cp f life booklet

7/31/2019 Cp f Life Booklet

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Understanding

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CPF LIFE Plan

CPF LIFE - Monthly Payout for LIFE


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INTRODUCTION

Making savings last for a lifetime was first brought up by Prime Minister Lee

Hsien Loong in his National Day Rally Speech in 2007. This marks thebeginning of CPF LIFE.

With rising life expectancy, 1 in 5 Singaporeans is expected to be aged 65and above by 2030. Out of which half can expect to live beyond 85.Therefore, an income for life to help you meet your basic retirement needsis very important.

The current Minimum Sum Scheme (MSS) provides CPF members with a

monthly income during retirement. However, it only lasts for about 20years. On the other hand, CPF LIFE ensures that you receive a monthly

1.1 What is CPF LIFE?

The CPF Lifelong Income Scheme For The Elderly (CPF LIFE) is ascheme that will provide you with a monthly payout starting from your

Draw Down Age (DDA), for as long as you live.

1.2 Why should I join CPF LIFE?

CPF LIFE will give you a monthly payout starting from your DDA, forlife. It improves upon the current MSS where payouts only last about20 years.

payout for as long as you live.


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2.1.2interest?

Yes. Interest earned on the RA savings will continue to be paidinto the RA. Interest earned on the annuity premium will be paidinto the Lifelong Income Fund and pooled with the interestearned from the annuity premiums paid by the rest of the CPFLIFE participants to provide the life long payout under thescheme.

In addition, you will earn the extra 1% interest on the first$60,000 of your combined CPF balances7 (including the annuity

premium less annuity payouts) that had been deducted fromyour RA. This extra interest will be paid into your RA8.

2.1.3 Can I change my plan after I join?

No, As a CPF LIFE participant, changing your plan will affectother members who are already in the scheme.

7 With up to $20,000 from your Ordinary Account.

8

Except where it is earned from the Medisave balances, in which case it will be credited to the MedisaveAccount.

Do my savings used for CPF LIFE continue to earn


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The existing CPF rules allow you to pledge your property and

withdraw part of your RA savings. If you chose the LIFEBalanced Plan or LIFE Basic Plan, you may have sufficient RAsavings to make a property pledge and withdraw part of yourRA savings. The monthly payout will be affected if you choose topledge your property9.

If you are on the LIFE Plus Plan or LIFE Income Plan, yourentire RA savings will be used for the annuity premium. Thus,you will not be able to withdraw any RA savings, even if you

make a property pledge.

9

Your RA savings may not be sufficient to provide you with monthly payouts until the annuity payout start age.This is because your RA savings will be consequently reduced when you make a property pledge. The

monthly payout from your annuity, which starts from the annuity payout start age, will not be affected.

2.1.4 Can I still pledge my property?


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If you receive additional monies in your RA after your DDA (e.g.from top-ups or property refund), they will be paid as part ofyour RA monthly payouts. This could result in a differencebetween your RA monthly payouts and that from your annuity.

If you wish to purchase another annuity so that the RA monthlypayouts and the annuity will be about the same, please inform the

Board. You can do so by completing Form LID-App (1A) Application for Additional Annuity under CPF LIFE andreturning it to us. Alternatively, you can apply online via my cpfOnline Services- My Request.


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Assuming that your CPF LIFE Plan is issued in 2012. Please refer to www.cpf.gov.sg for the latestAV/AI criteria for subsequent years.

Benefiting from CPF LIFE

3.1 CPF LIFE BONUS (L-BONUS)

3.1.1 How much L-Bonus can I receive?

You can receive a L-Bonus of between $2,200 and $4,000when you join CPF LIFE with at least $20,000 in your RA. TheL-Bonus is determined based on the Annual AssessableIncome (AI) 13 and the Annual Value (AV) 14 of your homepreceding the year that your CPF LIFE plan is issued.

If you have at least $20,000 in your RA, the amount of L-Bonusyou can receive is shown in the table15 below:

AV ofProperty

AI

$7,000 or less More than $7,000 andup to $13,000

$27,000 or less $4,000 $3,200

More than $27,000and up to $60,000 $3,200 $2,200

If you have less than $20,000 in your RA, you will receive a pro-rated L-bonus upon joining the scheme.

Example: If you join CPF LIFE in 2012 with RA balance of$10,000, AV is $7,000 or less and AI is $27,000 or less, your L-Bonus will be $2,000.

13 Your AI is based on the Year of Assessment (YA) preceding the year that your CPF LIFE plan isissued. (Example: If your CPF LIFE plan is issued in 2012, your AI for YA 2011 will be used, i.e. yourincome for 2010.)

14 The AV used to determine your eligibility for L-bonus is based on the AV of the property stated as yourNRIC address as at 31 December preceding the year that your CPF LIFE plan is issued. (Example: Ifyour CPF LIFE plan is issued in 2012, the 2011 AV of the property stated in your NRIC as of 31December 2011 will be used.)

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3.1.2 How can I receive the full L-Bonus?

To receive the full L-Bonus, you may top up your RA and commit

the amount to CPF LIFE before turning age 56.

If you join CPF LIFE with less than $20,000, the L-Bonus thatyou receive will be pro-rated.

The additional L-Bonus that you receive will be based on theAnnual Value (AV) of your home and Annual Assessable Income(AI) when your CPF LIFE plan was first issued, subject to the fullL-Bonus that you are eligible for determined based on the AV/AI

criteria applicable then.

For more details on L-Bonus, please refer to www.cpf.gov.sg.


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3.2.5 How can I get higher payouts?

If you wish to have a higher payout in your retirement, you may

make cash and/or CPF top-ups into your RA16

and commit theadditional amount to CPF LIFE.

Please refer to www.cpf.gov.sg for more information and how totop up your RA.

3.2.6 When will the monthly payout stop?

The monthly payout from CPF LIFE will be paid for as long asyou live. It ceases at death.

Therefore, the Board may require you to provide satisfactoryproof that you are still alive from time to time. If you do not doso within the time period provided, the monthly payout will bestopped. Payment will resume upon presentation of proof ofyour being alive.


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cp f life booklet

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