4.1m CPF members' balances hit record S$462.1 billion in 2020

Read? 4.1m CPF members' balances hit record S$462.1 billion in 2020

Despite the pandemic, the CPF Board reported that voluntary top-ups into the special account and retirement account also reached a new high at S$3 billion in 2020, having jumped 39 per cent year on year from S$2.15 billion. More than one-third of these members were topping up for the first time.

CPF members invested S$17 billion of their ordinary account savings and S$5.5 billion of special account savings last year, under the CPF Investment Scheme.

Of the 40,000 active CPF members who turned 55 in 2020, 63.6 per cent were able to set aside the Full Retirement Sum for their cohort, or set aside at least the Basic Retirement Sum while owning at least one property.

Meet the investment needs of the CPF

Read? Issuing limits raised for Singapore government securities and treasury bills

Read? CPF members added $1.6b to retirement funds from January to October, up from a year ago

THE issuing limits for government securities and treasury bills have been raised to meet Central Provident Fund (CPF) needs and cater to growing investor demand, with Parliament having voted to authorise this on Tuesday.

Special Singapore Government Securities (SSGS) are non-tradable bonds issued primarily to meet the investment needs of the CPF; Singapore Savings Bonds are issued to provide a long-term savings option for individual investors.

Hmm .. investment needs of the CPF??? 

To pay interests? Right?

Basic Healthcare Sum for 2021

 CW8888: Last year to top up MA as self employed to earn 4% interest rate in MA.  65 in 2021. Sianz! Sigh!

The Basic Healthcare Sum (BHS) is the estimated savings required for basic subsidised healthcare needs in old age. The BHS is adjusted yearly for members below age 65 to keep pace with the growth in MediSave withdrawals. Once members reach age 65, their BHS will be fixed for the rest of their lives.

From 1 January 2021,

1. For members below 65 years old, their BHS will be raised from $60,000 to $63,000.

2. For members who turn 65 years old in 2021, their BHS will be fixed at $63,000, which will not change thereafter.

For members aged 66 and above in 2021, their cohort BHS had already been fixed and will remain unchanged.

BHS is the cap to the MediSave Account (MA) and contributions in excess of a member’s BHS will be automatically transferred to his or her other CPF accounts. A higher BHS will allow for more savings to be kept in a member’s MA for his or her healthcare needs. CPF members do not have to top up their MA if they have less than the BHS.

CPF Basic Healthcare Sum Increases to $60K in 2020

You can see more bloggers starting to express delight with CPF BHS yearly increase! 

Did you see anyone complaining to their MP on this increase?

4% compound interests shiok to the bone!

LOL!

Who Loves My CPF???

Market decline drags CPFIS-included funds into losses in 2018

FUNDS included in the CPF Investment Scheme (CPFIS) posted losses in 2018, pulled down by a sharp downdraft in global markets towards the end of the year.

CW8888: We are still in Bull Run phase. No worry!

CPFIS Investment Statistics

Hmm .. more CPF members realized better don't play play with their CPF OA money may be after kena the last Bear market in 2008/2009???

More CPF investors beat guranteed risk-free returns in fiscal 2016

Read? More CPF investors beat guranteed risk-free returns in fiscal 2016

MORE CPF members who invested their savings in their ordinary account (OA) under the Central Provident Fund Investment Scheme (CPFIS) outperformed the guaranteed annual 2.5 per cent interest rate per annum in fiscal year 2016.

Some 78 per cent of active CPF investment account holders or 441,000 members achieved profits larger than 2.5 per cent in the 12 months to Sept 30, 2016 as equity markets recovered from the 2015 rut. Some 12 per cent or 66,000 active CPF investors incurred losses on their investments.

This was a marked improvement from the preceding fiscal year, when only 27 per cent of active CPF investors made profits larger than 2.5 per cent or 159,000 members while some 58 per cent or 340,000 members made losses.

Under the scheme, CPF members can invest in CPFIS-included funds such as approved unit trusts and equity funds, as well as other investment products such as stocks and shares, after setting aside S$20,000 and S$40,000 in their OA and Special Account (SA) respectively.


The CPF Board has tweaked the way it measures the performance of investments made through OA savings under the CPFIS to be more aligned with the industry practice of fund managers.

It has excluded CPFIS account holders with no investments, and factored in unrealised gains or losses for investments held during the reporting period from Oct 1 to Sept 30.

