Closure of CPF Special Account: What’s next?

NEWS that the Special Account (SA) of the Central Provident Fund (CPF) will be closed from early 2025 for those aged 55 and above has thrown a spanner in the retirement plans of some CPF members, particularly those who have substantial SA savings after turning 55.

They are likely to be “CPF-rich” and would have planned to enjoy the attractive and risk-free interest of 4.08 per cent per annum. They would also have had the flexibility of making withdrawals anytime from their SA, having set aside the Full Retirement Sum (FRS) or the Basic Retirement Sum (BRS) plus property pledged in their Retirement Account (RA).

On the bright side, CPF members can top up their RA up to the Enhanced Retirement Sum (ERS) of four times of BRS from 2025, which translates to S$426,000 next year. ERS is currently three times of BRS. The revised ERS will boost retirement adequacy for all, as they can look forward to higher risk-free monthly payouts for life.