Thursday, January 3, 2008

CPF changes from 1st Jan 08

Hey Guys, just to update you on the CPF changes wef 1st Jan

1. Interest Rate Changes
ai) An extra 1% interest will be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA).
aii) The additional interest received on the OA will go into the member’s Special or Retirement Account to enhance his retirement savings.
b) Savings in the Special, Medisave and Retirement Account will be pegged to the 12-month average yield of the 10-year Singapore Government Security(10YSGS) + 1%.
c) Government will maintain the 4% floor rate for two years if the 10YSGS yield plus 1% is below 4%. After two years, the 2.5% floor rate will apply for all CPF accounts.

2. Medisave Required Amount
ai) CPF members who turn 55 and meet the Minimum Sum must set aside a Required Amount in their Medisave Account when they make a withdrawal.
aii) If members have less than the Required Amount in their Medisave Account, their Ordinary and/or Special Account balances in excess of their Minimum Sum will be used to top up the Required Amount.
aiii) The Required Amount will be raised from the current $11,500 to $14,000.

3. CPF Minimum Sum Topping up Scheme
ai) CPF members can top up the Special Accounts of their spouse and/or siblings who are below age 55, using cash and/or CPF.
aii) The topping up limit will be the prevailing Minimum Sum less the recipient’s net balances in his Ordinary and Special accounts

4. CPF Investment Scheme - Lower Expense Ratio
ai) Expense ratios on new investments in funds (unit trusts and investment-linked insurance products) under CPF Investment Scheme must not be higher than the specific allowable limits by CPF Board.
aii) The Board will review these ratios from time to time.

5. Housing Withdrawal Limits
a) To encourage prudence in the use of CPF savings the cap on the CPF withdrawal limit for the purchase of private residential properties and HDB flats financed with bank loans will be reduced from the current 126% to 120% of the Valuation Limit.

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