Several Changes To CPF Scheme Kick In From Jan 1

Source : TODAY, Thursday, December 13, 2007

Singaporeans will continue to enjoy a 4-per-cent interest rate on their Special, Medisave and Retire- ment Accounts (SMRA) for the Jan 8 to March 8 quarter next year as several changes to the CPF scheme kick in from Jan 1.

In a statement yesterday, the Central Provident Fund Board said that savings in the SMRA would be pegged to the 12-month average yield of the 10-year Singapore Govern- ment Security (10YSGS) plus 1 per cent.

The average yield of the 10YSGS from Dec 1, 2006, to Nov 30, 2007, plus 1 per cent worked out to 3.9 per cent.

To help CPF members adjust to the floating SMRA rate, the Government will maintain the 4-per-cent floor rate for two years if the 10YSGS plus 1 per cent dips below 4 per cent.

However, after two years, the 2.5-per-cent floor rate will apply for all CPF accounts.

An additional 1 per cent interest will be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA).

The additional interest received on the OA will go into the members' Special or Retirement Account to enhance his savings for old age.

CPF members turning 55 and who meet the Minimum Sum must set aside a required amount (RA) in their Medisave Account when they make a withdrawal.

From Jan 1, the RA will be raised to $14,000 from the current $11,500, increasing by $2,500 each year until it reaches $25,000 on Jan 1, 2013.

The changes will also affect the CPF Minimum Sum top up and investment schemes and housing withdrawal limits.

For details, log on to www.cpf.gov.sg or call 1800-227 1188.