We have made changes to the CPF Act to legislate the closure of the Special Account (SA) for CPF members aged 55 and above, and the expansion of the Home Protection Scheme (HPS) to offer cover to more CPF members.
Here are more details on the changes:
Closure of Special Account (SA) for CPF members aged 55 and above
From the second half of January 2025 onwards, the SA of CPF members aged 55 and above will be closed. Members will be notified through a hard copy notification as well as an email or SMS where applicable after their SA is closed.
As mentioned in Budget 2024 and the 2024 Committee of Supply debate for the Ministry of Manpower, the principle behind this change is to right-site CPF monies, so that only CPF savings committed towards long-term retirement needs earn the higher long-term interest rate.
With the closure of the SA, members’ SA savings will be transferred to the Retirement Account (RA) up to their Full Retirement Sum, where they will continue to earn the long-term interest rate. Any remaining SA savings will be transferred to the Ordinary Account (OA) and can be withdrawn on demand.
Members have the option to transfer these OA savings to their RA up to the prevailing Enhanced Retirement Sum (ERS) to continue earning the higher long-term interest rate. With the ERS raised to four times the Basic Retirement Sum from 1 January 2025, more than 99% of CPF members aged 55 and above today would be able to transfer all their SA savings to their RA, if they wish to do so. Doing so will boost their monthly retirement payouts. Members who intend to top up their RA for higher payouts are encouraged to do so early to earn more through compounding interest.
Read more on the closure of SA and how you can optimise your CPF savings to receive higher payouts.
Expansion of Home Protection Scheme (HPS)
The HPS is an insurance scheme that protects CPF members and their loved ones from losing their Housing & Development Board (HDB) flat in the event of the member’s death, terminal illness, or total permanent disability.
Currently, the HPS already covers members with pre-existing health conditions if they are assessed to be generally in good health.
While HPS cannot cover all pre-existing health conditions, the scheme will be expanded from mid-2025 to cover members with certain pre-existing health conditions that are not so severe, such as certain types of stroke and heart disorder. In line with industry practices, these members will pay premiums that are commensurate with their higher likelihood of claims. Even with the premium loading (i.e additional premium charged), the HPS would provide coverage at one of the lowest premiums that such members would pay in the current market. Participation by such members will be on an opt-in basis.
For members who are eligible for HPS coverage today, there will be no change to the standard premium rate.
To ensure HPS remains sustainable and affordable for the majority, members with more severe health conditions, such as those currently undergoing treatment for cancer, would not be able to participate in the HPS. This is also in line with industry practice.
Read more on the expansion of the HPS.