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LIFE@55 - What CPFB Don't Tell You!

CPFB started to talk about Risk Pooling only in April 2019 after being queried at Parliament. They have never talked about Risk Pooling since CPF Life was introduced, not even in any Life@55 Talks! Do you know are there other important information CPFB is still not telling you at Life@55 or @facebook?

In the past (eg 2014), members have to decide/choose their CPF Life Plan (ie Standard vs Basic) at 55 and part-CPF Life annuity premiums would be deducted from their Retirement Account (RA) for transfer to the CPF Life Pool. Only at 65 when monthly payout starts will the reminder of the CPF Life annuity premiums be transferred from RA to CPF Life Pool. For members turning 55 after July 2015, they only need to choose their CPF Life Plan (ie Standard, Basic or Escalating Plan) if they decide to start payout at 65 or delay till 70.

Most members will choose their CPF Life Plan based on guidelines provided by CPFB as follows:

  1. Choose Standard Plan if you want more monies for yourself, ie get higher monthly payouts and lower bequest. Usually applies to those who are single or with no dependents.
  2. Choose Basic Plan if you want to leave more monies for your loved ones, ie get lower monthly payouts and higher bequest.
  3. Choose Escalating Plan if you care for your future, ie start with lower monthy payouts and get 2% increase every year.

Do you know you should not just choose the Plan base on CPFB guidelines above?

Do you know why there are differences in monthly payouts and bequest amounts among the 3 plans?

Do you know what CPFB is not telling you which could affect your choice of the Plan?

Do you know there is no financial blog, financial website or journalist articles, which talk about the 3 CPF Life Plan choices, ever explain this piece of important information to you?

I explained the major differences between the Standard and Basic CPF Life plan back in October 2015, clearly highlighting this important factor. You can read it here:



I am going to highlight the major differences between the Standard and Basic CPF Life plan with the table below (taken from October 2015 article above). Hardwarezone is the only forum where there was active discussion on these since I highlighted it there. No where else in the internet can you find it being discussed. And CPFB also do not publish it in their facebook or the LIFE@55 talk. You have to read through the CPFB website line by line to find it!

So do you know what CPFB is not telling you now?

  1. Risk pooling: they only talk about the interest on the CPF Life Premium you paid into the CPF Life Pool. What is the Premium? 100% of RA for Standard and Escalating Plan, 10-20% of RA for Basic, at the time you choose to start monthly payout. Because Basic Plan members only pay 10-20% of RA as premium, they only contribute interest on this amount into the Pool, resulting in slightly lower mthly payouts but higher bequests.
  2. Risk pooling: what CPFB did not tell you? With Standard and Escalating Plan, you are also paying the 2% extra interest on combined CPF balances into the CPF Life Pool, resulting in sightly higher mthly payout but lower bequest. If you decide to topup your RA later, will the interest in RA also go into the pool? (All these does not affect members who choose Basic Plan).

(Escalating Plan was introduced last year. It is no different from the Standard Plan, except CPFB lowered the initial monthly payout so it appears you will be getting 2% more every year (delayed payment)).




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