Manpower Minister responds to concerns over CPF Special Account closure
Manpower Minister Tan See Leng addressed concerns in Parliament regarding the closure of the Central Provident Fund (CPF) Special Account (SA) for members aged 55 and above, emphasizing that grandfathering the scheme would create a generational divide.
Tan See Leng was responding to West Coast MP Foo Mee Har, who suggested keeping the CPF Special Account for those already over 55 while applying the closure only to younger members. The CPF Special Account will be closed in 2025, with savings being transferred to the Retirement Account (RA) up to the Full Retirement Sum, and any excess transferred to the Ordinary Account (OA).
Tan argued that this change would prevent any inequity, as it would disproportionately benefit the older generation at the expense of younger members. He pointed out that only 8,400 higher-income individuals, less than 1% of the members aged 55 and above, would be affected by the closure. These individuals will be allowed to transfer their savings to their family members’ RAs or grow them outside the CPF system.
Tan also acknowledged that some 720,000 members with withdrawable SA balances might face a loss of liquidity. However, he clarified that the loss would be minimal — less than S$3 per month for most, or about S$30 per year. Members could retain their balances in the OA for liquidity at a lower interest rate or invest through CPF schemes to increase their retirement payouts.
He emphasized that the CPF system’s primary goal is to ensure that Singaporeans have sufficient retirement savings while supporting their housing and healthcare needs.
