New CPF Policy from 1 Nov 2021

Recently there was some announcement on some changes to CPF policies. It was just months before that I went through the CPF website to fully understand how the CPF life works. (Our national Annuity Plan) There were so many more things to digest and now with the changes, I've got to study what new changes are ahead.

Nevertheless, I'm excited to know that they will be extending the retirement age to 65 for those who wish to continue to work. I think it's a good idea. It's not just about the money. Staying at home and doing nothing is not good for the mental health. For some, it may cause dementia to start at an earlier age. That's why I prefer to continue working as it keeps the mind active.

There are some changes for those who are under the retirement sum scheme. I guess this is for the group of people who don’t qualify for the CPF Life Scheme. For now, members will continue to receive pay-outs only when they manually apply to transfer the money from their ordinary account and special account to their retirement account. They are going to make this automatic from the first quarter of 2022. Is this a good thing? Those who are pro-CPF and didn’t do any withdrawals even though they continued working after 55 will be happy. I guess we can’t say the same for those who are anti-CPF.

CPF Life members will have their money transferred from OA and SA to their RA automatically. So no manual transfers are required. Well, that’s how I understand it from the news.

From January 2023 onwards, members can now have the flexibility on when to transfer funds from SA and OA to their RA anytime between the age of 65 and 70. Under the current rules, the transfer only takes place once they are eligible to start their pay-outs. But seriously who wants to wait if we’re talking about OA that earns only 2.5% interest instead of 4%?

They’ve also simplified the rules for tax relief relating to voluntary contributions. From 1^st January 2022, tax relief will be given to the givers when there is a contribution to the medisave account scheme.  The cap for topping up of the special account/retirement account to qualify for tax relief will be raised from $7,000 to $8,000.

From April 2022, when a member dies, the duration that CPF money is retained after death will be shortened to 6 months. The discounted Singtel shares will also be liquidated and disbursed 6 weeks after the member’s death.

That’s whole lot of news to digest. There is so much about the CPF Life scheme to understand. I will try to blog about it as the weeks go by.