The CPF Minimum Sum will be raised gradually from $80,000 to $120,000 in 2013 (in 2003 dollars). Table A shows the schedule of increases in the CPF Minimum Sum in 2003 dollars, the year the changes were announced.

These amounts will be adjusted every year for inflation so that the value of the CPF Minimum Sum in future years is the same as that in 2003. This is because the value of money will fall as prices in general go up over time. It is therefore important that the CPF Minimum Sum maintains its value in future to help members meet their basic needs in old age.

The inflation rate is measured by the Consumer Price Index (CPI) as announced by the Singapore Department of Statistics. The previous years’ CPI will be used to compute the CPF Minimum Sum increase each year. The CPF Minimum Sum was increased by $6,400 to $106,000 with effect from 1 July 2008 after taking into account the inflation for the previous years.

Thus, the CPF Minimum Sum applicable to members who reach 55 years between 1 July 2008 and 30 June 2009 is $106,000 after adjusting for inflation.

A member may set aside the CPF Minimum Sum fully in cash or pledge his property up to 50% of the Minimum Sum. The cash portion ensures CPF members of a monthly income in retirement. If a member sets aside the CPF Minimum Sum of $106,000 fully in cash, he will receive a monthly payment of $910 from his draw-down age until his CPF Minimum Sum is exhausted. If the amount set aside is less than his Minimum Sum, the CPF Board will pledge his property (if any) to reduce the shortfall.

A Singaporean at age 62 (current draw-down age) today can on average expect to live another 20 years. The monthly payouts will last around 20 years for most members from their draw-down age.

CPF members have three options to invest their CPF Minimum Sums:
a. Buy a life annuity from a participating insurance company;
b. Place it with a participating bank; or
c. Leave it with the CPF Board.

If a CPF member buys a life annuity, he will receive a monthly income for life. If he leaves his CPF Minimum Sum with a participating bank or with CPF Board, he will receive a monthly income until his CPF Minimum Sum is exhausted. You may wish to start your monthly payouts later. It benefits you as your payouts will last longer.

To buy a life annuity plan, please contact any of the participating insurance companies. To place your Minimum Sum with a bank, please contact any of the participating banks. The list of participating insurance companies and banks is at Annex A.

*The Retirement Account is created when a member reaches age 55.

From 1 January 2009, members who reach 55 can only withdraw 40 percent of their Special and Ordinary Account balances, and then the remaining balances, if any, after they have met the CPF Minimum Sum and the Medisave Required Amount in the Medisave Account. This percentage of withdrawal will go down by 10 percentage points each year.

Please see the table below:

Withdrawal of Special and Ordinary Account Balances at age 55

From 1 January 2013, members who reach 55 can withdraw their Special and Ordinary Account balances only after setting aside the CPF Minimum Sum and Medisave Minimum Sum. However, members can still withdraw the first $5,000 at age 55 (see Question 2 below).

Please refer to Annex B for examples on CPF withdrawal.

Please see the table below:

If you have less than the Medisave Minimum Sum, you are not required to top it up. If you have more than the Medisave Minimum Sum, you can withdraw the excess amount.

If you meet the CPF Minimum Sum, you will need to set aside a Medisave Required Amount in your Medisave Account when you withdraw your CPF. The Medisave Required Amount is set at $14,000 from 1 January 2008 and will increase by $2,500 (in 2003 dollars) each year until it reaches $25,000 (in 2003 dollars) on 1 January 2013.

If you have less than the Medisave Required Amount, you can use your Special and/or Ordinary Account savings, in excess of the CPF Minimum Sum, to set aside the required amount.

The Medisave Minimum Sum will be adjusted every year for inflation in healthcare costs so that its value in future years is the same as that in 2003. This is because the value of money will fall as prices in general go up over time. It is therefore important that the Medisave Minimum Sum maintains its value in future to help members meet their healthcare needs in old age.

The adjustment to the Medisave Minimum Sum each year will be based on the previous year’s medical treatment component of the Health Consumer Price Index as announced by the Singapore Department of Statistics. The Medisave Minimum Sum was increased by $1,000 to $29,500 with effect from 1 July 2008.

Although each member is required to set aside the CPF Minimum Sum, couples can, as a concession, jointly set aside one and a half times the CPF Minimum Sum. However, they must nominate each other as beneficiary for their CPF Minimum Sums.

To apply for a combined CPF Minimum Sum, couples may visit any CPF office with their identity cards and original marriage certificate.

The deceased's Minimum Sum cash component in the Retirement Account will be transferred to the surviving spouse's Retirement Account up to the surviving spouse's full Minimum Sum. Any excess balance would be paid in a lump sum to the surviving spouse.

The remaining

• Annuity payment; or
  
• CPF Minimum Sum left with CPF Board or a participating bank

will be paid out in a lump sum to his beneficiaries if the member had made a valid CPF nomination. If there is no valid CPF nomination, the deceased’s remaining annuity payment, or the CPF Minimum Sum left with CPF Board or a participating bank will be transferred to the Public Trustee for distribution in accordance with the written law.

You must obtain consent from all co-owners of the property before you can pledge your property in lieu of part of your Minimum Sum. The amount that you can pledge for your property depends on:

• HDB’s quarterly average median resale prices for HDB flats or valuation price for private properties

• Outstanding loan amount (non-housing loan inclusive for private properties)

• Co-owner's CPF usage (if applicable to joint-owners) and;

• Your share of the property.

Examples illustrating the amounts that can be pledged:

The amount you can use is based on the cash in excess of the required Minimum Sum cash component.

Examples illustrating the amounts that can used for the next property (Computation is based on Book Value ie. the original or principal amounts of cash and property pledge without accrued interest)

EXAMPLE 1

In example 1 above, the member can use $53,000 (i.e.$106,000 less required Minimum Sum cash component of $53,000) to pay for the next property.

EXAMPLE 2

In example 2 above, the member can use $33,000 (i.e.$86,000 less required Minimum Sum cash component of $53,000) to pay for the next property.

EXAMPLE 3

In example 3 above, the member cannot use any amount to pay for the next property as there is no excess cash above the required Minimum Sum cash component of $53,000.

Singapore citizens and Permanent Residents can top up their own, siblings', spouses’, parents’ or grandparents’ CPF Minimum Sums using their CPF savings or cash. The recipient of the top-up should be at least 55 years old. Please see the table below:

Yes, the limit that a recipient can receive is the difference between the prevailing Minimum Sum and his net balances in his Ordinary, Special and Retirement Accounts, including CPF withdrawn for investments.

The prevailing Minimum Sum is $106,000.

Example

Yes, the limit that a recipient can receive is the difference between the prevailing Minimum Sum and his net balances in his Ordinary, Special Accounts, including CPF withdrawn for investments. This is known as the topping-up limit. The prevailing Minimum Sum is $106,000.

Example on CPF top-up: