Singapore is among the healthier nations in the world, with age expectancy on the rise in the country, primarily on account of improved healthcare facilities and lifestyle choices. This increased age expectancy invariably means that one will be spending a certain portion of their life as a retired individual, a phase which might not provide the income necessary to lead a comfortable lifestyle. This is where it becomes crucial for us to invest in a good retirement plan, with the Central Provident Fund being the frontrunner in this race.
What is CPF?
Social Security is a key concern among citizens across the globe, with multiple governments keen to implement social security in their country. CPF or Central Provident Fund is one such initiative undertaken by the Singapore Government which aims to provide both the citizens and residents of Singapore an opportunity to feel safe and secure in their retired life.
In simple terms, it is a retirement fund which looks after the financial requirements of invested individuals after they have retired. Funded through contributions from both the employer and employee (beneficiary), it provides financial support to meet monetary requirements post-retirement.
CPF history and board structure
The evolution of CPF is highlighted in the timeline below.
The Central Provident Fund Board is headed by a Chief Executive Officer, who is assisted by Deputy Chief Executives of Services and Employers & Finance. They are aided by authorities from the Infocomm Technology Services, Internal Audit Group and Policy & Corporate Development departments. Group Directors for various entities help in smooth functioning of the organisation.
Features of CPF
The Central Provident Fund offers a host of attractive features, a few of which are highlighted in the table.
|SingPass 2FA||Enhanced virtual protection|
|eStatement||Secure, virtual, timely account statement|
|e-Concierge||Personal aid for CPF requests|
|e-Cashier||Make payments through online banking|
|Contribution||Contributions are made both by the employer and employee|
Partnering with CPF – Triple Benefits
The Central Provident Fund aims to provide three-pronged benefits to individuals, encompassing multiple needs. The triple benefits of CPF are highlighted below.
- Retirement income – Members are eligible to get a certain amount of money after they retire, thereby helping them meet their financial obligations.
- Home finance – The amount invested into a CPF account can be used to pay home mortgages, providing members an opportunity to own a house by the time they retire.
- Healthcare – CPF arms members to pay for their health expenses and medical treatment by providing sufficient funds when required.
Types of CPF Accounts
There are 4 types of accounts which can be opened under CPF, as highlighted in the table below.
|Ordinary Account||The primary purpose of an ordinary account is to meet generic requirements, be it education, housing, investment or insurance.|
|Special Account||It is a special account which caters to financial needs after retirement.|
|Medisave Account||A specialised account which caters to medical expenses like hospitalisation and medicines.|
|Retirement Account||This is an additional account which is created only after a member turns 55 years. Offers higher returns to help prepare for retirement.|
CPF Interest Rates
The primary purpose of a CPF account is to provide sufficient income to members when they need it. For this to be effective, an investment should earn interest, which is computed based on the account operational.
|Account Type||Minimum (Assured) Interest Rate||Maximum Interest Rate|
|Ordinary Account||2.5% per annum||3.5% per annum|
|Special Account||4% per annum||5% per annum|
|Medisave Account||4% per annum||5% per annum|
|Retirement Account||4% per annum||5% per annum|
Extra Interest – Members of CPF who are over the age of 55 years are entitled to earn an additional 1% interest on their account, which is termed the Extra Interest. This interest is computed based on the amount present in a given account.
Note: The interest rates mentioned above are applicable for the current year, viz., 2016. Interest for Ordinary, Special, and Medisave Accounts are reviewed every quarter, and the aforementioned rates are valid for the quarter ending September 30, 2016. Interest rates for Retirement Accounts are reviewed annually, with the aforementioned rates valid till December 31, 2016.
CPF Interest Rate trends from 2010
Economic fluctuations have resulted in changes in interest rates across the country, thereby having an impact on the interest offered on CPF accounts. The table below highlights the trends since the year 2010.
|2010 Interest Rate||2011 Interest Rate||2012 Interest Rate||2013 Interest Rate||2014 Interest Rate||2015 Interest Rate||2016 Interest Rate|
Note: The table above indicates the minimum interest rate which an account could earn, with the maximum interest containing an additional Extra Interest component.
