Study on Greater Flexibility for Monthly CPF Payouts

Assoc Prof Walter Theseira asked the Minister for Manpower (a) whether the Ministry has studied allowing greater flexibility for eligible CPF members in choosing monthly payout amounts, such as deferring a portion of their monthly payout, to allow members to tailor CPF payouts to their changing incomes and expenditures as they age; (b) if so, what are the results of such studies; and (c) what are the policy considerations involved in allowing such greater flexibility.

We recognise that Central Provident Fund (CPF) members have varying needs in retirement. This is why we have provided members with a number of options to have flexibility in their CPF retirement payouts.

At age 55, CPF members are required to set aside savings up to their cohort Full Retirement Sum in the Retirement Account (RA). Members with sufficient property charge or pledge can also choose to set aside the Basic Retirement Sum instead. Members will then receive a steady stream of monthly payouts in retirement, depending on the amount they have in their RAs.

Members can consider the following options if they wish to receive higher payouts:

(a) set aside a higher amount in their RA, up to the prevailing Enhanced Retirement Sum. This can be done by topping up their RA in cash, or transferring CPF savings from their own Ordinary or Special Accounts or from their family member's CPF accounts to their RA.

(b) start payouts later. Deferring the start of payouts will increase their payout quantum, duration or both.

Members can also choose the CPF LIFE Escalating Plan that provides lower payouts at first and subsequently higher payouts that increase at 2% every year.

Beyond these options, members can also further adjust their payouts through CPF transfers and cash top-ups, even after they have started their payouts.

Overall, we have to carefully balance providing members with flexibility to meet their diverse needs with the need to keep the CPF system adequate and simple.

CPF members can approach CPF Board to better understand how the different payout options can meet their needs.