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CPF Board to reduce Total Expense Ratio for CPFIS funds to benefit members<table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td valign="top"><p>As part of the CPF Board’s continuous efforts to lower the cost of investing under the CPF Investment Scheme (CPFIS), the Board will be reducing the limits on the Total Expense Ratio (TER) for unit trusts and investment-linked insurance products under the CPFIS.</p><p>TER refers to the ongoing costs of operating a fund, expressed as a percentage of the fund's average net asset value. The costs may include investment management fees, trustee fees, and audit fees.</p><p>The new TER caps are listed in the table below:</p><table border="1" cellspacing="0" cellpadding="1" width="100%"><tbody><tr><td align="center" bgcolor="#ffffff" style="width:50%;padding:5px;"><p align="left"> <span class="blackhighlight">Risk Categories<sup>1</sup> of Funds under CPFIS</span></p></td><td align="center" bgcolor="#ffffff" style="width:25%;padding:5px;"> <strong> <span class="blackhighlight">New TER Caps (%)</span></strong></td><td align="center" bgcolor="#ffffff" style="width:25%;padding:5px;"> <strong>Existing TER Caps (%)</strong></td></tr><tr><td align="center" style="padding:5px;"><p align="left">Higher Risk<br></p></td><td align="center" style="padding:5px;">1.75<br></td><td align="center" style="padding:5px;">1.95</td></tr><tr><td align="center" style="padding:5px;"><p align="left">Medium to High Risk</p></td><td align="center" style="padding:5px;">1.55</td><td align="center" style="padding:5px;">1.75</td></tr><tr><td align="center" style="padding:5px;"><p align="left">Low to Medium Risk</p></td><td align="center" style="padding:5px;">0.95</td><td align="center" style="padding:5px;">1.15</td></tr><tr><td align="center" style="padding:5px;"><p align="left">Lower Risk</p></td><td align="center" style="padding:5px;">0.35</td><td align="center" style="padding:5px;">0.65</td></tr></tbody></table><p> <sup>1</sup> Risk categories are:<br>a. Higher risk - Funds that invest in equities.<br>b. Medium to high risk - Funds that invest in a mixture of equities and bonds.<br>c. Low to medium risk - Funds that invest substantially in fixed income products or bonds.<br>d. Lower risk - Funds that invest in money market products.</p><p>The new TER caps are based on the median TER of CPFIS List A funds in FY2012, and after taking in industry feedback. The new caps will take effect in two phases:</p><ul><li>Phase 1: TER caps are applicable to <strong>new funds</strong> included under CPFIS from <br> <strong>1 October 2014<br><br></strong> </li><li>Phase 2: TER caps are applicable to <strong>existing funds</strong> under CPFIS from <br><strong>1 January 2016</strong></li></ul><p> </p><p>Funds that do not comply with the new TER caps will not be allowed to take in new CPF monies.</p><p>CPF members who have already invested in funds which do not meet the new TER caps, will not be required to redeem their investments. However, if they wish to switch from these funds to other CPFIS funds, they can do so free of charge within a stipulated time.</p><p>Members will be notified of their options by insurers and fund management companies, who will facilitate the switching.</p><p>The Board would like to remind members who wish to invest their CPF savings, to do so prudently and to consider the total costs of investment, their investment objective, risk appetite and investment horizon. Those who leave their CPF savings with the Board currently earn guaranteed interest rates of up to 3.5% and 5% per annum in their Ordinary and Special Accounts respectively.</p><p>A copy of the <a href="/Members/FAQ/schemes/optimising-my-cpf/cpf-investment-schemes">FAQ</a> is attached.</p><p> <span class="blackhighlight"> <strong>Background: Past measures to improve quality of CPFIS funds and lower costs</strong></span></p><p>To help CPFIS investors achieve better returns, various measures have been taken since 2006 to improve the quality of funds under CPFIS, and lower the cost of investing. </p><table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" style="border:1pt solid windowtext;width:100%;"><tbody><tr><td width="25%" style="padding:2.25pt;border:1pt solid windowtext;width:63.8pt;background:#dddddd;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;"> <b> From</b></p></td><td width="75%" style="padding:2.25pt;border:1pt solid windowtext;width:449.5pt;background:#dddddd;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;"> <b>Criterion/Description</b></p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;width:63.8pt;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Feb </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2006</p></td><td style="padding:2.25pt;border:1pt solid windowtext;width:449.5pt;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Tightening of admission criteria. New funds must: <br>(i) meet the revised benchmark set at the top 25 percentile of funds in the global peer group;<br>(ii) have expense ratio that is lower than the median of existing CPFIS funds in its risk category; and<br>(iii) preferably have track record of good performance for at least 3 years.</p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jul 2007</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Sales charge for CPFIS-included funds must not exceed 3%.