COS 2021: Enhancing CPF Returns

Mr Chua Kheng Wee Louis (Sengkang): Chairman, CPF has been able to maintain its interest rates at 2.5% for Ordinary Accounts and 4% for Special MediSave and Retirement Accounts. The interest helps our CPF members to grow closer to their time and goals, which is to meet or exceed the minimum retirement sum. Now, even though 2.5% or 4% compounded over a long period of time can lead to significant interest income. I would like to ask if there can be a choice for CPF members, especially with a long-term time horizon.

For example, the 20- to 30-year-olds today with 30 or 40 more active working years to devote a portion of their CPF to earn higher returns. For example, MINDEF already has a Saver Premium Fund where investors have an option to choose between dynamic balance and stable according to the investment needs. Is there a possibility for CPF members to have similar options where they can opt a portion of their CPF savings for a dynamic portfolio, such as to co-invest with the Government’s investment vehicles to enjoy the higher returns.

Up to 50% of the net returns from the reserve do flow back through the NIRC framework. Could there be a more direct means by which members will be able to earn high investment returns through co-investing in the Government’s investment vehicles, especially given the long time horizon for CPF monies held for our members’ retirement.

There is already a CPF Investment Scheme in place with a list of specified investment products included under the CPFIS. Should we look further when you really have the highest quality fund managers in the Government’s investment vehicles and does it not make sense to allow Singaporeans to directly benefit from the Government’s prudent and astute investment capabilities?

Ministry of Manpower
2 March 2021

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