Under the existing SAVER Plan, MINDEF contributes a certain percentage of an officer's salary into three accounts – the Savings Account, CPF Top-Up Account and Retirement Account.

The money in the three accounts is invested by professional fund managers and supervised by a board of trustees, to generate returns.

MORE BONUS PAYMENTS

Currently, officers receive contributions into their Savings Account in the first 10 years of service to encourage them to stay until then.

From their seventh year in service, officers can withdraw an increasing percentage of their Savings Account money.

They are also eligible to receive a cash retention payment called SAVER Bonus.

From Jul 1, 2025, the current Savings Account and SAVER Bonus payment will be replaced.

Under the changes, officers between the ages of 25 and 34 will receive a SAVER Bonus payment in cash for every three years of service. 

"This will better support their needs, such as marriage and housing, at this life stage," said MINDEF.

FULL CPF CONTRIBUTIONS

Officers are currently on a reduced CPF contribution arrangement.

MINDEF tops up the difference between the full and reduced employer CPF contribution into the officers' CPF Top-Up Account.

This ensures that they are on par with other employees who receive full employer contributions.

The money in the Top-Up Account is then transferred to their CPF accounts when they leave the SAF.

Under the changes, this Top-Up Account will be phased out. 

Officers will instead receive full employer and employee CPF contributions, in accordance with the prevailing national CPF contribution rates. 

"This will enable them to accumulate more CPF funds earlier in their careers, to better support their housing and healthcare needs," said MINDEF.

MORE RETIREMENT CONTRIBUTIONS

Officers currently receive contributions to their Retirement Account from their seventh year in service until they are 42 or 44, depending on their rank and vocation.

From Jul 1, 2025, contributions to the Retirement Account will start from the first year of service instead, and at an increased rate.

"The increased contribution duration and rates will help our officers build up a larger reserve for their career transition upon retirement from the SAF," said MINDEF.

This Retirement Account will be renamed the SAVER Account. 

"Together, these changes will better meet the life-cycle needs of SAF officers and provide them greater financial assurance for career transition upon their retirement from the SAF," said MINDEF.