Computation of CPF Interest Rate
CPF Interest Rates are computed based on the interest offered by the investment instrument (Special Singapore Government Securities). The interest earned by the particular investment is directly credited to the account. Interest rates are reviewed either quarterly or annually, depending on the type of CPF account maintained.
CPF Investments – Where does your money go?
A certain portion of the salary is invested into the CPF account, with the CPF Board further investing this amount in Special Singapore Government Securities. This investment earns interest which is then returned to the original account, as displayed below.
Statistics of CPF
CPF statistics over the last 5 years are highlighted below.
|Year||CPF Membership (Million)||Active CPF Membership (Million)||CPF Balance [all members](S$m)||Contributions to CPF Accounts^ (S$m)||Net Withdrawals (S$m)|
*Information for the year 2016 is accurate till June.
^This is the amount which was contributed through dividends and government grants.
The Central Provident Fund aims to be a holistic Fund, aiming to encompass a number of crucial components. As such, it provides a host of schemes, each designed to fulfil a certain requirement. Keeping in mind its primary motive of providing healthcare, retirement, and housing benefits to members, the schemes offered under CPF can be broadly categorised under the following.
CPF Retirement Schemes – CPF provides a number of retirement schemes to enhance this phase of life. These are listed in the table below.
|Scheme Name||Type of Scheme||Purpose of Scheme|
|CPF LIFE (Lifetime Income For the Elderly)
||National annuity scheme||Aims to ensure that members have income for life, with continuous payouts from the day they are eligible.
|Retirement Sum Scheme||Retirement Income||Provide increased returns on investment by creating a Retirement Account which earns higher interest.|
|Retirement Sum Topping-up Scheme||Additional retirement income||To have additional funds at their disposal during retirement. This is done by depositing additional amounts in an account.|
- Withdrawal Age: Individuals who have chosen CPF to be their retirement partner can withdraw the amount in their CPF account once they attain the age of 55 years. The withdrawal amount varies, depending on whether a member has sufficient funds to deposit into their Retirement and Medisave Account.
- Account Transfer – Given the fact that members can choose from 3 accounts (before they turn 55 years), individuals who are keen to boost their retirement corpus can choose to transfer money from their Ordinary Account into a Special Account.
- Deferment Bonus – This refers to the special, one-time bonus which was paid to members who were impacted by changes in age payout dates. The age for payout was steadily increased from 62 years to 64 years in a span of 3 years, and all affected members received this one-time amount. Additionally, individuals who wish to defer their monthly payments after they attain the payout age are eligible to receive a deferment bonus. This bonus will be paid for every year during which the payment was deferred.
CPF Housing Schemes – Owning a home is a dream most Singaporeans work towards, and the CPF Housing Scheme aims to provide a platform which helps one realise this dream. The table below highlights the different housing schemes offered.
|Public Housing Scheme||Provide a platform through which members can purchase a HDB flat through their CPF savings.|
|Private Properties Scheme||Provide a platform through which members can purchase private properties using their CPF savings.|
|Home Protection Scheme||Provide a safety net to members who purchase HDB flats using their CPF savings. Acts as an insurance cover to offset mortgage payments in case of demise/permanent disability of insured member.|
CPF Healthcare Schemes – Singapore, as a nation, ranks high in terms of life expectancy of its residents, primarily due to a healthy lifestyle coupled with good medical facilities. Healthcare schemes under CPF allow one to make use of the facilities without burdening their finances. The different schemes are highlighted below.
||To ensure that members of CPF Singapore have sufficient funds to meet healthcare expenses, for self and dependents.
|Medishield*||CPF members can use this scheme to reduce the financial burden when it comes to paying hospital bills. It provides an insurance cover which looks after outpatient treatments and hospital bills which might be expensive for a member.|
|Medishield Life||A healthcare boost to citizens and permanent residents of Singapore, it looks after expensive medical treatments, including OPD and hospitalisation charges.|
|Private Medical Insurance Scheme||CPF Members who wish to purchase additional insurance cover can do so by using the money from their Medisave account, enhancing the protection through Integrated Shield Plans.|
|ElderShield||Targeting people with severe disabilities, it is an insurance scheme designed to give a certain degree of financial protection to them.|
|Pioneer Generation Package (PGP)||To celebrate the pioneers who helped build our great nation, the Pioneer Generation Package provides a sense of protection and belonging to these great contributors.|
|5-Year Medisave Top-Up||Not all members of CPF Singapore are eligible under the Pioneer Generation Package, and this scheme was designed exclusively for those individuals who are over the age of 55 years and not covered by the benefits of PGP.|
*The Medishield Scheme has been replaced with the Medishield Life Scheme from November 1, 2015.
