Deputy Prime Minister Lawrence Wong said at the 2024 Budget that the Central Provident Fund (CPF) Enhanced Retirement Sum ceiling will be raised from 2025.

This is the maximum amount that members can put into the CPF Retirement Account to receive CPF payouts.

The higher ceiling allows more members aged 55 and above to fully commit their accumulated CPF savings to receive higher monthly payouts, so those who wish to save more for retirement can do so.

The Enhanced Retirement Sum is currently three times the Basic Retirement Sum.

For 2024, the Basic Retirement Sum is S$102,900, while the Enhanced Retirement Sum is S$308,700.

From 2025, the Enhanced Retirement Sum will be S$426,000, increased to four times the Basic Retirement Sum.

It was also announced that the CPF contribution rates for those aged 55 to 65 will be raised by a further 1.5 percentage points in 2025.

The government’s CPF Transition Offset for employers will also extended by another year to cover half of the increase in employer contributions for 2025.

CPF Special Account to be closed for those aged 55 and above

The government will also carry out adjustments to rationalise the CPF system, Wong added.

Currently, members aged 55 and above have a Special Account and a Retirement Account.

From 2025, the government will close the Special Account for those aged 55 and above.

The savings in this account will be transferred to the Retirement Account up to the full retirement sum, where members will continue to earn the long-term interest rate.

The remaining Special Account savings will be transferred to the Ordinary Account.

With the Special Account closure, everyone will have three CPF accounts at any one time.

Those below the age of 55 will continue to have the Ordinary Account, Special Account and MediSave Account, while those aged 55 and above will only have the Ordinary Account, Retirement Account and MediSave Account.

As of now, the Special Account and the Retirement Account hold savings intended for retirement payouts, and both earn the same long-term interest rate of 4 per cent a year.

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