The Central Provident Fund (CPF) Board will launch a new voluntary investment scheme in 2028 following recommendations by the CPF Advisory Panel.
“The new scheme will complement the existing CPF Investment Scheme (CPFIS) that provides an option for members to invest in a wide range of instruments,” according to a joint statement by the Ministry of Manpower and CFPF Board released on Thursday.
The statement added that the scheme will help long-term investors “willing to take some risk for potentially higher returns, but who may have less expertise in navigating the CPFIS offerings or prefer not to actively manage their investments.”
The scheme provides simplified, low-cost and diversified life-cycle investment products managed by selected commercial providers.
These products will automatically rebalance investors’ portfolios toward lower-risk assets as members age, and gradually liquidate before the target retirement age.
The products are offered at more affordable costs given technological advancements.
“Based on market studies, life-cycle investment products show potential to achieve good returns over a long-term horizon, with increasing adoption of such products internationally in recent years,” the statement said.
It also noted that market players have built the capability and expertise to offer life-cycle investment products at competitive costs with oversight from the Government to safeguards investors’ interests.
Key features include automatic age-based rebalancing that allows liquidation of the investments in phases before 65 years of age which is the Payout Eligibility Age (PEA).
Proceeds will be transferred to the Retirement Account (RA), up to the Full Retirement Sum (FRS), with excess proceeds transferred to the Ordinary Account (OA).
Other key features include simplified choices of two to three providers, and capped fees.
Industry engagement begins in 2026, providers will be selected in the half year of 2027, and the scheme will be launched in the first half of 2028.
Existing CPFIS eligibility criteria will apply for the new scheme.
While returns are subject to market risks, the Government will provide limited initial support and help members understand the scheme.
“Members are encouraged to understand the options available as well as consider their risk appetite and investment horizon before deciding to invest their CPF savings,” the statement added.
