The Central Provident Fund (CPF) is a social security savings scheme funded by contributions from employers and employees. This mandatory program is an important pillar of Singapore’s social security system and aims to meet the retirement, housing, and healthcare needs of its people.
Individual CPF funds are further subcategorized into three savings accounts: Ordinary Account, Special Account, and Medisave Account.
The Ordinary Account can be used at any time to purchase a home, make investments, and provide for education. The Special Account cannot be utilized until the account holder reaches retirement, unless the money is used to purchase retirement-related financial products. This account will serve as the income a retired person receives.
The Medisave Account is used to pay for medical expenses, hospitalization expenses, and pay for approved medical insurance. Required employer contributions range from 7.5 percent to 16 percent depending on the age and wage of the employee. Required employee contributions range from 5 percent to 20 percent.
When a worker turns 55, savings from their Special and Ordinary accounts are transferred to their Retirement Account when they turn 55, at which point they can start withdrawing their savings. Workers begin to receive monthly payouts of their savings at age 65.
CPF earn risk-free interest on their savings. Interest rates vary for different CPF accounts and age groups and are updated on the CPF government website.
Employers can submit CPF contributions and make payments through the CPF EZPay system, which also automatically calculates the employer’s and employee’s contributions and updates the amount when the employers changes age group. A Singpass login is required for employers to make payments through CPF EZPay.
Singaporean citizens and Singapore permanent residents of three years or above can calculate their CPF contributions by inputting their wages through this online form, while Singapore permanent residents of two years or below can calculate their contributions here.