In CPF’s early days, members were able to fully withdraw their savings upon retirement. But rising life expectancy increased the risk of members outliving their CPF savings.
To address this, the Minimum Sum Scheme was introduced in 1987. This helps members spread out their savings over retirement, by providing monthly payouts.
In 2001, the Economic Review Committee examined CPF’s economic implications. Based on the Committee's recommendations, the government decided that the minimum sum should gradually be increased over a 10-year period, so that lower-middle income households would have enough to cover their basic retirement expenses.
With life expectancy continuing to rise, the government introduced the CPF LIFE annuity scheme in 2009. This provides payouts for life, and ensures that members will not outlive their CPF savings.