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Financial advisory

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CM-SIPSpecified Investment Products: Derivatives & Collective Investment Schemes M8Collective Investment Schemes M8ACollective Investment Schemes II CM-EIPExcluded Investment Products: Securities, Collective Investment Schemes & Foreign Exchange

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RES 1ASecurities Exchange Dealers RES 1BSecurities Dealers of Non-Exchange Members RES 2BDerivatives Dealers of Non-Exchange Members RES 2ADerivatives Exchange Dealers RES 12BSecurities & Derivatives Dealers of Non-Exchange Members

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M5 — RES5 — Rules, Ethics & Skills for Financial Advisory Services

CPF & CPFIS

The Central Provident Fund (CPF) started on 1 July 1955 as a national old-age savings plan and is administered by the CPF Board, a statutory board under the Ministry of Manpower. It has since grown into a comprehensive social-security system covering three needs — retirement, healthcare and housing. CPF contributions are compulsory for Singapore Citizens (SC) and Permanent Residents (PR) working in Singapore who earn more than S$50 a month; foreigners are exempt. For employees earning above S$750/month, total employer + employee contributions currently range from 12.5% to 37% of wages depending on age (37% for those aged 55 and below). Self-employed persons must contribute to MediSave (4%–10.5% of net trade income) if their yearly net trade income exceeds S$6,000.

7 sections~6 min read

Checked against the CPF Board, Matched Retirement Savings Scheme page; Budget 2024 MRSS enhancements effective 1 Jan 2025, as at 2026-09-13. Unofficial prep, not endorsed by MAS or SCI.

Must-know for the exam

CPF began 1 July 1955; administered by the CPF Board (statutory board under the Ministry of Manpower); now covers retirement, healthcare and housing. Contributions apply to SC/PR earning >S$50/month; foreigners are exempt.
Contribution rates (from 1 Jan 2024, wages >S$750): total 37% at age 55 and below, tapering through 31% / 22% / 16.5% to 12.5% above age 70 (employer + employee combined). Self-employed contribute to MediSave (4%–10.5%) if net trade income >S$6,000.
Contributions go into three accounts — Ordinary (OA), Special (SA), MediSave (MA); a fourth, the Retirement Account (RA), is created at 55. SA introduced 1977, MA 1984, RA 1987. CPF savings are invested in Special Singapore Government Securities.
Interest floors: OA min 2.5% p.a. (3-mth average of major local banks' rates); SA/MA min 4% p.a. (12-mth avg 10-yr SGS + 1%); RA earns the weighted average of its underlying investments.
Extra interest: below 55 → +1% on first S$60,000 combined (OA portion capped S$20,000); 55 and above → +2% on first S$30,000 and +1% on next S$30,000 (OA capped S$20,000). Total CPF interest can reach up to ~6% p.a.
From early-2025 the SA is closed for members aged 55 and above — those savings move to the RA (up to FRS, long-term rate) or the OA (short-term rate).
CPFIS eligibility: at least 18, not an undischarged bankrupt, and >S$20,000 in OA (CPFIS-OA) and/or >S$40,000 in SA (CPFIS-SA); new investors must complete the Self-Awareness Questionnaire (SAQ) since 1 Oct 2018.
CPFIS instruments listed in RES5: shares, property funds, corporate/government/statutory-board bonds, unit trusts, Treasury bills, bank deposits, endowment policies, ILPs, ETFs and gold — whole-life insurance is NOT listed.
RES5 gives one common CPFIS instrument set and does not, in this chapter, spell out OA-vs-SA product differences or specific sub-limits (e.g. caps on shares or gold) — verify current CPFIS product rules and limits with the CPF Board.
Retirement sums (turning 55 in 2024): BRS S$102,900, FRS S$205,800 (= 2 × BRS), ERS S$308,700. BRS rises 3.5% per cohort (2023–2027); from 2025 the ERS is raised from 3× to 4× BRS.
At 55 the RA is formed by transferring SA savings first, then OA savings, up to the cohort FRS. Members turning 65 from 2024 with RA below FRS get a further SA/OA transfer up to FRS when payouts start.
CPF LIFE: lifelong annuity; Payout Eligibility Age 65, payouts start anytime up to 70 (auto-start by 70). Auto-included if SC/PR born 1958+ with at least S$60,000 in RA at payout start.
Three CPF LIFE plans — Escalating (+2%/yr), Standard (level, the default) and Basic (legacy, payouts decline as combined balances fall below S$60,000). Deferring payouts raises them by up to 7% per year. Non-CPF-LIFE minimum payout is S$350 (drawn down for up to ~20 years).
Withdrawals (born 1958+): from 55, unconditional up to S$5,000 plus OA/SA above the cohort FRS; from 65, up to 20% of retirement savings (less the S$5,000).
Legacy: CPF nomination covers OA/SA/MA/RA, CPF LIFE premium balance and discounted Singtel shares; nominated payouts made ~17 working days. No nomination → Public Trustee's Office under intestacy laws (up to ~6 months, with a fee). CPF savings are not part of the estate and cannot be willed; nomination is revoked on marriage.
Top-ups & healthcare: RSTU gives up to S$8,000 tax relief (own) + S$8,000 (loved ones); MRSS matches cash top-ups (up to S$600/yr until 2024; from 1 Jan 2025 up to S$2,000/yr, S$20,000 lifetime). Healthcare stack: MediShield Life → Integrated Shield Plans; CareShield Life / ElderShield; MediFund. MediSave is capped by the Basic Healthcare Sum (BHS = S$71,500 for the 2024 cohort, fixed at 65).

