The new investment scheme offers members a simplified investment option if they want to potentially earn higher returns but lack expertise in navigating CPF Investment Scheme offerings or prefer not to actively manage investments.
The new scheme helps members stay invested for the long term and ride out market volatility while calibrating their investment risk exposure at different life stages and mitigating the risk of market downturns during exit.
The key features include:
- Automatic portfolio management where members' investments will rebalance along a glidepath towards less risky assets as they approach target date, shifting gradually from higher-risk to lower-risk assets, before being liquidated in phases. This means members do not need to actively manage their investments or make complex decisions about when to adjust their portfolio.
- Members will have simplified choices with only two to three reputable product providers offering a small number of options, making decision-making much easier.
- All-in fees will also be capped to keep costs low, allowing members to retain and benefit from more of their investment returns.
When members' investments are fully liquidated, the sale proceeds will be transferred to their Retirement Account (RA) up to the Full Retirement Sum, with any remaining proceeds going to their Ordinary Account. These funds in the RA can then help boost members' monthly CPF LIFE payouts.
