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CPF LIFE Escalating Plan payouts help address inflation risks in retirement

  • The Straits Times (15 November 2018):
    Index CPF Life payouts to combat inflation

CPF LIFE Escalating Plan payouts help address inflation risks in retirement
- The Straits Times, 24 November 2018

  1. Mr Wayne Yeung suggested to index CPF LIFE payouts to inflation (“Index CPF Life payouts to combat inflation”, 15 Nov).
  2. We share Mr Yeung’s concerns about inflation. In 2016, the CPF Advisory Panel had considered introducing a CPF LIFE plan with payouts fully indexed to inflation. However, the Panel concluded that this would offer less certainty to CPF members on their future payouts, which would fluctuate yearly. The Panel also noted that not all members have expenditure patterns that fully track inflation.
  3. The Panel eventually recommended introducing the CPF LIFE Escalating Plan to address inflation risks over time. This Plan allows CPF members to start their CPF LIFE payouts with a lower initial payout, which then grows at 2% a year. This 2% escalation rate takes into account historical long-term inflation rates, thus preserving long term purchasing power. 
  4. The CPF LIFE Escalating Plan was introduced in January 2018, in addition to existing Standard and Basic plans which provide level payouts. Members who have not selected their CPF LIFE plan may do so prior to the commencement of payouts. Members who have chosen a CPF LIFE plan or started their CPF LIFE payouts, and wish to switch to the Escalating Plan, have a one-year period until 31 December 2018 to do so.
  5. For more information on CPF LIFE plans, CPF members can visit, contact the CPF Board via email at or call 1800-227-1188. 

Shaun Goh
Director (Retirement Systems)
Income Security Policy Division
Ministry of Manpower

Index CPF Life payouts to combat inflation
- The Straits Times, 15 November 2018

  1. The Government today markets CPF Life as a lifelong stream of retirement payouts compared with most private annuities that do so for only a limited period, allowing you to retire in peace for your remaining days.
  2. However, is that really the case?
  3. Inflation is a real problem faced in society today.
  4. Economists see a low inflation increase yearly as a sign of a healthy economy.
  5. The Singapore economy faces a general trend of slightly positive inflation rates year by year.
  6. With this constant inflation, $1 today will be worth more than $1 ten years down the road.
  7. With the prevailing amount of monthly payouts handed out to the elderly, their purchasing power will dramatically worsen over the years.
  8. Indexing is a technique used by many countries where payments are adjusted by means of a price index in order to maintain the purchasing power of the public after inflation.
  9. To curb the problem of reducing the value of the CPF Life payouts, the Government can consider indexing the monthly payouts to the inflation rates experienced by the country's economy.
  10. With this, the elderly will then be able to retire comfortably knowing that they are well provided for in the future.