Central Provident Fund - CPF

DEFINITION of 'Central Provident Fund - CPF'

A mandatory benefit account set up to provide Singaporeans with a healthy retirement plan. The Central Provident Fund (CPF) was first introduced in 1948 by the Progressive Party to help ensure that Singaporeans would save up for retirement. Many people disagreed with the idea but it was believed that making this fund compulsory would give security and assurance to retirees.

BREAKING DOWN 'Central Provident Fund - CPF'

Rates of contribution vary depending on the employee's age. For example, members that are 35 years old or younger must contribute approximately 33% of total wages to the fund. This breaks down to the employees contributing 20% of their wages and their employers contribute the remaining 13%.

The purpose of the fund was to ensure that those entering retirement had the healthcare and support that they needed. The funds are then managed and invested to obtain an adequate return.

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RELATED FAQS
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    Read about the types of investments allowed in various provident funds around the world, including the Indian, Malaysian ... Read Answer >>
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    Find out how provident funds are funded, including the basics of how this retirement savings program works and examples of ... Read Answer >>
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    Learn about some of the primary differences between the benefits of provident funds and pension funds, two types of retirement ... Read Answer >>
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    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
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