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CPF In Singapore By Talha Lodhi
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CPF In Singapore By Talha Lodhi

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CPF In Singapore By Talha Lodhi CPF In Singapore By Talha Lodhi Presentation Transcript

  • COMMON PROVIDENT FUND
  • SEQUENCE
    • INTRODUCTION
    • POLICY
    • SAVING POLICY
    • ORDINARY ACCOUNT
    • MEDISAVE ACCOUNT
    • SPECIAL MODE
  • INTRODUCTION
    • A defined contribution system.
    • A proportion of GDP.
    • A compulsory state-managed saving scheme.
    • A key component of economic management policies.
    • Helps in solving problems of financial sustainability.
    • CPF constitutes of the money pooled in by
      • Employees.
      • Employers.
  • POLICY
    • Applicable on both Public and Private sectors.
    • CPF savings, kept with the Federal Government.
      • Utilization in;
        • Reducing budgetary deficit
        • HDB financing
        • Development Expenditure
    • B alance of CPF for FY 03/04 was 64% amounting to 103.5 Billion Dollars.
      • Against that of '98 as 85.2 billion USD and 52% of GDP.
    • Government decides the proportion to be paid by employers.
    • Cont’d….
    • Income cap for CPF
      • Minimum salary - 500 SD
      • Upper Ceiling – 4500 SD.
    • Proportion of Saving being pooled in;
      • Employee pools in 10% of the pay.
      • Employer 10-20% of the pay.
        • Almost 25% of the pay as a saving each month.
    • Employer proportion varies with the economic situation.
      • In times of recession the share may reduce to as low as 10%.
      • Gradually increased after recession eventually topping up at 20%.
    • High saving rate too results in watering down of buying power.
      • Reason for Employer proportion of CPF having been reduced from 25% to 10% during ‘86 recession.
  • SAVING POLICY
    • CPF comprises of three basic accounts;
      • Ordinary mode
      • Medi-save mode
      • Special mode
    • All three accounts are contributed upon, in parallel.
      • Contribution division managed by the Government.
  • ORDINARY ACCOUNT
    • Savings can be withdrawn before retirement.
    • Interest rate of 2.5% on savings.
    • Utilization for
      • Payment of housing towards HDB.
      • Covering general insurance premiums.
      • Footing children’s school education.
  • MEDISAVE ACCOUNT
      • For healthcare activities alone.
      • Saving @ 4% interest rate.
      • Capped at 25,000 SD in ’03.
      • Utilization for;
        • Hospitalization
        • Approved medical insurance services.
  • SPECIAL MODE
      • Retirement saving
      • Investment in retirement related financial products.
      • @ 4% interest earning.