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As announced in Parliament in 2012 and widely publicised in the media, CPF LIFE is mandatory for members born from 1958. It provides members with a regular stream of income for as long as they live so they do not risk outliving their savings.


Like those in Mr Phua’s cohort who turned 55 in 2015, Mr Phua was sent two letters inviting him to select his CPF LIFE plan. A third letter to inform him that he had been issued the CPF LIFE Standard Plan was also sent as he did not choose a plan within the given six-month period. In addition, he would have been informed through the Yearly Statement of Account sent every January that he had been issued the CPF LIFE Standard Plan.


CPF LIFE is an annuity, not a bank account. Interest earned on CPF LIFE annuity premium is pooled. The pooled interest enables members to continue receiving monthly payouts should they still be alive when their annuity premium has been exhausted. Equally, members who pass away earlier will lose their pooled interest. This is how insurance risk-pooling works.


All CPF LIFE policies are issued on an actuarially fair basis regardless of the age that members join. Joining CPF LIFE at age 55 provides about 10% higher payouts compared to joining at age 65. This is because the member benefits from the higher interest pooled. We have written to Mr Phua to address his concerns.


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(CPF Facebook post)

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