Singapore Fact-File Part 7:
Business Owner Welfare and Lifestyle

7.2 Singapore Business Domestic Pensions

The structure of pension provision for individuals in business: Domestic Pensions

The Central Provident Fund oversees domestic pension cover.

Contributions amounting (from September 2010) to 35.5% of employee wages (15.5% from the employer, and 20% from the employee) are paid into three accounts, administered by the CPF:

• The Ordinary Account
• The Special Account
• The Medisave Account.

Contributions are tax deductible for both employer and employee.

Contributions accumulated in the Special Account relate mainly to the resident’s retirement needs, and are therefore generally invested in retirement-related financial products.

From the age of 55, CPF savings can be withdrawn, except for a CPF Minimum Sum (initially set at SGD80,000 in 2003 and being raised gradually until it reaches SGD120,000 (in 2003 terms) in 2013) which is held in a designated retirement account; distributions from this (or an annuity, if the taxpayer has chosen to purchase one from a participating provider with their Minimum Sum) begin at the age of 62 (or later, if desired).

A Minimum Sum top-up scheme is also allowed, in order to boost retirement income.

A life annuity will pay out for the lifetime of the person in question, a straightforward monthly distribution will continue until the accumulated savings are exhausted.

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