Previously, the annual report on the performance of CPFIS-OA only captures realised profits or losses and includes all members with a CPF Investment Account even if they have no investments.

The change in the formula will hence better reflect members' total investment portfolio performance, rather than just realised performance. But it will also lead to more volatile changes in performance on a yearly basis.

To reflect longer-term performance, the CPF Board will also provide the cumulative profit or losses over time.

These changes are made in response to an observation by the CPF Advisory Panel in August 2016 that the investment performance under CPFIS could include unrealised returns where relevant.

But given the resource constraints for industry players to re-compute the data using the new methodology for past years, the CPF Board could only go as far back as fiscal 2015.

Applying the new methodology for fiscal 2015, the proportion of members with losses was revised to 58 per cent from 38 per cent under the old method. (CW8888: Wah!)

The proportion of members who made profits larger than the guaranteed annual 2.5 per cent interest rate for OA savings was 27 per cent instead of 16 per cent.

The old way of calculating also included CPF members who have an investment account but did not make any investment last year, while the new method excluded that group. The previous calculation included 909,000 members while the new method covers 583,000 members.

CW8888:

58% or 340,000 CPF members lost money (realized & unrealized) 
27% made more than 2.5%
15% breakeven


Hmm ... Look like there may be more demand for investment talks and courses!


Look at STI!

Mr. Bear is still sleeping!

When Mr. Bear wakes up ... may be 90% will lose money!

Number of 55-year-olds with Basic Retirement Sum to go up

SIX in 10 active Central Provident Fund (CPF) members now accumulate enough savings for their Basic Retirement Sum account when they turn 55. The number, first achieved in 2013, is likely to rise to seven in 10 for members turning 55 in 2020.

Manpower Minister Lim Swee Say said that with higher wages and a higher labour-force participation rate, especially among older workers, CPF balances are expected to keep improving in the coming years.

He was replying to queries raised during the Committee of Supply debate on his ministry in Parliament on Monday.

Several enhancements were introduced last year to help CPF members to save more for their retirement. Examples are the higher CPF ceiling, improved ease of transfer of CPF savings to the account of one's spouse and the Enhanced Retirement Sum.

Mr Lim said that the enhanced savings are for retirement use, and that the government will not allow these savings to be used for overseas training courses, despite many calls for it.

Mr Lim noted that while CPF money can already be used to support basic tertiary education in local approved institutions, the government must also do more to safeguard CPF members' retirement adequacy - especially now that lifespans have improved.

"So we need to be careful about expanding the use of CPF for other purposes," he said.

The minister said MOM is working on improving three aspects of the CPF Investment Scheme (CPFIS): The first is the introduction of a self-assessment tool which members can use to determine whether CPFIS is suitable for them; the second is the lowering of the cap on sales charge to discourage financial intermediaries from proactively selling products to CPF members; the third is a review of the asset classes offered under CPFIS to gauge their suitability for growing retirement savings.

These changes will be announced later in the year. CPF members who prefer a simpler investment option can look forward to the CPF Lifetime Retirement Investment Scheme, the details of which MOM is working on, said Mr Lim.

The CPF Retirement Planning Service, which was piloted last year to help members make informed decisions about their CPF savings, will be available to all members turning age 54 this year.

At the one-on-one session, Customer Service Executives will use personalised information to help members understand what will happen to their CPF balances when they turn 55 and the options available to them.

Is CPF Accrued Interest for our housing loan increasing and we have to pay back one day when we sell our house? (Refresh)

Thursday, 24 December 2015

Read? Is CPF Accrued Interest for our housing loan increasing and we have to pay back one day when we sell our house?

Is CPF Accrued Interest for our housing loan increasing and we have to pay back one day when we sell our house?

Before 55 ....



 





No. Once we reach 55, this CPF accrued interest is game over!

 

Historical CPF Interest Rate

First Singapore Savings Bond to be issued on Oct 1: MAS

Uncle8888 is not excited as he already has Singapore's "Savings Bond" since 15 Sep 2011 when he turned 55. No penalty for withdrawal but it will require at least five working days to process the request. LOL!

SINGAPORE: The first Singapore Savings Bond will be issued on Oct 1, 2015 and retail investors will be able to apply for them from Sep 1.

This was announced by the Monetary Authority of Singapore (MAS) on Tuesday (Jul 21) at a press conference on its annual report for financial year 2014/2015.

