CMFAS M9 Annuities & Other Products question: CPF LIFE monthly payout amounts

CMFAS M9Annuities & Other Products

Which statement about CPF LIFE monthly payout amounts is correct?

A They are fixed at the outset for life, so the CPF Board can never adjust them once payouts start
B Not fixed; reviewed annually and adjustable for mortality experience, interest rates and RA balance
C They are recalculated daily in line with the unit prices of CPF investment funds
D They are reviewed every five years and can only ever be raised, never reduced

Show the answer and explanation

Answer: B. Not fixed; reviewed annually and adjustable for mortality experience, interest rates and RA balance

CPF LIFE payouts are designed to be stable but are not fixed. The amount is reviewed annually, and the CPF Board may adjust it owing to changes in mortality experience, interest rates and transactions in the member's Retirement Account balance, to keep the annuity fund sustainable.

Common mistake

Stable does not mean fixed: payouts are reviewed annually and can be adjusted (up or down), unlike a guaranteed level contract.

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CMFAS M9 Annuities & Other Products question: CPF LIFE monthly payout amounts

Answer: B. Not fixed; reviewed annually and adjustable for mortality experience, interest rates and RA balance

Common mistake

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CMFAS M9 Annuities & Other Products question: CPF LIFE monthly payout amounts

Answer: B. Not fixed; reviewed annually and adjustable for mortality experience, interest rates and RA balance

Common mistake

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