CPF Investment Schemes – Singaporeans are known for their penchant to maximise resources, and the investment schemes offered by CPF provide members an opportunity to do the same with their accounts.
|CPF Investment Scheme or CPFIS||To give members who wish to make more money an opportunity to invest in multiple instruments, thereby increasing their retirement package.|
|Special Discounted Shares (SDS) Scheme||To make every member feel like a contributor to the development of Singapore. This is done by offering shares of Government Assets and projects to interested members, at special rates.|
CPF Dependents’ Protection Schemes – This scheme aims to offset the unpredictability of life by providing a financial net to the family members of an individual in the event of his/her death or total permanent disability.
CPF Education Schemes – This loan scheme ensures that members can pursue their educational dreams, without worrying about funds. It can be used to educate either the member himself/herself, or his/her dependents.
Other Services administered/implemented by CPF
In addition to the aforementioned schemes, the CPF Board handles and implements a host of other schemes which are aimed at benefitting the citizens and residents of Singapore. Some of these schemes are highlighted below.
GST Voucher Scheme - A project designed to aid members from the lower and middle income groups, it aims to provide these sections of the society sufficient funds to meet their financial requirements. GST or the Goods and Services Tax can account for a sizeable chunk of a family’s expense, with these vouchers helping said families cope with the pressure of paying this GST. There are currently 3 such vouchers, with two of them being administered by the CPF Board.
|Cash||Amount directly credited to account or sent via cheques. Maximum is S$300 per year.||Singapore residents over the age of 21 years who have an income less than S$26,000 and who reside in HDB flats or private homes with low value.|
|Medisave Top-Up||Amount credited to Medisave account. Maximum is S$450 per year.||Senior citizens of the country who live in HDB flats or private homes with low value.|
|U-Save Rebate*||Maximum rebate of S$260 per year.||Singapore residents who own/live/rent out a HDB flat to other Singaporeans.|
*U-Save Rebate isn’t administered by the CPF Board.
The other schemes which are implemented/administered by the CPF Board are:
A major concern of most CPF members revolves around who gets the money in the event of their demise. The CPF Board introduced the CPF Nomination Scheme to offset any worries about this. Under this scheme, members can choose their nominees and the amount they are entitled to, with the savings distributed to said nominee(s) after the member passes away.
Types of CPF Nomination
There are three types of nomination facilities available, as indicated by the flowchart.
The primary purpose of CPF is to ensure that members do not face a financial crunch, and while it predominantly aims to cater to retired life, individuals can opt to withdraw the money in their account, under certain conditions.
CPF Withdrawal Statistics (2010-2015)
The table below highlights how CPF members withdrew money over the last 6 years.
|Amount withdrawn (S$m)||374.2||386.3||381.9||444.2||487.9||269.1|
|Other grounds for withdrawal|
|Amount withdrawn (S$m)||2,909.4||3,112.2||3,967||4,265.7||5,155.9||2,445.5|
|Number of withdrawals||263||280||295||331||425||180|
|Amount withdrawn (S$m)||440.4||295.8||1,488.9||2,069.1||1,980.3||244.5|
|Amount withdrawn (S$m)||1,362.3||1,393.8||1,563.5||1,735.2||1,845.1||902|
|Medishield/Medishield Life Scheme|
|Amount withdrawn (S$m)||429.8||446.7||817.6||766.5||892.8||341.1|
|Other (Misc.) Schemes|
|Amount withdrawn (S$m)||247||261.4||217.7||283.4||361.7||194.6|
*Figures are indicative up to June 2016.
Annual Limit – This is the cap on the combined contributions from the three accounts. The current annual limit is S$37,740.
