The CPF story

Singapore's social policies embody the national philosophy of active government support for citizen self-reliance. This reinforces the values that keep Singapore strong, which are individual effort and responsibility for the family.

Feeling secure in old age revolves around three key needs: retirement, housing, and healthcare. As a compulsory savings scheme, CPF is designed to help Singaporeans support and take care of themselves in retirement, with the government providing targeted assistance to the needy through subsidies and top-ups.

CPF was established on 1 July 1955, to help workers save for retirement by contributing part of their monthly income.

In 1968, the government introduced the Public Housing Scheme, allowing Singaporeans to use their CPF savings instead of take-home pay to finance mortgages on their HDB flats. By making housing more affordable, many Singaporeans were able to own homes. This has become a key pillar of retirement security, as Singaporeans in their senior years no longer have to pay rental fees out of their retirement savings.

By the 1970s, Singapore was a modern and prosperous nation, with rising wages and living standards. CPF contribution rates were increased to help members save more for retirement. The Special Account (SA) was also introduced to provide for more targeted accumulation of retirement savings.

Under the Approved Investment Scheme in 1986, members were allowed to invest their Ordinary Account (OA) savings to generate returns above the prevailing interest rate. Over time, this evolved into today’s CPF Investment Scheme (CPFIS), which gives members the opportunity to earn potentially higher returns. To guard against members taking excessive risks, limits were set on the amount they could invest, and which financial instruments they could invest in.

In 1984, the MediSave Account (MA) was established to help CPF members save for their own and their family’s hospitalisation expenses.

MediShield’s introduction in 1990 provided a medical insurance scheme, to help members meet the expense of long-term and/or serious illnesses.

In CPF’s early days, members were able to fully withdraw their savings upon retirement. But rising life expectancy increased the risk of members outliving their CPF savings.

To address this, the Minimum Sum Scheme was introduced in 1987. This helps members spread out their savings over retirement, by providing monthly payouts.

In 2001, the Economic Review Committee examined CPF’s economic implications. Based on the Committee's recommendations, the government decided that the minimum sum should gradually be increased over a 10-year period, so that lower-middle income households would have enough to cover their basic retirement expenses.

With life expectancy continuing to rise, the government introduced the CPF LIFE annuity scheme in 2009. This provides payouts for life, and ensures that members will not outlive their CPF savings.

Recognising that low-wage workers needed more help, the government introduced Workfare Income Supplement in 2007. This encourages older low-wage workers to stay employed, by boosting their wages and retirement savings.

In 2008, to help those with lower CPF balances grow their savings faster, the government started paying an extra 1% interest on the first $60,000 of CPF savings. 

In 2014, the Pioneer Generation Package was launched to lighten the burden of healthcare costs for Singaporeans aged 65 years and above. This includes enhanced subsidies for outpatient treatment, additional annual MediSave top-ups and help with premiums for the new national insurance scheme, MediShield Life.

As the nation's social security system, CPF's fundamental mission is to help all members achieve a secure retirement. CPF is supplemented by home ownership, which provides an important source of savings that members can draw on if needed, through schemes such as the Silver Housing Bonus and Lease Buyback.

CPF continues to evolve and identify areas for improvement in order to benefit the lives of its diverse membership, today and in the future.