</p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jan </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2008</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Expense ratios for CPFIS-included funds must not exceed the median of existing CPF funds in its risk category: <br> <br></p><div align="center"><table class="MsoTableGrid" border="1" cellspacing="0" cellpadding="0" style="border:currentcolor;border-collapse:collapse;width:100%;"><tbody><tr><td style="padding:0cm 5.4pt;border:1pt solid black;width:50%;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;"> <b> Risk Categories</b></p></td><td style="border-width:1pt 1pt 1pt medium;border-style:solid solid solid none;border-color:black black black #f0f0f0;padding:0cm 5.4pt;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;"> <b>Expense Ratios Criterion (%)</b></p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Higher risk</p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">1.95</p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Medium to High Risk <br></p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">1.75</p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Low to Medium Risk</p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">1.15<br></p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Lower Risk</p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">0.65</p></td></tr></tbody></table></div></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jan </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2011</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">All existing funds must meet the stricter admission criteria before accepting new CPF monies.</p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jul   </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2012</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Wrap fees for CPFIS investments are capped at 1% per annum</p></td></tr></tbody></table><div align="center"> </div><p> <span class="subtopicheader"> <strong>PUBLIC ENQURIES</strong></span><br>For more information, please visit <a href="http://www.cpf.gov.sg/">www.cpf.gov.sg</a> or call the CPF Call Centre at 1800-227-1188.</p></td></tr></tbody></table> <br>CPF Board to reduce Total Expense Ratio for CPFIS funds to benefit membersTrueFalseTrue

 

 

CPF Board to reduce Total Expense Ratio for CPFIS funds to benefit members<table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td valign="top"><p>As part of the CPF Board’s continuous efforts to lower the cost of investing under the CPF Investment Scheme (CPFIS), the Board will be reducing the limits on the Total Expense Ratio (TER) for unit trusts and investment-linked insurance products under the CPFIS.</p><p>TER refers to the ongoing costs of operating a fund, expressed as a percentage of the fund's average net asset value. The costs may include investment management fees, trustee fees, and audit fees.</p><p>The new TER caps are listed in the table below:</p><table border="1" cellspacing="0" cellpadding="1" width="100%"><tbody><tr><td align="center" bgcolor="#ffffff" style="width:50%;padding:5px;"><p align="left"> <span class="blackhighlight">Risk Categories<sup>1</sup> of Funds under CPFIS</span></p></td><td align="center" bgcolor="#ffffff" style="width:25%;padding:5px;"> <strong> <span class="blackhighlight">New TER Caps (%)</span></strong></td><td align="center" bgcolor="#ffffff" style="width:25%;padding:5px;"> <strong>Existing TER Caps (%)</strong></td></tr><tr><td align="center" style="padding:5px;"><p align="left">Higher Risk<br></p></td><td align="center" style="padding:5px;">1.75<br></td><td align="center" style="padding:5px;">1.95</td></tr><tr><td align="center" style="padding:5px;"><p align="left">Medium to High Risk</p></td><td align="center" style="padding:5px;">1.55</td><td align="center" style="padding:5px;">1.75</td></tr><tr><td align="center" style="padding:5px;"><p align="left">Low to Medium Risk</p></td><td align="center" style="padding:5px;">0.95</td><td align="center" style="padding:5px;">1.15</td></tr><tr><td align="center" style="padding:5px;"><p align="left">Lower Risk</p></td><td align="center" style="padding:5px;">0.35</td><td align="center" style="padding:5px;">0.65</td></tr></tbody></table><p> <sup>1</sup> Risk categories are:<br>a. Higher risk - Funds that invest in equities.<br>b. Medium to high risk - Funds that invest in a mixture of equities and bonds.<br>c. Low to medium risk - Funds that invest substantially in fixed income products or bonds.<br>d. Lower risk - Funds that invest in money market products.</p><p>The new TER caps are based on the median TER of CPFIS List A funds in FY2012, and after taking in industry feedback. The new caps will take effect in two phases:</p><ul><li>Phase 1: TER caps are applicable to <strong>new funds</strong> included under CPFIS from <br> <strong>1 October 2014<br><br></strong> </li><li>Phase 2: TER caps are applicable to <strong>existing funds</strong> under CPFIS from <br><strong>1 January 2016</strong></li></ul><p> </p><p>Funds that do not comply with the new TER caps will not be allowed to take in new CPF monies.</p><p>CPF members who have already invested in funds which do not meet the new TER caps, will not be required to redeem their investments. However, if they wish to switch from these funds to other CPFIS funds, they can do so free of charge within a stipulated time.