CPF (Amendment) Bill 2023 Second Reading Speech by Senior Minister of State for Manpower Dr Koh Poh Koon

1. The CPF system is a key pillar of Singapore’s social security system which helps residents with a long-term commitment to Singapore such as Singapore Citizens and Permanent Residents, set aside savings for retirement, housing and healthcare needs. This 3-in-1 feature is unique to our CPF system.

2. We regularly review and update the CPF system. The Bill brings into legal effect the following changes:

a. First, we had earlier announced in March this year that CPF accounts of non-residents will be closed from 1 April 2024. The Bill will give effect to this by ceasing non-residents' participation in CPF schemes.
b. Second, the Bill introduces amendments to clarify and streamline the administration of CPF schemes for better service delivery to residents.

A. Focusing the CPF system on serving residents – ceasing participation of non-residents in CPF schemes

 3. The first set of amendments brings us closer to the CPF system’s core objective of helping residents meet their retirement, housing, and healthcare needs.

4. As non-residents may choose to leave Singapore permanently at any point in time and are not expected to reside in Singapore in the long term, they are responsible for their own retirement and healthcare adequacy or home-ownership needs. We have gradually reduced the participation of non-residents in CPF schemes over the years.

a. Non-residents have not been required to make CPF contributions since 1995.
b. The option to make voluntary contributions was also removed in 2003.
c. However, those who already had CPF accounts have been allowed to leave their past contributions in their accounts.

5. The amendments to completely cease the participation of non-residents in CPF schemes are the final steps that put the CPF system’s core focus on supporting residents.

a. Non-residents should transfer their CPF savings to their bank accounts by 1 April 2024. CPF savings that are not transferred by this date will be transferred to the General Moneys of the Fund and will no longer earn the prevailing CPF interest.
b. As a transitionary measure, in the first three years from 1 April 2024, non-residents’ monies in the General Moneys of the Fund will earn interest based on the 3-month average of the three local banks’ savings account interest rate, which is currently at 0.05% per annum. This is because non-residents can transfer these monies to their bank account at any time.
c. From 1 April 2027, three years after the change kicks in, non-residents’ monies in the General Moneys of the Fund will no longer earn any interest. Non-residents are therefore encouraged to transfer these monies to their own bank accounts as soon as they can.
d. Non-residents’ participation in CPF schemes such as CPF LIFE will also cease from 1 Apr 2024.

6. With these changes, the resources dedicated for the administration of CPF schemes will be better focused on supporting the needs of residents who have a long-term commitment to Singapore.

B. Streamlining the administration of CPF schemes for better service delivery

 7. The second set of amendments clarifies as well as streamlines the administration of CPF schemes so as to improve service delivery.

i. Align disclosure practices upon member’s death to industry practices

 8. Today, under the CPF Act, members need to explicitly authorise CPF Board to allow any person to access their CPF information after their demise. For those who were authorised by the deceased member, they still have to write in to CPF Board to obtain the deceased member’s information. For those who are not authorised by the deceased to access the deceased member’s CPF information, they would have to take the additional step of obtaining a court order to access the information. Such processes complicate the handling of a deceased member’s CPF account and add additional stress to families in bereavement. Just this year alone, CPF Board has already received more than 3,000 requests to access deceased members’ CPF information, often from their family members who are trying to settle the members’ post-death matters.

9. We will amend the CPF Act to make post-demise handling more convenient for the nominees and beneficiaries under the relevant intestacy laws of CPF members who have passed away. The amendment will allow nominees and beneficiaries under the relevant intestacy laws to access CPF information of deceased members, without members needing to explicitly authorise CPF Board to do so before they pass on. The CPF information that will be disclosed includes details such as the deceased members’ CPF balances, names of all the nominees, and the proportion of CPF monies that the nominees will receive. It will also include details of the CPF schemes which the deceased members had participated in.

10. This is aligned to industry practices for wills and intestate distribution of assets by the Public Trustee where generally all beneficiaries are able to obtain information on the portion of the estate or assets each beneficiary will have.

11. Being able to access the deceased members’ CPF information will also provide transparency to the nominees and beneficiaries under the relevant intestacy laws that the deceased members’ CPF monies have been fully accounted for and disbursed accordingly.

ii. Allow transactions to continue after member’s death

12. The amendments also clarify that CPF Board can process CPF transactions on or after a member’s death.

13. Today, under the CPF Act, CPF Board should generally process CPF-related transactions up to the date of death of a member.

14. The amendments will make clear that CPF Board is empowered to process certain transactions on or after the date of death of the member.

a. These transactions typically arise or follow from obligations preceding the death of the member.
b. They include inflows into the CPF accounts such as refund of CareShield Life premiums to the member’s MediSave account after death;
c. And outflows from the CPF accounts such as the refunds to employers if there were excess CPF contributions made.

iii. Notices and service methods

 15. Lastly, we will amend the CPF Act to allow CPF Board to have greater flexibility determining the form of the Notice to Attend Court for greater ease of administration and adopt more convenient and efficient modes of sending documents.

16. Today, the Act requires the CPF Board to prescribe the form of the Notice to Attend Court in subsidiary legislation. With the amendments, CPF Board can make changes to the notice, without having to amend subsidiary legislation. This is aligned with legislation governing other public sector agencies and allows for greater ease of administration when changes to the notice are required. CPF Board will publish a sample copy of the Notice to Attend Court on CPF Board’s website so that the members of the public can easily access and verify the authenticity and legitimacy of any notice served.

17. The amendments will also allow CPF Board to serve certain documents through an electronic service platform instead of in hardcopy, as they are required to do so today.

a. This means greater convenience for CPF members, employers and other persons as they will be able to access more documents from CPF Board electronically.
b. For a start, selected hardcopy notifications such as the Notice of Contributions issued by CPF Board to self-employed persons will be served electronically. Self-employed persons will still have the option to receive a hardcopy notice, by simply going to the CPF website to indicate their preference.

18. This sums up the administrative amendments to the CPF Act.

C. Conclusion

 19. Allow me to conclude.

a. The CPF Amendment Bill will effect the cessation of non-residents’ participation in CPF schemes. This will allow us to focus the CPF system on supporting the needs of residents who have a long-term commitment to Singapore.
b. It also clarifies and streamlines the administration of CPF schemes, such as by aligning with industry practices, to benefit residents and provide them with greater convenience.

20. Mr Speaker, I beg to move.

21. Thank you.