National Day Rally: PM Lee announces $7 billion Majulah Package to boost seniors’ retirement savings

A $7 billion Majulah Package will soon be rolled out to help some 1.4 million workers in their 50s to early 60s bolster their retirement nest egg.

Prime Minister Lee Hsien Loong announced the package during his National Day Rally Speech on 20 August 2023 at the Institute of Technical Education (ITE) College Central in Ang Mo Kio.

The Majulah Package

Only workers born in 1973 or older will be eligible for the Majulah package.

Mr Lee said: “The Majulah Package will help young seniors in their 50s and early 60s to meet your retirement needs. But besides young seniors, we also want to encourage older seniors to continue working for as long as you can.

“Hence the Majulah Package also covers the Pioneer and Merdeka Generations.”

The package will consist of three components: an “Earn and Save” Bonus, a Retirement Savings Bonus, and a Medisave Bonus.

Mr Lee shared that workers he called “young seniors” are in a unique position, having benefited more from Singapore’s growth as compared to the Pioneer and Merdeka Generations but less than those in their 30s and 40s.

“You have generally earned less over your lifetime, and you have also had less time to benefit from improvements to the CPF system, and so have built up less retirement savings,” he said.

He added that the package will be fully funded using the resources of this term of Government. The Ministry of Finance (MOF) will create a new fund to fulfil the cost of the package.

He said: “This way, we will honour this commitment without burdening future generations.”

To further assure young seniors in their golden years, the Government will also enhance existing schemes such as the Silver Support, Workfare Income Supplement, and the Matched Retirement Savings Scheme.

Details of the enhancements will be announced in 2024.

Earn and Save Bonus

The Earn and Save Bonus component will help lower- and middle-income workers save more by giving them an additional CPF top-up of up to $1,000 annually.

Plus interest, this will amount to some $12,000 in CPF savings over 10 years.

This is provided the worker is still working, either full-time or part-time.

In response to this component of the Majulah Package, Union of Security Employees General Secretary Raymond Chin said the bonus would benefit workers greatly, particularly the lower-income earners.

"More importantly, it will encourage our senior workers to remain actively employed in the workforce, which will in turn keep them mentally active for longer," he added.

Retirement Savings Bonus

Workers whose CPF balances have not reached the CPF Basic Retirement Sum will receive a one-time CPF bonus of up to $1,500.

This is regardless of the person’s employment status and will include homemakers who have given up their careers to care for the family.

Medisave Bonus

The Majulah Package will also consist of a one-time MediSave Bonus of up to $1,000, providing workers an additional buffer to help pay for their medical and insurance expenses.

Mr Lee said the package would help seniors meet their basic retirement needs – especially for lower- and middle-income workers.

NTUC Deputy Secretary-General Heng Chee How shared on Facebook that he was happy that the Majulah Package will help bolster the retirement savings of older workers.

"Enhancing support to our older workers who have contributed to our nation-building over the years will help them to have more adequate savings to meet retirement needs ... These additional arrangements will no doubt bring concrete benefits to our older workers, giving them more assurance and confidence in their retirement adequacy," he wrote.

Jobs and livelihoods

Meanwhile, Mr Lee also shared that the Government is developing a scheme that would offer temporary financial support to workers who have been retrenched and who need to undergo reskilling and upgrading.

“This scheme will ease the immediate pressure that jobseekers experience so they can focus on upgrading their skills for a better long-term job. This is how we can help you get back on your feet confidently,” he shared in Malay.

Mr Lee said the scheme resulted from feedback from the Forward SG conversations. He added that more details will be shared once the Forward SG initiative ends.

The commitment by Mr Lee came after NTUC Assistant Secretary-General Patrick Tay's calls for better unemployment support for workers, PMEs in particular, through the NTUC-SNEF PME Taskforce.

He first called for the support in 2014 and again, in the form of a Transitionary (Unemployment) Insurance in 2021 and a Short Term Salary Support in 2022.

"This temporary financial support would be a much needed interim assistance for retrenched workers to tide over the difficult time where they try to upgrade their skills to look for jobs, but yet, at the same time, face financial pressures of daily expenses and family commitments," Mr Tay wrote on his Facebook page.

He added that he is looking forward to the Government sharing more details of the temporary financial support in due course.

Cost of living

Mr Lee said he is confident the Assurance Package, which was enhanced to $9.6 billion at Budget 2023, will help buffer the impact of the increase. The GST is slated to increase to 9 per cent on 1 January 2024.

He added that he has asked Finance Minister Lawrence Wong to enhance the package further.

“Let’s wait and of course, we hope for good news,” he said in Mandarin.

But Mr Lee also noted that the Government cannot give out subsidies infinitely and that the long-term solution is to make our workers more productive, transform businesses and grow the economy.

“Then our real incomes can rise, and we can all be better off,” he said.

Beyond productivity, Mr Lee said the Government has been stabilising prices over the years through various policies and social enterprises such as NTUC FairPrice.

He said: “In 1973, NTUC established NTUC Welcome, the predecessor of today’s NTUC FairPrice … Fifty years later, FairPrice is now the largest local supermarket chain. It plays a leading role in maintaining costs at a reasonable level, so Singaporeans can continue to buy affordable and good quality goods.”

As prices of goods continue to rise, Mr Lee advised making smart choices when purchasing daily necessities to cut down on expenses.