</p><p>Members will be notified of their options by insurers and fund management companies, who will facilitate the switching.</p><p>The Board would like to remind members who wish to invest their CPF savings, to do so prudently and to consider the total costs of investment, their investment objective, risk appetite and investment horizon. Those who leave their CPF savings with the Board currently earn guaranteed interest rates of up to 3.5% and 5% per annum in their Ordinary and Special Accounts respectively.</p><p>A copy of the <a href="/Members/FAQ/schemes/optimising-my-cpf/cpf-investment-schemes">FAQ</a> is attached.</p><p> <span class="blackhighlight"> <strong>Background: Past measures to improve quality of CPFIS funds and lower costs</strong></span></p><p>To help CPFIS investors achieve better returns, various measures have been taken since 2006 to improve the quality of funds under CPFIS, and lower the cost of investing. </p><table class="MsoNormalTable" border="1" cellspacing="0" cellpadding="0" style="border:1pt solid windowtext;width:100%;"><tbody><tr><td width="25%" style="padding:2.25pt;border:1pt solid windowtext;width:63.8pt;background:#dddddd;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;"> <b> From</b></p></td><td width="75%" style="padding:2.25pt;border:1pt solid windowtext;width:449.5pt;background:#dddddd;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;"> <b>Criterion/Description</b></p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;width:63.8pt;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Feb </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2006</p></td><td style="padding:2.25pt;border:1pt solid windowtext;width:449.5pt;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Tightening of admission criteria. New funds must: <br>(i) meet the revised benchmark set at the top 25 percentile of funds in the global peer group;<br>(ii) have expense ratio that is lower than the median of existing CPFIS funds in its risk category; and<br>(iii) preferably have track record of good performance for at least 3 years.</p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jul 2007</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Sales charge for CPFIS-included funds must not exceed 3%.</p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jan </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2008</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Expense ratios for CPFIS-included funds must not exceed the median of existing CPF funds in its risk category: <br> <br></p><div align="center"><table class="MsoTableGrid" border="1" cellspacing="0" cellpadding="0" style="border:currentcolor;border-collapse:collapse;width:100%;"><tbody><tr><td style="padding:0cm 5.4pt;border:1pt solid black;width:50%;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;"> <b> Risk Categories</b></p></td><td style="border-width:1pt 1pt 1pt medium;border-style:solid solid solid none;border-color:black black black #f0f0f0;padding:0cm 5.4pt;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;"> <b>Expense Ratios Criterion (%)</b></p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Higher risk</p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">1.95</p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Medium to High Risk <br></p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">1.75</p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Low to Medium Risk</p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">1.15<br></p></td></tr><tr><td style="border-width:medium 1pt 1pt;border-style:none solid solid;border-color:#f0f0f0 black black;padding:5px;background-color:transparent;"><p class="MsoNormal" style="margin:0cm 0cm 0pt;">Lower Risk</p></td><td style="border-width:medium 1pt 1pt medium;border-style:none solid solid none;border-color:#f0f0f0 black black #f0f0f0;padding:5px;background-color:transparent;"><p align="center" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:center;">0.65</p></td></tr></tbody></table></div></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jan </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2011</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">All existing funds must meet the stricter admission criteria before accepting new CPF monies.</p></td></tr><tr><td valign="top" style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">1 Jul   </p><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">2012</p></td><td style="padding:2.25pt;border:1pt solid windowtext;background-color:transparent;"><p align="left" class="MsoNormal" style="margin:0cm 0cm 0pt;text-align:left;">Wrap fees for CPFIS investments are capped at 1% per annum</p></td></tr></tbody></table><div align="center"> </div><p> <span class="subtopicheader"> <strong>PUBLIC ENQURIES</strong></span><br>For more information, please visit <a href="http://www.cpf.gov.sg/">www.cpf.gov.sg</a> or call the CPF Call Centre at 1800-227-1188.</p></td></tr></tbody></table> <br>CPF Board to reduce Total Expense Ratio for CPFIS funds to benefit members24/9/2014 4:00:00 PMhttps://null/common/Lists/News/DispForm.aspx?ID=2235Central Provident Fund Board

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