Singapore Savings Bonds are a special type of Government bonds that cater to individual investors. The Singapore Savings Bonds are aimed at giving individuals a long-term savings option with safe returns. The principal is guaranteed, and they can be redeemed at any time with no penalty.

The interest rates will be linked to long-term Singapore Government Securities (SGS) rates. For the last 10 years, the yield has been between 2 and 3 per cent per annum.

The Savings Bonds will pay an interest rate that increases over time. This means that the longer one holds them, the higher the yield.

Details of the first issue such as the amount of bonds available and the interest rates will be released when applications open. Applications will close on Sep 25.

Successful applicants will receive their Savings Bonds in their Central Depository (CDP) accounts on Oct 1.
Interested investors will be able to apply through ATMs of all participating banks - DBS/POSB, OCBC or UOB - or through internet banking for DBS/POSB.

In order to apply, individuals must have an account with the participating banks, and an individual CDP Securities account with direct credit service enabled.

MAS said a new Singapore Savings Bond will be issued every month for at least the next five years, so there is no need to rush for the first issuance.

For 2015, the Government plans to issue S$2 billion to S$4 billion worth of Savings Bonds.

There is a cap on the amount that investors can hold. They can buy a maximum of S$50,000 for any single issue and hold a maximum of S$100,000 overall. 

The Savings Bonds website is accessible at www.sgs.gov.sg/savingsbonds and members of the public can call the Savings Bonds hotline at 6221 3682 to find out more about the programme.

- CNA/av/ms

Many CPF investors get their fingers burnt!

Only 15% made profits larger than 2.5% and 40% made losses: Report.

In the financial year ended Sept 30 last year (2014), 902,300 investors sold their CPFIS investment.


CW8888: 361K CPF members lost their hard earned saving!


Investing stocks as advertised in the newspapers, social media, blogs, and forums look and talk so easy.

Yesterday Uncle8888 read the best BS so far in the investment and finance blogging sphere; from $30K to $1M in 5 years; it can be as easy as 30-20-20 rule. LOL!

Additional 1 per cent extra interest on the first S$30,000 of CPF balances from the age of 55.

$300 more from CPF for me to lim Kopi!

No fish. Prawn also can!

CPF Contribution and Allocation Rates from 1 January 2015

From 1 January 2015, the CPF contribution rates for all employees will be increased to help them save more for retirement and healthcare needs. The following will apply to wages earned from 1 January 2015:


Increase in Employer’s CPF Contribution Rates

For employees aged below 50 or above 65 years, the employer contribution rates will be increased by 1 percentage point. The increase in CPF contribution will be allocated to the Medisave Account.

For employees aged above 50 to 55 years or above 55 to 65 years, the employer contribution rates will be increased by 2 and 1.5 percentage points respectively. The increase in CPF contribution will be allocated to the Medisave and Special Accounts.

Increase in Employee’s CPF Contribution Rates

For employees aged above 50 to 55 years, the employee contribution rates will be increased by 0.5 percentage point. For those earning wages of >$500 to <$750, the contribution rates will continue to be phased-in. The increase in CPF contribution will be allocated to the Ordinary Account.

From 2015, the CPF Annual Limit will be increased to $31,450. 

The Ordinary Wage Ceiling remains unchanged.

Age Group	Before 1 Jan 2015	Wef 1 Jan 2015
35 and below	16%	17%
35-45	16%	17%
45-50	16%	17%
50-55	14%	16%
55-60	10.5%	12%
60-65	7%	8.5%
Above 65	6.5%	7.5%

CPF members leaving S'pore withdrew more than $400m each year from 2003 to 2013

SINGAPORE: From 2003 to 2013, Central Provident Fund members leaving Singapore withdrew $426 million, or 0.3 per cent of the average total members' balances each year. This includes the amounts withdrawn by former citizens, former Permanent Residents (PRs) and foreigners who contributed to CPF before 2003.

Manpower Minister Tan Chuan-Jin gave this update in Parliament on Thursday (May 29). He said the CPF Board does not track the amount separately for PRs who have given up residency.

On whether they can return to Singapore to work, Mr Tan said evaluations will be done to determine their suitability. The Government will look into their track record and history before making a decision.

- CNA/xk

Property assets make up 80% of Singaporeans' wealth

SINGAPORE: Property assets make up 80 per cent of the total wealth of an average Singaporean, according to financial advisory firm Financial Alliance. 

And with Central Provident Fund (CPF) money being used for property purchases, savings meant for retirement are being locked up in real estate.

