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Central Provident Fund
Singapore
Presented by
Ms Fiona Chan
Deputy Director, Member Education
CPF Board, Singapore
October 2008
Presentation Outline
Introduction to Central Provident Fund
Creating Informed CPF Members Who Undertake Retirement Planning
CPF Board’s Financial Literacy Programmes
CPF BOARDTo enable Singaporeans to save
for a secure retirement
Central Provident Fund
Savings
Pension Size (end 2007)Fund Size 2007 : US$95b (S$137b)
All working Singaporeans & Permanent Residents contribute to CPF savings
Contribution rates between 34.5% and 10% (Employers: 14.5% to 5%, Employees: 20% to 5%)
Contribution ceiling capped at US$3,200 (S$4,500)
Central Provident Fund
Savings
Population – 4.6 million
CPF members – 3.16 million
“Active members” – 1.55 million
(refers to those with any CPF contribution over the
last 3 months)
Average balance* for active members
US$106,000 (S$148,028)Above data as of end-2007
*Refers to regrossed balances including amounts withdrawn for housing, investments & education
Central Provident Fund
Savings CPF Savings
Can be used by CPF members for housing, healthcare, investments, insurance, and education.
Retirement
Balances in excess of the Minimum Sum (currently about US$76,000, adjusted early) can be withdrawn at age 55
Minimum Sum paid out to members over a 20-year period from age 62 (to gradually raise to 65)
CPF system currently being tweaked to include compulsory annuity for eligible groups (launch date 2013)
Need For
Financial Education
Changing demographics – a fast ageing
population
Erosion of CPF savings ie. unwise
investments, excessive expenditure on
housing
Heavy reliance on CPF savings for retirement
Population not quite prepared to undertake
early retirement planning
Ageing Population &
CPF Members1985
0.9%
3.0%
10.1%
11.0%
9.6%
7.4%
4.2%
3.9%
2.9%
2.0%
2.2%
0.3%
3.3%
8.7%
9.3%
7.7%
5.5%
2.8%
2.4%
1.5%
0.7%
0.6%
14% 12% 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% 12% 14%
Unspecified
Under 20
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 and above
Ag
e g
ro
up
s
CPF members (%)Male (%) Female (%)
2007
0.5%
1.6%
3.1%
4.0%
4.7%
5.3%
6.8%
7.2%
5.9%
4.4%
7.9%
0.1%
1.7%
3.2%
4.1%
4.8%
5.3%
6.0%
6.1%
5.2%
4.0%
8.3%
10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10%
Unspecified
Under 20
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 and above
Ag
e g
ro
up
s
CPF members (%)Male (%) Female (%)
Complacency In
Retirement Planning
MoneySENSE Financial
Literacy Survey 2005
Only 24% of Singaporeans actually calculatedhow much they need for their retirement
Many still underestimate the amount of fundsneeded for retirement
42% had the misconception that their CPFSavings at retirement will provide them withfunds equivalent to their last drawn salary
Singaporeans need help with theirfinancial literacy!
CPF Board’s
Financial Literacy Programmes
Our Education Programme
Starting PointMembers know and understand:
Their own retirement goals & needs(desired retirement age, funds to last x years, how
much they need to save, etc)
The need to start early retirement planning
How to optimise & grow CPF savings
DestinationAt point of retirement (at desired age),
CPF members have set aside:
the required CPF Minimum Sum
Private savings to supplement CPF monies
Education on
De-cumulation Phase•How to make the CPF
Minimum Sum lasts longer
•How to ensure not to outlive
your savings
Education on
Accumulation Phase•How to get there
•What to start doing now
•What are the check
points/milestones
my cpf – Different Strokes
for Different Folks
12 main life events, each combining different CPF schemes
and services, serve citizens at different stages
of their lives.
Regular Newsletters
In The Newspapers
Regular Talks & Seminars
Online Self-Help Portals
& Calculators
Bring Retirement Planning To
Both Young & Old through
Events
What Works
Targeted Messaging ie. segmentation by life events
Engaging a variety of channels, especially online media
Provide self-help tools ie. online calculators & one-stop portals
Strategic partnerships – create strong ties with like-minded partners
Key Learning Points
Simplify & simplify messaging
(use of cartoons helps)
Constantly gathering feedback on programmes to gauge effectiveness & to improve
Providing “actionable” tips – ie. topping up the CPF accounts or transferring monies between accounts to take advantage of extra interests
Thank You!