In a significant move, the Singapore Parliament passed a bill on Monday, November 6th, to bring about changes to the Central Provident Fund (CPF) system in Singapore, according to Channel NewsAsia.
The amendments, which will come into effect from April next year, target approximately 300,000 foreigners with CPF accounts and aim to simplify the process for nominees to access CPF information of deceased members.
Key changes
The amendments to the CPF Act introduce several pivotal changes to the CPF system, with a focus on improving transparency, accessibility, and resource allocation.
- Access to Deceased Members’ Information
One of the most notable changes is the allowance for information related to a deceased member’s CPF account to be disclosed starting from February 1st next year. This information includes the deceased member’s CPF balances, the names of nominees, and the proportion of money to be received. Currently, such information can only be accessed if authorized by the member or through a court order.
The new process is expected to streamline and simplify the handling of deceased members’ CPF accounts, reducing the administrative burden on families during difficult times. Senior Minister of State for Manpower, Koh Poh Koon, highlighted that the CPF Board received over 3,000 requests to access deceased members’ information this year. The amendments will offer a more convenient and efficient way to address these requests by allowing electronic issuance of documents.
- Closing Foreigners’ CPF Accounts
Another significant change involves the closure of CPF accounts belonging to foreigners. This move is aimed at reallocating resources to better support the long-term needs of Singaporean residents. The change will limit the CPF system to Singaporean citizens and Permanent Residents (PRs).
While this measure was welcomed by Members of Parliament (MPs), it raised concerns about the potential impact on businesses and employers. Mr. Saktiandi Supaat asked whether the cessation of foreign CPF participation would lead to businesses turning away from Singaporean workers due to the absence of additional CPF contributions for foreign workers.
- Who Can Retain CPF Accounts During the Transition Period?
Mr. Yip Hon Weng raised a crucial question about individuals in the process of applying for Singaporean citizenship and PR status. He inquired whether they would be allowed to retain their CPF accounts during this period. Dr. Koh noted that accounts of those who have not been granted PR status by April 1st next year will be closed. However, once they obtain permanent residency, they will become part of the CPF system. - Access to CPF Information
MPs also sought clarity on who would be eligible to receive the CPF information of deceased members and what specific details would be disclosed. Dr. Koh clarified that nominees and beneficiaries under relevant intestacy laws would be granted access. Intestacy laws outline the distribution of a person’s estate when they pass away without a will.
It’s essential to note that not all family relations are considered next-of-kin under the relevant intestacy laws, and they will not be allowed access to the deceased member’s CPF information. Additionally, for the majority of members who have made nominations, the amendments align with their intentions, as they have already authorized all their nominees to access their CPF information upon their demise.
CPF’s statement
CPF (Amendment) Bill Highlights 2023
We have made changes to the CPF (Amendment) Bill to legislate the ceasing of non-residents’ participation in CPF schemes and streamline the administration of CPF schemes for better service delivery to residents.
Here is a summary of the changes:
Closure of non-residents’ (non-Singapore Citizens and non-Permanent Residents) CPF accounts
The core purpose of the CPF system is to support the retirement, housing and healthcare needs of residents. In line with this, non-residents’ participation in CPF schemes will cease from 1 April 2024.
Non-residents have to transfer their CPF savings to their bank accounts by 1 April 2024, failing which their CPF accounts will be automatically closed, and any remaining savings will cease to earn the prevailing CPF interest rate. The remaining savings can still be transferred to their bank accounts at any time after that.
This was first announced in March 2023 and CPF Board is now making the necessary legislative amendments to support the automatic closure of CPF accounts. Non-residents may also refer to CPF website at cpf.gov.sg/AccountClosure for more details.
Streamlining the administration of CPF schemes to improve service delivery
To align with industry practices for wills and intestate distribution of assets, the Board will allow nominees and beneficiaries under the relevant intestacy laws to access deceased members’ CPF information, with effect from February 2024. Members no longer need to explicitly authorise the Board to disclose their CPF information to these individuals upon their demise.
This enables nominees and beneficiaries under the relevant intestacy laws to settle post-demise matters relating to the deceased members’ CPF accounts with greater ease and transparency.
Members can be assured that their CPF information remains private and confidential while they are alive. Members may refer to cpf.gov.sg/NOMFAQ for more details.
In addition, with the amendment, the Board may continue with certain transactions, which typically arise or follow from obligations preceding the member’s demise. These include monies due to the member (e.g. refund of CareShield Life premiums to member’s MediSave account after death) or payments due to third parties (e.g. refunds to employers if there were excess CPF contributions made).
Notices and service methods
For greater convenience, members will be able to receive more documents from CPF Board electronically. This includes selected hardcopy notifications such as the Notice of Contributions issued to self-employed persons. Members can still request for hardcopy notifications should they prefer.
To align with the legislation governing other public sector agencies, changes to the Notice to Attend Court document can now be made without having to amend the subsidiary legislation. A sample copy of the “Notice to Attend Court” document will be made available on the Board’s website so that members of public can easily access and verify the legitimacy of any notice served.