Payable on/Not Payable on
CPF Rates vary depending on factors like the nationality of an employee, residency status, and age.
Employer’s CPF Contribution for Employees
An employer is expected to contribute a certain portion of the salary of an employee towards CPF, with this percentage changing according to different factors.
Adjustment and Refunds of CPF Contributions
There are instances in which an individual might require adjustments in his/her CPF account. This can arise due to human errors, including entering the wrong CPF Submission Number, payments made to wrong accounts, wrong contribution period, etc. One can use the Online Application Service to apply for such adjustments.
There could be instances where employers have entered wrong data which resulted in excess CPF deduction. Refunds in such cases can be claimed by using the Online Application Service tool on the CPF website.
Employers can choose to voluntarily contribute to the CPF of an employee, thereby boosting the retirement account of an employee. Such voluntary contributions can be made for employees who are either Permanent Residents or Citizens of Singapore.
- VC Limit – The current cap on CPF is S$37,740.
- Voluntary Contribution to Medisave – An employer can choose to voluntarily contribute an additional amount to the Medisave Account of an employee. This contribution could help an employee purchase additional medical insurance/help pay medical bills.
- E-Cashier – Members can use this facility to make electronic payments towards CPF.
Contribution Services at AXS Stations
Members can make voluntary contributions to their accounts through AXS stations which are present across the Island.
Checking CPF Balances in the CPF Statement
It is human nature to be curious about things, and it is natural for a member to know how much money he/she has in his/her CPF account. Individuals who wish to check their balance can do so by following a few simple steps.
How to check:
What it contains
Members can check information related to their account balance, transaction history and details pertaining to investments, education, and property.
Why is the statement important?
The statement is importance as it helps a member determine the amount present, helping him/her plan resources accordingly, thereby ensuring that the future is planned as per the needs.
CPF Statement on iPhone
CPF members who wish to see their CPF statement on their phone can do so through their iPhone, provided the phone has the CPF App. One can login using their SingPass ID and Password, post which they can view their statement by navigating to the “My Account Balance” tab.
The CPF Board of Singapore provides an option wherein people can compute the amount they will receive after they retire. This can be done by using the calculators, with different calculators provided for different purposes.
CPF Retirement Calculators
The table below highlights the different Retirement calculators available to members.
|CPF LIFE Payout Estimator||Helps a member figure out the monthly payout and bequest amount.|
|D-Bonus and V-Bonus Calculator||Helps members identify if they are eligible to get Deferment and Voluntary Deferment Bonus.|
|CPF Withdrawal Calculator||Members who wish to compute the lumpsum they can withdraw on turning 55 can use this calculator.|
|Ordinary Account – Special Account Savings Transfer Calculator||Individuals who move their savings from an Ordinary Account to a Special Account can use this calculator to determine the additional interest they can earn.|
|CPF Retirement Calculator||Helps members in assessing their retirement goals by computing the savings based on different aspects.|
|CPF Retirement Estimator||Helps members determine the savings they will need once they retire.|
CPF Housing Calculators
|CPF Housing Withdrawal Limits Calculator||Helps members assess the time it takes to reach the Withdrawal Limits on CPF Housing.|
|Home Protection Scheme (HPS) Premium Calculator||Can be used by members who wish to know the premium to avail a HPS policy.|
|Loan Repayment Period Calculator||Helps in computing the time required to clear a loan.|
|Monthly Instalment Calculator||Computes the monthly instalment a member is expected to pay towards clearing a loan.|
|Our First Home Calculator||Members can use this tool to determine the quantum of housing loan they are eligible for and the property cost, based on factors like their income and loan period.|
|Outstanding Loan Calculator||Members can use this tool to figure out the amount which is pending on their home loan once they attain a certain age.|
|Property with less than 60 years lease Calculator||Computes the amount one can use from their CPF account to purchase a property, subject to certain conditions.|
|Total Interest Calculator||Computes the interest a member will have to pay towards repaying a housing loan.|
|Home Loan Interactive Calculator||Computes the affordability of a home loan based on the lifestyle choices of an individual.|
CPF Healthcare Calculators
- Medisave/Medishield Life Claim Calculator – This helps a member compute the amount they are eligible to claim through their Medisave/Medishield cover.
