Written Answer to PQ on CPF LIFE Interest Rate and Assumptions

NOTICE PAPER NO. 2885 OF 2024 FOR THE SITTING ON OR AFTER 3 JULY 2024
QUESTION NO. 6276 FOR ORAL ANSWER

MP: Mr Chua Kheng Wee Louis

To ask the Minister for Manpower (a) whether the Retirement Account funds used to pay for CPF LIFE continue to earn interest for the member after monthly payouts commence; (b) what are the expected assumptions imputed in deriving the CPF LIFE monthly payouts; and (c) whether this differs with (i) varying members’ retirement sums accumulated, such as the Basic Retirement Sum, Full Retirement Sum and Enhanced Retirement Sum and (ii) varying members’ choice of plans, such as the Basic, Standard and Escalating Plans.

Answer:

1.CPF LIFE premium will continue to earn the prevailing CPF interest rates. The interest earned is factored into members’ monthly payouts even after payouts have commenced.

2.CPF LIFE payouts are determined by independent actuarial consultants and are dependent on the actual Retirement Account (RA) savings used to join CPF LIFE instead of the Basic, Full or Enhanced Retirement sums. Payouts are also dependent on other factors such as gender, age, CPF interest rates and mortality rates.

3.The assumptions used in deriving payouts do not differ according to choice of CPF LIFE plans.