SINGAPORE: A new investment scheme by the Central Provident Fund (CPF) Board will launch in 2028, aimed at helping long-term investors manage their retirement savings more effectively. Announced by Prime Minister Lawrence Wong during the Budget statement, this initiative responds to recommendations made by the CPF Advisory Panel in 2016.
Life-Cycle Investment Products
The new scheme is designed for CPF members who wish to take a balanced approach to risk and return without the burden of navigating the existing CPF Investment Scheme (CPFIS). It will feature life-cycle investment products, which automatically adjust risk exposure as investors approach retirement age.
- Investment portfolios will shift from higher-risk assets like equities to lower-risk assets such as bonds.
- Liquidation of investments will occur in phases, ensuring funds transition to the member’s Retirement Account up to their Full Retirement Sum.
Targeted at those with a longer time horizon, this scheme is voluntary, similar to the CPFIS. Wong emphasised that many people, despite being willing to take risks, do not excel at selectively trading stocks.
Simplified Choices with Lower Costs
To ease decision-making, the CPF Board will collaborate with two to three reputable product providers. This streamlined approach aims to minimise available options while maximising potential returns—participants will benefit from capped fees to keep costs low, making investment more accessible.
Starting from March, the CPF Board will engage with industry players to gauge interest and invite applications from potential providers, with announcements expected in the first half of 2027.
Additional Retirement Support
During the budget speech, Wong also highlighted other measures to strengthen retirement support for Singaporeans:
- CPF top-ups of up to S$1,500 for individuals aged 50 and above with savings below the basic retirement sum.
- Gradual increases in CPF contribution rates for workers above 55, with plans for a rise to a 37% contribution rate by around 2030.
- A S$400 million top-up to the Long-Term Care Support Fund, providing further financial relief to seniors.
As market conditions evolve, the CPF Board and the Ministry of Manpower are keen to introduce effective retirement planning products, setting a solid foundation for the future of Singaporean retirees.