Calculators for Self-Employed
|Self-Employed Medisave Instalment Calculator||Self-employed individuals can use this calculator to check the amount they are eligible to get under Medisave.|
|Self-Employed Medisave Contribution Calculator||Self-employed individuals can use this tool to compute the amount they need to contribute to their Medisave account.|
CPF Investment Calculators
|Expense Ratio Calculator||Members can compute the impact Expense Ratio can have on their returns using this calculator.|
|Stock and Gold Limits Calculator||Members can use this calculator to determine the amount they can invest in stocks and gold under CPFIS-OA.|
|Unit Trust Investment Profit and Loss Calculator||Members can compute the profit/loss on investments made by them in unit trusts using this calculator.|
CPF Contribution Calculators
|CPF Contribution Calculator||Specialised tool which calculates the CPF contribution for citizens and permanents residents of Singapore.|
|CPF Contribution Allocation Calculator||Helps members determine the manner in which CPF contributions would be divided into different accounts.|
|Additional Wage Ceiling Calculator||Computes the Additional Wage Ceiling for employees of the private sector.|
CPF Education Calculators
|CPF Education Loan Repayment Period Calculator||Helps members determine the time it would take to completely repay a loan.|
|CPF Education Monthly Instalment Rate Calculator||Students can use this calculator to calculate the monthly instalment to be paid on their education loan.|
CPF Protection/Insurance Calculator
- Insurance Estimator – Individuals who are keen to know the cover they would require to secure the future of their dependents in case of an unforeseen event can use this tool.
CPF Savings Calculator
- Savings Calculator – Individuals can use this calculator to get an estimate of the amount they need to save for a particular phase of their life.
CPF Calculators on iPhone
iPhone users are provided a CPF Contribution Calculator which can be used to compute the amount they should contribute in their CPF account.
CPF Service Charges
Employee Service Charges - Service charges for employees (members) are highlighted in the table below.
|Particular||Service Charge (S$)|
|Hard copies of statements from Jan 2011 to Dec 2015||5.35 per statement per year|
|Hard copies of statements from Jan 1997 to Dec 2010||10.70 per statement per year|
|Hard copies of statements from Jan 1996 to Dec 1996||5.35 per statement per year|
|Education scheme||10.70 for each deduction|
No fee is charged if members wish to access their statement online, through their SingPass ID.
Employer Service Charges – Employers are expected to pay the following charges for different services.
|Particular||Service Charge (S$)|
|To print list of foreign workers||26.75 for each requested month|
|To print records of past payment||26.75 for each requested month|
|Processing fee for manual CPF submission||7 for every employee for each month|
Note: Charges mentioned above are subject to change without prior intimation.
Members have virtual access to their CPF account and can view information through their SingPass IDs. These online services help one get a clear picture as to where their CPF account stands, with the popular ones listed below.
- Statements – This section permits one to access their statements, giving information on transaction history, investments, and medical history.
- Requests – The Requests Tab on the homepage can be used by members to modify/make changes to their CPF profile. One can choose to apply for CPF Life, make transfers, contribute money, withdraw, invest, etc. through this option.
- Messages – This service enables a member to view relevant messages pertaining to his/her account and take any action accordingly.
- Activities – Members can use this tab to monitor their recent activities, including latest transactions and status of applications submitted by them.
CPF Payment Services
- AXS Stations – AXS Stations which are present across the island can be used by CPF Members, Employers, and Self-Employed individuals to make payments depending on the user.
- E-Cashier – This helps members make electronic payments to the CPF Board, helping them save time and effort.
- Self-Service Automated Machine (SAM) – These machines can be used by members and self-employed individuals to make payments towards their MediShield Premium, HPS Premium, Medisave contributions, etc.
CPF Appointment Services
- Appointment – Members can utilise this facility to meet Customer Service Executives of CPF. One can choose a date and time which is convenient to them. This appointment can be booked online, through the official website of CPF.
- E-Medical Appointment – This can be used by members of the Home Protection Scheme (HPS) and can be booked through the official website of CPF. A medical examination could be required when members apply for either the cover or benefits under HPS, necessitating the need of an appointment.