Budget 2026: CPF to roll out life-cycle portfolios for those willing to take some risks for higher returns
The new life-cycle investment scheme will be launched in the first half of 2028
Add BT as a preferred source
Follow The Business Times’ live coverage of Singapore’s Budget 2026 here.
- Investors’ portfolio mix will automatically rebalance along a glide path mechanism as they age
- Portfolios will be liquidated in phases by the target date to mitigate risk of a downturn
- Selected product providers – likely two or three – to be announced in the first half of 2027
[SINGAPORE] The Central Provident Fund (CPF) Board will roll out a new life-cycle investment scheme in the first half of 2028, targeted at members who wish to take some risk to reap higher returns for retirement.
The scheme is in response to recommendations by the CPF Advisory Panel for the Lifetime Retirement Investment Scheme in 2016, which the government studied carefully, Finance Minister Lawrence Wong said in his Budget speech on Thursday (Feb 12). The final name, however, may differ.
“Some CPF members, especially those with a longer runway to retirement, are prepared to take more risk to generate potentially higher returns,” noted Wong, who is also prime minister.
“But experience shows that most people do not do well picking and trading individual stocks. It is very hard to beat the market consistently,” he said.
While a broad and diversified exposure through low-cost funds is a more sensible approach for retail investors, some may also invest when markets are high and retire during a downturn, PM Wong added.
The CPF Board will thus work with commercial providers to offer simplified, low-cost and diversified life-cycle investment products under the new scheme. The products are expected to work on a glide path mechanism to automatically rebalance members’ asset allocation from higher-risk assets such as equities, towards lower-risk assets like bonds as they approach their target retirement age.
The portfolio will be liquidated in phases by the target date, to mitigate the risk of a sharp downturn at the point of exit.
PM Wong noted that while life-cycle investment products are available in the market, they typically have high fees. The government is thus helping to shape and develop such products “rather than leave this entirely to the market”, he said, adding that a key requirement is that the fees are kept low.
SEE ALSO
Upon phased liquidation, the sale proceeds will be transferred to the CPF member’s Retirement Account (RA) up to the Full Retirement Sum. Any remaining proceeds will be transferred to the Ordinary Account.
The funds in the RA can be used to join CPF Life when the member decides to start receiving monthly payouts from age 65.
CPF expects to engage with the industry from March on the product specifications and invite expressions of interest. It will work with independent investment consultants to evaluate product providers’ applications for the scheme.
Selection of product providers is expected to be announced in the first half of 2027. Two to three providers are likely to be selected to simplify choices for members.
Investment in the scheme will be voluntary; members may continue to invest in existing funds included in the CPF Investment Scheme.
The government is prepared to provide “time-limited” support to kickstart the new scheme, PM Wong said. It will also help members better understand and assess if the new scheme is suitable for them, especially younger individuals who can ride out short-term market fluctuations.
More details will be provided at a later date.
For more of BT’s Budget 2026 coverage, go to bt.sg/budget26
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
