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The G is making changes to the CPF… Soon.

You may not know this, but in 2014 the government decided to review the Central Provident Fund after consultations with citizens (aka hearing a lot of complaints). Here’s a quick fact-sheet on what’s being done.

What is the CPF Advisory Panel?

The CPF Advisory Panel was appointed by MOM in September 2014. The Panel’s purpose is to study possible enhancements to key aspects of the CPF system, to make it more flexible to meet the needs of more Singaporeans and provide additional options in retirement.

They do this in part through focus groups with the public.

Who’s in the Panel?

The CPF Advisory Panel is chaired by Professor Tan Chorh Chuan, President of the National University of Singapore. For diversity, the Panel members include:

  • academics
  • financial industry practitioners
  • community representatives from the unions, social sector and grassroots

What will this Panel be studying?

  1. How the Minimum Sum should be adjusted beyond 2015 in order to meet the objective of delivering a basic monthly retirement payout for life.
  2. How to enable CPF members to withdraw more as a lump sum upon retirement, in a sustainable manner.
  3. How to provide an option for members who prefer CPF payouts that are initially lower but rise with time to help with increases in the cost of living.
  4. How to provide more flexibility for members who wish to:
  • Seek higher returns while balancing the higher investment risks involved, through private investment plans.
  • Invest in private annuities when they retire as an alternative to CPF LIFE.

What recommendations have they made so far?

  1. The Panel assessed that it would be prudent for CPF members turning 55 in 2016, to set aside enough CPF savings to provide for a Basic Payout of about $650 to $700 per month when they retire in 10 years’ time.
  2. To receive this Basic Payout, members would need to set aside a Basic Retirement Sum (BRS) of $80,500 as premiums in 2016.
  3. CPF members can withdraw their savings above the BRS subject to a CPF charge/pledge on the value of their property. This means that if the member sells his property, the amount of the charge/pledge will be returned to his CPF to supplement his basic payout (in case he needs to rent). Members who do not own their homes should set aside the Full Retirement Sum (FRS) at two times the BRS, or $161,000 in 2016.
  4. Those who want higher payouts should be able to top-up their CPF Life premiums with savings or cash up to the Enhanced Retirement Sum (ERS).
  5. CPF members should also be given the flexibility to defer their payout start age, up to age 70, to enjoy permanently higher monthly payouts of 6–7% for every year deferred.
  6. Basic Payout for successive cohorts should increase so that it remains adequate for basic retirement needs, taking into account long-term inflation and some increase in the standard of living. This means that the BRS will have to be adjusted (increased by 3% for each successive cohort of members turning 55 from 2017 to 2020)
  7. To cater for members who may have shorter-term cash needs in retirement, the Panel recommended that CPF members be given the option to withdraw up to 20% of their Retirement Account Savings at the Payout Eligibility Age, inclusive of the $5,000 that they were eligible to withdraw from age 55. The Payout Eligibility Age is currently 64 and will rise to 65 in 2018. (But CPF members need to remember their payouts will decrease)
  8. Every CPF member should be encouraged to have his/her own CPF LIFE plan, with incentives to top up the CPF accounts for lower balance family members. So husbands are encouraged to top-up for their homemaker wives etc.


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