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SINGAPORE: CPF Life is an annuity scheme that kicks in when you turn 55, and pays out a monthly income for the rest of your life with money drawn from your CPF Retirement Account.
Since September, 11,787 eligible members have signed up after the government allowed those who are 55 and older to sign up voluntarily.
There are four plans available, from which a person can choose how much he/she wants to receive each month, and if he/she plans to leave something for his/her family after death.
There is a trade-off between these options because the higher the monthly payout, the less a person leaves for his/her beneficiaries.
The most popular plan so far is CPF Plus, which gives the most to members and the least to their beneficiaries. About half who signed up for CPF Life went for CPF Plus.
Another one-third chose the Life Balanced Plan, which gives a moderate payout to both parties.
The Life Balanced Plan is the default plan for those who do not specify a choice.
The other two plans are - Life Basic, which leaves the most to beneficiaries; and Life Income, which gives the highest payout to members, with no bequests for beneficiaries.
Actual payouts depend on the amount in each member's CPF account.
CPF Life will be compulsory for all who turn 55 from 2013.
However, those who are already 55 may sign up now to receive payouts from January next year.
Those with at least S$40,000 in their Retirement Account will be automatically enrolled. Those who have less than S$40,000 may still join, but they are advised to top up their accounts to receive higher payouts.
The past month saw 571 members top up a total of S$12.5 million into their accounts.
Top-ups may be done by members and their family, as well as by employers.
The government is offering tax breaks for employers to top up their workers' accounts.
The CPF Board estimates about 700,000 are eligible for the scheme now, and it is in the process of sending mailers to individuals to get them to join.
- CNA/yb
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