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CPF (Amendment) Bill 2024

1. The CPF system is a key pillar of Singapore’s social security system which supports members in setting aside savings for retirement, housing and healthcare needs. These three key needs remain fundamental even as the CPF system continues to evolve to meet the changing needs of its members. 

2. The CPF (Amendment) Bill 2024 comprises two parts:

(A) First, the Bill proposes to legislate the closure of the Special Account (SA) for members aged 55 and above, and the expansion of the Home Protection Scheme (HPS). These moves are part of the evolution of the CPF system to continue serving the needs of Singaporeans over the course of their lives.

(B) Second, it also proposes amendments to clarify processes and streamline the administration of CPF schemes. 

(A)We will evolve the CPF system to continue serving the needs of Singaporeans over the course of their lives.

Closure of SA for members aged 55 and above

• As announced at Budget 2024, the SA for members aged 55 and above will be closed. This will take effect from the second half of January 2025 onwards, and members will be notified when their SA is closed, through a hard copy notification as well as an email or SMS where applicable.

• This move is to ‘right-site’ CPF monies. Only CPF savings committed towards long-term retirement needs should earn the higher long-term interest rate. CPF savings that are withdrawable will earn the short-term interest rate.

• Members who intend to top up their Retirement Account for higher payouts are encouraged to do so early to earn more through compounding interest.

• Please refer to the CPF website at https://www.cpf.gov.sg/member/infohub/educational-resources/closure-of-special-account-for-members-aged-55-and-above-in-early-2025 for more details. 

Expansion of HPS

• The HPS is an insurance scheme that protects CPF members and their loved ones from losing their Housing & Development Board (HDB) flats in the event of the member’s death, terminal illness, or total permanent disability.

• Today, members are covered at a standard premium rate if they are assessed to be generally in good health, even if they have pre-existing health conditions.

• While we cannot cover all pre-existing health conditions, we will expand the HPS from mid-2025 to cover those with certain pre-existing conditions that are not so severe. This will allow more members to benefit from this scheme.

• With the expansion, examples of pre-existing health conditions that may now be considered for coverage include certain types of stroke and heart disorder.

• Members who become eligible for HPS due to the expansion will pay higher premiums that are commensurate with their higher likelihood of claims. This is aligned with industry practice. Even with the premium loading (i.e. additional premium charged), the HPS would provide coverage at one of the lowest premiums in the current market for such members. We will give such members who would be subject to premium loading the option to opt in to the scheme.

• For members who are eligible for coverage today, there will be no change to the standard premium rate.

• To ensure the HPS remains sustainable and affordable for the majority of members, the small minority of members with more severe health conditions, such as those currently receiving treatment for cancer, would not be able to participate in the HPS. This is also in line with industry practice. 

 (B)We will clarify processes and streamline the administration of CPF schemes. The administrative amendments in the CPF (Amendment) Bill 2024 propose to:

Simplify the CPF Board structure to comprise a Chairperson, six tripartite representatives, and eight other persons

• The amendments simplify the CPF Board structure to give the Minister the discretion to appoint a Deputy Chairperson from among the Board members. This is in line with common practices across other statutory boards. 

• There will be no change to the maximum number of 15 Board members. The Board currently comprises a Chairperson, a Deputy Chairperson, six tripartite representatives and seven other persons.

• After the amendments, the Board will comprise a Chairperson, six tripartite representatives, and eight other persons. Excluding the Chairperson and CEO of CPF Board, the Minister may now appoint a Deputy Chairperson from any of the remaining Board members with the President’s concurrence.

Prioritise the recovery of the subsidy recovery amount for additional HDB subsidies ahead of CPF housing refunds, upon disposal of flats priced with additional subsidies

• To ensure affordability, starting from the October 2024 Build-To-Order (BTO) launch exercise, Prime and Plus flats offered under the New Flat Classification Framework 3 come with additional subsidies, on top of significant market discounts applied to all BTO flats today. 

• To maintain parity with other BTO flat owners who did not receive these additional subsidies, Plus and Prime flat owners who buy their flats from HDB will have to return to HDB a percentage of the resale price or the valuation of the flat (whichever is higher) upon the disposal of their flats.

• The subsidy recovery rate is commensurate with the extent of additional subsidies provided. The recovery of additional subsidies will be done before the required CPF housing refund is made to the member’s CPF account. 

Clarify requirement for CPF housing refunds upon disposal of property that had undergone a Retained Ownership Transaction or had new co-owners added

• These amendments provide legal clarity that CPF members are only required to refund the CPF monies they had used to purchase a property, when the member disposes of that property.

• There are instances where new leases or titles are issued for a property, without changes in ownership. For example, lease extension or purchase of recess areas. At the point of such transactions, CPFB does not require a refund of CPF monies used for the purchase of the property, even though the existing lease or title is surrendered. This helps members avoid financial hardship and inconvenience as there are no sale proceeds from such transactions. Instead, the refund is only required when the member subsequently disposes of the property.

• For transactions where new co-owners were added to a property after the existing owner had pledged the property, new co-owners are obliged to fulfil the refund of pledged monies to the existing owner’s CPF accounts upon disposal of the property. 

Repeal provisions allowing CPFB to share prospective employees’ employment history with employers upon request

• In the past, employers could request for CPFB to share prospective employees’ employment history under the CPF Job Record Scheme.

• This provision is no longer in use as the scheme was terminated in 1983 and CPFB has not shared any prospective employees’ employment history with employers since then.