Amid this backdrop, the Ministry of Manpower has said it will "review and make improvements" to the CPF system.

This follows President Tony Tan Keng Yam's address in Parliament last Friday.

The CPF Minimum Sum is the amount of money that one needs to set aside in the CPF account on reaching the age of 55.

And if there are insufficient funds, individuals will not be able to withdraw any cash at all although they will receive monthly payouts.

Financial advisors say less than half of Singapore's working population have enough to meet the minimum sum, which is currently S$155,000.

Tan Siak Lim, financial advisory director at Financial Alliance, said: "So today, I think that's the challenge. And I guess the reason why we are in the current situation is because of appreciating assets in the property (market)."

With property prices rising steadily over the past decade, more CPF money meant for retirement has been committed to mortgages.

For a middle income earner in his forties with multiple dependants, in order to retire comfortably Financial Alliance says he will need to save about a third of his monthly salary.

Mr Tan said: "There're already plenty of private sector investment products, retirement products for the consumer to choose (from). So that is not the problem.

"The problem is -- 'where is the money to invest in these products?'"

He said for an average, middle to low-income earner, there is not a lot of surplus cash beyond just meeting one's monthly living expenses.

To ensure retirement adequacy, the government is looking at options such as reverse mortgage schemes to help retiring or retired Singaporeans unlock the value of their homes.

Under a reverse mortgage, the owner retains the full lease of his flat but takes a loan against it as collateral.

The owner then repays the loan with accumulated interest upon termination, or death, usually with the sales proceeds from the flat. 

- CNA/al

CPF Minimum Sum to be raised from July

SINGAPORE: The CPF Minimum Sum will be raised to S$155,000, up from S$148,000, from 1 July.

This will apply to CPF members who turn 55 between 1 July 2014 and 30 June 2015, the Central Provident Board (CPF) and the Manpower Ministry said in a joint statement.

Under the CPF LIFE Standard Plan, setting aside S$155,000 at age 55 provides a lifelong payout of about S$1,200 per month, the statement added.

The Medisave Minimum Sum will be raised to S$43,500 from S$40,500 from 1 July.

A member will need to have this amount in his Medisave Account and also meet the CPF Minimum Sum before excess funds can be withdrawn.

The Medisave Contribution Ceiling will be increased correspondingly to S$48,500 from S$45,500.


This is the maximum balance a member can have in his Medisave Account.  

- CNA/xq

Changes to CPF contribution rates from January 2015

Employer contribution rates to the Medisave Account (MA) will be increased for all workers to help them save more for healthcare needs. Workers aged above 50 to 65 will see an additional increase in the employer contribution rates to the Special Account (SA) to help them save more for retirement.

Employee contribution rates to the Ordinary Account (OA) will increase for workers aged above 50 to 55.

The table below shows these increases in CPF contribution rates for Singapore Citizens (SCs), and for Singapore Permanent Residents (SPRs) from their 3rd year of obtaining SPR status.

Increases in CPF contribution rates for SCs and SPRs from January 2015

Employee's age (years)	Percentage point increase in CPF contribution rates (for wages ≥ $750)			Allocation of increase
	Contribution by employer	Contribution by employee	Total	OA	SA	MA
50 and below	+1%	-	+1%	-	-	+1%
Above 50 - 55	+2%	+0.5%	+2.5%	+0.5%	+1%	+1%
Above 55 - 60	+1.5%	-	+1.5%	-	+0.5%	+1%
Above 60 - 65	+1.5%	-	+1.5%	-	+0.5%	+1%
Above 65	+1%	-	+1%	-	-	+1%

Medisave contribution rates for Self-Employed Persons (SEPs) with annual net trade income of $18,000 and above will be raised by 1%.

The rates in the table below are applicable to SEPs for annual net trade income from 2015.

Contribution rates applicable to SEPs from 2015

Annual net trade income (from 2015)	Age as at 1 January of work year
	Below 35 years	35 to below 45 years	45 to below 50 years	50 years and above
Above $6,000 to $12,000	4%	4.5%	5%	5.25%
Above $12,000 to $18,000	Phased in* from 4% to 8%	Phased in* from 4.5% to 9%	Phased in* from 5% to 10%	Phased in* from 5.25% to 10.5%
Above $18,000	8% (Maximum $4,800)	9% (Maximum $5,400)	10% (Maximum $6,000)	10.5% (Maximum $6,300)

*Please refer to the CPF website for the phased-in rates.