CPF In Singapore By Talha Lodhi


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1. COMMON PROVIDENT FUND 2. SEQUENCE <ul><li>INTRODUCTION </li></ul><ul><li>POLICY </li></ul><ul><li>SAVING…
  • 2. SEQUENCE <ul><li>INTRODUCTION </li></ul><ul><li>POLICY </li></ul><ul><li>SAVING POLICY </li></ul><ul><li>ORDINARY ACCOUNT </li></ul><ul><li>MEDISAVE ACCOUNT </li></ul><ul><li>SPECIAL MODE </li></ul>
  • 3. INTRODUCTION <ul><li>A defined contribution system. </li></ul><ul><li>A proportion of GDP. </li></ul><ul><li>A compulsory state-managed saving scheme. </li></ul><ul><li>A key component of economic management policies. </li></ul><ul><li>Helps in solving problems of financial sustainability. </li></ul><ul><li>CPF constitutes of the money pooled in by </li></ul><ul><ul><li>Employees. </li></ul></ul><ul><ul><li>Employers. </li></ul></ul>
  • 4. POLICY <ul><li>Applicable on both Public and Private sectors. </li></ul><ul><li>CPF savings, kept with the Federal Government. </li></ul><ul><ul><li>Utilization in; </li></ul></ul><ul><ul><ul><li>Reducing budgetary deficit </li></ul></ul></ul><ul><ul><ul><li>HDB financing </li></ul></ul></ul><ul><ul><ul><li>Development Expenditure </li></ul></ul></ul><ul><li>B alance of CPF for FY 03/04 was 64% amounting to 103.5 Billion Dollars. </li></ul><ul><ul><li>Against that of '98 as 85.2 billion USD and 52% of GDP. </li></ul></ul><ul><li>Government decides the proportion to be paid by employers. </li></ul><ul><li>Cont’d…. </li></ul>
  • 5. <ul><li>Income cap for CPF </li></ul><ul><ul><li>Minimum salary - 500 SD </li></ul></ul><ul><ul><li>Upper Ceiling – 4500 SD. </li></ul></ul><ul><li>Proportion of Saving being pooled in; </li></ul><ul><ul><li>Employee pools in 10% of the pay. </li></ul></ul><ul><ul><li>Employer 10-20% of the pay. </li></ul></ul><ul><ul><ul><li>Almost 25% of the pay as a saving each month. </li></ul></ul></ul><ul><li>Employer proportion varies with the economic situation. </li></ul><ul><ul><li>In times of recession the share may reduce to as low as 10%. </li></ul></ul><ul><ul><li>Gradually increased after recession eventually topping up at 20%. </li></ul></ul><ul><li>High saving rate too results in watering down of buying power. </li></ul><ul><ul><li>Reason for Employer proportion of CPF having been reduced from 25% to 10% during ‘86 recession. </li></ul></ul>
  • 6. SAVING POLICY <ul><li>CPF comprises of three basic accounts; </li></ul><ul><ul><li>Ordinary mode </li></ul></ul><ul><ul><li>Medi-save mode </li></ul></ul><ul><ul><li>Special mode </li></ul></ul><ul><li>All three accounts are contributed upon, in parallel. </li></ul><ul><ul><li>Contribution division managed by the Government. </li></ul></ul>
  • 7. ORDINARY ACCOUNT <ul><li>Savings can be withdrawn before retirement. </li></ul><ul><li>Interest rate of 2.5% on savings. </li></ul><ul><li>Utilization for </li></ul><ul><ul><li>Payment of housing towards HDB. </li></ul></ul><ul><ul><li>Covering general insurance premiums. </li></ul></ul><ul><ul><li>Footing children’s school education. </li></ul></ul>
  • 8. MEDISAVE ACCOUNT <ul><ul><li>For healthcare activities alone. </li></ul></ul><ul><ul><li>Saving @ 4% interest rate. </li></ul></ul><ul><ul><li>Capped at 25,000 SD in ’03. </li></ul></ul><ul><ul><li>Utilization for; </li></ul></ul><ul><ul><ul><li>Hospitalization </li></ul></ul></ul><ul><ul><ul><li>Approved medical insurance services. </li></ul></ul></ul>
  • 9. SPECIAL MODE <ul><ul><li>Retirement saving </li></ul></ul><ul><ul><li>Investment in retirement related financial products. </li></ul></ul><ul><ul><li>@ 4% interest earning. </li></ul></ul>
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