CPF special accounts close from January

The Central Provident Fund (CPF) Special Accounts (SA) for members aged 55 and above will be closed starting from the second half of January 2025. This follows changes to the CPF Act passed in Parliament on October 14. Manpower Minister Tan See Leng said CPF members will be notified through a hard copy notification, email, or SMS when their SA is closed. The principle behind closing the SA is to ensure that CPF savings committed towards long-term retirement needs earn a higher long-term interest rate of at least 4 percent. Members’ SA savings will be transferred to their Retirement Account (RA) up to their cohort’s Full Retirement Sum (FRS). Any remaining balance will go to their Ordinary Account (OA). Members who have met the FRS can still earn the higher interest rate by voluntarily transferring their OA savings to the RA, up to four times the Basic Retirement Sum from January 1, 2025. Dr. Tan said members who want to retain the flexibility to withdraw their savings can choose to leave the money in their OA, earning the lower interest rate of 2.5 percent. After the SA is closed, members with investments under the CPF Investment Scheme can hold them until they sell or mature. The proceeds will then go to their RA up to the FRS, with any remaining balance going to their OA.

CPF account changes starting in January

The Home Protection Scheme (HPS) will also be expanded from mid-2025 to include about 100 more CPF members each year with certain pre-existing health conditions that are not severe. They will pay higher premiums but gain coverage at one of the lowest premiums available in the current market. Dr. Tan addressed questions from MPs seeking clarity on the types of conditions covered and the number of members who will benefit. The 100 additional members represent a fraction of the 1,400 CPF members currently rejected annually for HPS coverage due to pre-existing health conditions. Participation is voluntary, but members with more severe conditions cannot participate to ensure the HPS remains sustainable and affordable. Further amendments to the CPF Act will prioritize the recovery of public housing subsidies when Plus and Prime flats are sold. The HDB will recover a percentage of the resale price or market valuation before CPF savings used in the purchase are returned to the member’s account. The subsidy recovery rate is fixed at the point of resale, promoting a fair system for all flat buyers. Dr. Tan noted that these changes aim to evolve the CPF system to better serve the needs of Singaporeans throughout their lives.