What the CPF is

CPF contributions are compulsory for Singapore Citizens (SC) and Permanent Residents (PR) working in Singapore who earn more than S$50 a month; foreigners are exempt. Both employer and employee contribute a percentage of wages by law. For employees earning above S$750/month, total contributions currently range from 12.5% to 37% of wages depending on age:

•55 and below — 37% (17% employer + 20% employee)
•Above 55 to 60 — 31%; Above 60 to 65 — 22%
•Above 65 to 70 — 16.5%; Above 70 — 12.5%

Self-employed SCs/PRs must contribute to MediSave (4%–10.5% of net trade income, by age and income) if their yearly net trade income exceeds S$6,000. All members — including non-working and self-employed — may top up their own or family members' SA/RA and/or MA.

The four CPF accounts

Monthly contributions are allocated across three accounts (OA, SA, MA); a fourth (RA) is created at 55:

•Ordinary Account (OA) — receives the bulk of contributions (the share falls with age); used to buy residential property, pay certain insurance premiums, invest under CPFIS, and fund education. Earns the lower rate (legislated floor 2.5% p.a.).
•Special Account (SA) — introduced 1977, primarily reserved for old age; can be used for selected investments. Earns the higher rate (). From , with those savings moved to the RA (up to FRS) or OA.

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Traps that cost marks

CPF touches finance and health, but it sits under Manpower, not Finance or Health.
PRs contribute like citizens; it is foreigners who are exempt.
The SA is for old age; MediSave is the healthcare account.
65 is the Payout Eligibility Age for CPF LIFE, not the age the RA is created.
Older editions listed four plans; the current text has three.
21 is a common distractor; the CPFIS minimum age is 18.
It is annuity/insurance for longevity, not a deposit or a health scheme.
OA has defined statutory uses; general lifestyle spending like holidays is not one of them.

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Exam-style questions

Chandra turns 55 in 2024, when the Full Retirement Sum (FRS) is S$205,800. At that point he has S$150,000 in his Special Account (SA) and S$120,000 in his Ordinary Account (OA). After his Retirement Account is set up at the FRS, how much remains in his OA?Answer explained →Farid is 40. He has S$40,000 in his Ordinary Account (OA) and S$25,000 in his Special Account (SA), with no MediSave counted. Ignoring base interest, how much EXTRA interest does he earn in a year?Answer explained →A member wants to use MediSave to pay the premiums for his Integrated Shield Plan (IP). Which statement is correct?Answer explained →Irene is 60. She has S$25,000 in her Retirement Account (RA) and S$10,000 in her Ordinary Account (OA), with no other balances. Ignoring base interest, how much EXTRA interest does she earn in a year?Answer explained →Under the MRSS enhancements from 1 January 2025 (annual matching cap raised to S$2,000, lifetime cap S$20,000, age 55 and above), an eligible member's family tops up S$3,000 to his Retirement Account in 2025. What matching grant does the Government add for that year?Answer explained →

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