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Oral Answer by Mrs Josephine Teo, Minister for Manpower, to PQ on unclaimed CPF monies

Employment practices

NOTICE PAPER NO. 1882 OF 2019 FOR THE SITTING ON 4 NOVEMBER
QUESTION NO. 3248 FOR ORAL ANSWER

MP: MR SEAH KIAN PENG

To ask the Minister for Manpower what can be done to reduce the amount of unclaimed CPF monies going forward.

NOTICE PAPER NO. 1885 OF 2019 FOR THE SITTING ON 4 NOVEMBER
QUESTION NO. 3257 FOR ORAL ANSWER

MP: MS FOO MEE HAR

To ask the Minister for Manpower whether CPF Board will consider changing the CPF nomination process to facilitate more seamless distribution of deceased CPF members' funds to their loved ones and rightful owners promptly.

NOTICE PAPER NO. 1885 OF 2019 FOR THE SITTING ON 4 NOVEMBER
QUESTION NO. 3258 FOR ORAL ANSWER

MP: MR CHONG KEE HIONG

To ask the Minister for Manpower regarding unclaimed CPF monies (a) what are the profiles of these members by age, ethnic group, marital status and education level; (b) what measures does the Ministry have to increase the awareness of nominations such as that of contacting and engaging those above a certain age who have yet to make nominations; and (c) whether the Ministry will consider allowing higher withdrawal amounts for those who have no kin to nominate.

Answer 

  1. Mr Speaker, may I take Questions 3 to 5 together please?
  2. I thank the MPs who have raised important questions. There are several key issues I hope to address in this reply.
  3. The first question is whether most CPF monies go unclaimed? 
  4. The answer is no.
  5. In fact, about 98% of all unused CPF monies belonging to deceased members were distributed by CPF Board or the Public Trustee’s Office (PTO) over the last five years. Around 2% are unclaimed.
  6. The vast majority of deceased members had made nominations as to who they wish to receive their unused CPF monies. Their monies were distributed to beneficiaries according to these nominations. This is typically done within a month of CPF Board being notified of the member’s passing by the Immigration and Checkpoints Authority and where the nominees’ bank details have been submitted. 
  7. Members below the age of 45 who pass away are much less likely to have made a nomination. But even if a member did not nominate anyone to receive his unused CPF monies, it may still be distributed to his next-of-kin according to the intestacy and Muslim inheritance laws.
  8. How does it happen? CPF Board will pass the monies to the PTO typically within 3 weeks of notification of the member’s passing. The PTO will then trace and search for the next-of-kin. The Ministry of Law will be answering a separate question on the efforts taken to return the un-nominated CPF monies to members’ next-of-kin. 
  9. The second question is whether unclaimed CPF monies are then forfeited? The answer is again no. As MinLaw will explain in greater detail, next-of-kin can approach PTO at any time to submit their claims. There is no time limit for them to do so.
  10. The third question is whether CPF Board makes an effort to reduce incidence of unclaimed monies.
  11. The answer is yes, absolutely.
  12. The CPF Board adopts a three-pronged approach.
  • Educating members;
  • Reminding members regularly; and
  • Making it easy for members to nominate. 
  1. Firstly, education. The CPF Board raises awareness on the importance of making a CPF nomination through annual island-wide CPF roadshows. It also works with other industry stakeholders, such as lawyers and insurance agents, to advise their clients on making a CPF nomination. 
  2. Secondly, to remind members regularly, the Yearly Statement of Account given to all CPF members highlights in text whether or not the member has made a nomination. If one has been made, the CPF Board also lets the member know when the nomination was made. 
  3. Members may be aware that CPF Board runs a CPF Retirement Planning Service for members before they reach age 55 and a second time before they reach age 65. At these planning sessions, if a member has not already made a nomination, the CPF Board officer will remind the member. 
  4. Thirdly, as Ms Foo Mee Har alluded to, the CPF Board strives to make it easy for members to nominate. At the CPF Retirement Planning Service, if a member decides to make a nomination, it can be done on the spot. Today, a nomination can be made in-person at any of the CPF Service Centres, or via post. The CPF Board is also exploring providing a new electronic nomination system in the first quarter of next year. In 2018, CPF Board processed about 120,000 nomination applications, more than double the 50,000 nominations made in 2013. 
  5. To Mr Chong’s question, what if a member has no next-of-kin? For members on the Retirement Sum Scheme, the payouts are computed taking into consideration life expectancy, which is unrelated to whether a person has next-of-kin. Therefore, they may wish to choose the CPF LIFE Standard Plan which generally offers higher payouts for life. After all, they have no next-of-kin to fall back on if they outlive their savings. At the same time, we focus on helping every member get their nominations done well in advance.