CPF interest earned, retirement payouts hit new highs

Automatic payouts, Retirement Sum Scheme enhancements in 2023 among factors cited

- Chor Khieng Yuit

Central Provident Fund (CPF) members earned a record amount of interest on their CPF balances in 2023, with the figure crossing $20 billion.

Retirement payouts also exceeded $3 billion to hit a new high, with 513,000 CPF members receiving a monthly income.

The CPF Board said in its 2023 annual report that it paid out $21 billion in interest on CPF balances, an increase of 6.1 per cent from $19.8 billion in 2022. This comes as CPF members' balances rose by 4.8 per cent to $571 billion.

Mr Bryan Chan, senior solutions specialist at wealth advisory firm Providend, said the average interest rate works out to 3.68 per cent, derived from expressing the total interest of $21 billion paid in 2023 as a percentage of the total CPF balances of $571 billion for the year.

He added that the average interest rate in 2023 is slightly higher than the 3.63 per cent derived from the 2022 figures. This might be because the interest rates on the Special Account (SA) and MediSave Account balances rose above the floor rate of 4 per cent for the first time in 2023, he noted.

The rates are reviewed every quarter and went up to 4.01 per cent during July to September, before rising another 0.03 percentage point to 4.04 per cent in the October to December quarter.

The year also saw a total of $3.4 billion disbursed to CPF members as retirement payouts, up 21.4 per cent from $2.8 billion in 2022.

This worked out to a simple average of $552 a month for each of the 513,000 CPF members eligible for payouts.