Written Answer to PQ on CPF Investment Scheme-Ordinary Account

NOTICE PAPER NO. 2541 FOR THE SITTING ON OR AFTER 7 FEBRUARY
QUESTION NO. 5443 FOR WRITTEN ANSWER

MP: Mr Chua Kheng Wee Louis

To ask the Minister for Manpower what is the rationale for sale proceeds from investments made under the CPF Investment Scheme-Ordinary Account to remain in the Investment Account and not automatically credited into the OA, while sale proceeds under the CPFIS-Special Account are automatically credited into the SA.

Answer:

1. Under the CPF Investment Scheme, CPF investments and proceeds from using Ordinary Account (OA) savings and Special Account (SA) savings are segregated. CPF members can invest their OA savings in a wider range of investment products when compared to investment using SA savings which are safeguarded for members’ retirement.

2. Accordingly, CPF members can only invest in shares and corporate bonds using OA savings. These products typically have a short settlement period. Hence, agent banks are appointed by CPF Board to maintain members’ CPF Investment Account to facilitate members’ investment transactions using their OA savings and reduce the processing time required for reinvestments.

3. Nonetheless, members who have no intention to reinvest their OA savings may instruct the agent bank to refund their sale proceeds from their CPF Investment Account into their OA. The agent banks will also automatically transfer the cash balances held in the CPF Investment Account back to the OA if the Investment Account has been inactive for two consecutive months.