What is Central Provident Fund (CPF)?
CPF is a social security system that enables working Singaporean Citizens (SC) and Permanent Residents (PR) to set aside funds for retirement. Both employees and employers make monthly CPF contributions, which is distributed to three accounts:
|CPF Accounts||Usage of the CPF savings|
|Ordinary Account (OA)||For housing, insurance, investment and education|
|Special Account (SA)||For old age and investment in retirement-related financial products|
|Medisave Account (MA)||For hospitalisation expenses and approved medical insurance|
|Retirement Account (RA)||RA is automatically created on your 55th birthday.|
Should a CPF nomination be made?
If a CPF nomination is made, it will be distributed to the nominee(s) in the proportion stated.
If there is no CPF nomination made, the CPF savings will be forwarded to the Public Trustee for distribution in accordance with the intestacy laws of Singapore. CPF savings cannot be distributed via a will, and the Public Trustee charges a fee for administering un-nominated CPF money.
Use of Medisave to pay the last hospitalisation bill
The deceased member’s Medisave can be used fully to put for his hospitalisation bill if he had signed the Medisave Authorisation Form (MAF) before his death.
If he did not sign the MAF, his immediate family members (spouse, parents or child who is 18 years and above) or donee/deputy could sign the MAF. This must be done as soon as possible so that hospitals could submit the Medisave claim before the member’s CPF savings are distributed.
Distribution process of CPF monies
You do not need to report the death as CPF Board will be notified by the relevant public agency and will distribute the CPF monies accordingly.
If there is a CPF nomination, the nominee(s) will be contacted within 15 working days from the date the Board is notified of the member’s death. As a general rule, the money will be distributed within 4 weeks from the date of receipt of full documentation from the nominees.
Items not covered under the CPF Nomination will form part of the deceased member’s estate.
|Covered under CPF Nomination||Not covered under CPF Nomination|
1. CPF savings in Ordinary, Special Medisave and Retirement Accounts
2. Unused CPF LIFE premiums (if any)
3. Discounted SingTel shares
1. Properties bought using CPF savings
2. Payouts from Dependants’ Protection Scheme (DPS)
3. Cash and investments held in the CPF Investment Accounts (CPFIS-OA and CPFIS-SA)
Fees for administration of un-nominated CPF savings.
|Amount of CPF savings||Charge (%)|
|For the first $1,000||2.4|
|For the next $9,000||1.5|
|For the next $240,000||0.75|
|For the next $250,000||0.45|
|For amounts in excess of $500,000||0.3|
The fees are charged by the Public Trustee’s Office and will be taken from the CPF savings, include GST. The amount cannot be waived and there is a minimum fee of $15.
Other points to note
- You can choose how your nominee(s) receive your CPF savings, either by cash lump sum or transfer to the nominee’s CPF accounts via Enhanced Nomination Scheme (ENS).
- If a nominee is under 18 and is not the deceased’s widow, the Public Trustee will hold the money until the person turns 18. If the nominee is the deceased’s widow and is under 18, the CPF will pay out immediately.
- If there is no CPF nomination, the Public Trustee will hold the money until the beneficiaries turn 21.
- You may claim a reimbursement of funeral expenses out of the deceased CPF money, up to $5,000. Only a beneficiary is eligible to claim.
- The balance in your CPF is protected from creditors, but not any CPF savings used for investments. If you have creditors, it is recommended that you liquidate any CPF investments before death so that the funds are transferred back to your CPF balance and be protected.
Saving money isn’t about being able to buy bigger and better things. It’s about being prepared to take care of your family. – Dave Ramsey