Prevalence of Practice of "Special Account (SA) Shielding" by CPF Members

Mr Melvin Yong Yik Chye asked the Minister for Manpower (a) how prevalent is the practice of "Special Account (SA) shielding" by CPF members who shield their SA monies from flowing into the Retirement Account at age 55; and (b) whether the Ministry intends to review the current CPF policy to address this trend.

We are aware that some members invest their Special Account (SA) savings shortly before age 55 and liquidate it after age 55, to retain more Central Provident Fund (CPF) savings in their Special Account (SA). In 2021, about 2% of CPF members turning 55 invested their SA monies under the CPF Investment Scheme-Special Account (CPFIS-SA) within six months before they turned age 55 and liquidated their investments within six months after they turned age 55. Some of them may have done so to prevent their SA monies from flowing into the Retirement Account at age 55.

We would like to reiterate to CPF members that the investment of SA monies comes with costs and investment risks – there are transaction fees involved and members may lose a portion of the amount invested. Financial advisers and insurance brokers who promote this practice without highlighting the costs and investment risks may be guilty of mis-selling and should be reported to the Monetary Authority of Singapore (MAS).

We will continue to monitor this trend closely and take action if necessary.