Older members' CPF Special Accounts to close from second half of January

The closure of the CPF Special Account (SA) for members aged 55 and above will take place from the second half of January 2025 onwards, after changes to the CPF Act were passed in Parliament on Oct 14.

- Chor Khieng Yuit

The closure, which was debated extensively earlier in 2024 after it was announced in Budget 2024, will result in members' SA savings being transferred to their Retirement Account (RA), up to the Full Retirement Sum (FRS) for their cohort. The remainder will be transferred to their Ordinary Account (OA).

Outlining the change during the debate on the CPF (Amendment) Bill on Oct 14, Manpower Minister Tan See Leng said CPF members will be notified when their SA is closed through a hard copy notification, as well as an e-mail or SMS where applicable.

He added that the principle behind closing the SA is to right-site CPF monies so that only CPF savings committed towards long-term retirement needs should earn the higher long-term interest rate, which is 4.14 per cent from Oct 1 to Dec 31, 2024, and at least 4 per cent from Jan 1 to Dec 31, 2025.

Members who have met the FRS will still be able to earn the higher long-term interest rate by voluntarily transferring their OA savings to the RA, he noted. It was previously announced that they can transfer up to the prevailing Enhanced Retirement Sum, which will be raised from three times to four times the Basic Retirement Sum from Jan 1, 2025.

Dr Tan said CPF members who want to retain the flexibility to withdraw their savings can also choose to leave the money in their OA and earn the lower OA interest rate of 2.5 per cent.