CPF changes in 2008

Increasing CPF returns

From 1 Jan 2008, all CPF members will earn an extra 1% interest on the first $60k in their CPF accounts. This includes up to $20k from the Ord account and $40 from the Special, Medisave and Retirement Accounts (SMRA). Or, up to $60k from the SMRA, ir the OA has less than $20k. The additional interest will go into the SMRA to add to retirement or Medisave savings.

Because of the extra interest, restrictions will be placed on funds in the Ordinary and Special accounts. From 1 April 2008, the first $20k in these accounts will not be allowed for use in CPF investment Schemes (CPFIS). They can however still be used for housing and education. Money that has already been invested under the CPFIS will not be affected.

Also from 1 Jan 2008, the interest rate formula for the SMRA will be changed to the yield (or effective rate of interest) of the 10 yr Singapore Government Securities (SGS) plus 1%. If the new SMRA formula had been in place since 1999, the SMRA rate would have average 4.5%. To help members adjust to the floating SMRA rate, the minimum interest rate for the SMRA will remain at 4% for two yrs.

( from www.cpf.gov.sg )
The first $60,000 in your combined CPF balances, with up to $20,000 from your OA, will earn an extra 1% interest. So, leave your money in your CPF accounts to enjoy this extra interest!


http://www.straitstimes.com/Free/Story/STIStory_219566.html?vgnmr=1

http://www.moneysense.gov.sg/resource/publications/quick_tips/MoneySENSE_column_CPF%20Statement1of2.pdf

http://www.mom.gov.sg/publish/momportal/en/general/Enhancing_Retirement_Adequacy.html

Key CPF Reforms At A Glance

The Central Provident Fund Board has announced a series of changes to the existing CPF scheme come January 2008

- From 1 january 2008, the CPF Board will be paying an additional 1% interest on the first $60,000 of the member's combined CPF balances, with up to S$20,000 from the Ordinary Account (OA).

- The SMRA ( Special, Medisave and Retirement Accounts ) interest rate will be pegged to the yield of the 10-year SGS ( Singapore Government Bonds ) plus 1%. SMRA money in the extra-interest tier will earn 5%.

- By 1 january 2012, employers will be required by law to offer reemployment to workers reaching age 62, to work up to age 65 and eventually to age 67.

- The Minimum Sum DDA ( Draw Down Age ) will be raised progressively from the current 62 years to 65 years in 2018.


http://newpaper.asia1.com.sg/columnists/story/0,4136,144298,00.html?

http://sgfundinvestor.wordpress.com/2007/11/26/latest-cpf-reforms/