THE Special Accounts (SA) of some 1.4 million Central Provident Fund (CPF) members aged 55 and above were closed on Sunday (Jan 19), said the CPF Board in a news release.
The closure of the SA was first announced by Finance Minister Lawrence Wong in his Budget 2024 speech in Parliament last February.
With the closure of the SA, savings there have been transferred to the Retirement Account (RA), up to members’ cohort Full Retirement Sum (FRS), where they will continue to earn the long-term interest rate from January onwards.
Savings in the Special, MediSave and Retirement Accounts earn the floor rate of 4 per cent per annum from Jan 1 to Mar 31, 2025.
The remaining SA savings have been transferred to the Ordinary Account (OA) where they will earn 2.5 per cent interest per annum, with members having the flexibility to withdraw them when needed.
Those who want to continue earning the higher interest rate of 4 per cent per annum and enjoy higher retirement payouts have the option of transferring these OA savings to their RA – up to the current year’s Enhanced Retirement Sum (ERS).
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This transfer is irreversible and can be made anytime. However, the CPF Board said that if members who wish to earn the higher interest from January onwards, the transfer must be processed by January 2025.
The CPF Board said in its release that the normal processing time for CPF transfers is five working days upon receipt of application, and this could be longer if the volume of applications is high.
The ERS was raised on Jan 1 from three times to four times the Basic Retirement Sum to give those aged 55 and above the option to voluntarily top up more to their RA to receive higher monthly payouts in their retirement years.
The ERS in 2025 is S$426,000 for all members aged 55 and older. Those turning 55 years old in 2025 can receive CPF Life monthly payouts of up to S$3,300 for life from age 65, if they choose to top up to the ERS of S$426,000 in 2025.
From Monday, CPF members will be notified of the closure of their SA through a hardcopy letter, as well as an e-mail or SMS where applicable. They can also view the amounts transferred to their RA and/or OA in their online transaction history by logging in to their CPF account or using the CPF mobile application.
For those currently holding investments under the CPF Investment Scheme-Special Account, the CPF Board said they can continue to hold these investments until they decide to sell them or until they mature.
Upon maturity or sale of these investments, the proceeds will go to the RA up to the member’s cohort’s FRS. Any remaining proceeds will go to the OA.
