html> Getforme Singapore CHANGES TO CPF MINIMUM SUM AND INVESTMENT SCHEMES FROM 1 JANUARY 2007 FrontPage Edition 1 January 2007

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Changes to CPF Minimum Sum and Investment schemes from 1 Jan 2007



The Board would like to remind CPF members of the following changes to the CPF schemes which will take effect from 1 January 2007.
CPF members who turn 55 and are able to meet the CPF Minimum Sum are required to set aside a Required Amount in their Medisave Account when they make a CPF withdrawal.
If members have less than the Required Amount in their Medisave Accounts, their Ordinary and/or Special Account balances in excess of the Minimum Sum will be used to top up the Required Amount.
The requirement for members to set aside the Required Amount in their Medisave Account is to enable members to have enough savings to meet their healthcare needs during old age.
From 1 January 2007, the Required Amount will be raised from the current $8,300 to $11,500, after adjusting for inflation. The Required Amount will increase by $2,500 (in 2003 dollars) each year until it reaches $25,000 (in 2003 dollars) on 1 January 2013.
The cap on the CPF withdrawal limit for the purchase of private residential properties and HDB flats financed with bank loans will be reduced from the current 132% to 126% of the Valuation Limit, and thereafter, by another 6 percentage points to 120% on 1 January 2008.
This is to encourage prudence in the use of CPF savings for properties so that members will have enough savings in their CPF accounts to meet their retirement needs.
For more details, please log on to or call the CPF Call Centre at 1800 - 227 1188.

Source: News Release 19 Dec 2006

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The Board would like to announce the following changes to the CPF Investment Scheme (CPFIS) which will take effect from 1 January 2007:
CPF members will be allowed to use their Ordinary Account or Special Account savings to invest in Singapore Government Treasury Bills (T-Bills) from 1 January 2007. Those who wish to invest in T-Bills should approach the bond dealers1 included under the CPFIS.
1 The bond dealers included under the CPFIS are DBS, OCBC and UOB.
Fixed Deposits under CPFIS-SA will be distributed to the estate of the deceased instead of the CPF nominee(s) upon the passing of the member from 1 January 2007. This treatment is similar to the other investments under the CPFIS.
CPF Board will include Gold Exchange Traded Funds (ETFs) as a new product under the existing investment category of gold from 1 January 2007.
The Gold ETFs will be subject to the existing investment limit for gold of 10%. Product providers will need to apply to the Board for evaluation for inclusion under CPFIS.
For more details, please log on to or call the CPF Call Centre at 1800 - 227 1188.

Source: News Release 29 Dec 2006

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Lower charges on new CPF investments in funds under CPF Investment Scheme (CPFIS) to benefit members
High sales charges and expense ratios erode investment returns. CPF Board will be implementing the following changes for new investments in funds (unit trusts and investment-linked insurance products) using CPF monies:-
a) Sales Charges From 1 July 07, sales charges must not exceed 3%.
b) Expense Ratios From 1 Jan 08, expense ratios1 must not be higher than that shown in Annex A. The Board will review these ratios from time to time.
Funds that are unable to meet either of the above criteria will not be allowed to take in new CPF monies.
CPF members who have already invested in such funds will not be required to redeem their investments. However, if they wish to switch from these funds to other CPFIS funds, they can do so free of charge within a stipulated timeframe. The insurers and fund management companies will notify members of their options and facilitate the switching.
The Board would like to remind members that charges on their investments are only one of the factors affecting returns. Members must also take into account their investment objective and risk appetite and adopt a long term view when they are making their investments.
For queries, please visit or call CPF Call Centre at 1800-227-1188.
Annex A
Expense Ratios Criterion By Risk Categories
(Based on median expense ratios of funds included under CPFIS
as at 31 December 2004)
Risk Categories2 Expense Ratios Criterion (%)
[Rounded off to the nearest 0.05]
Higher risk 1.95
Medium to High Risk 1.75
Low to Medium Risk 1.15
Lower Risk 0.65
Annex B
Background Information
In December 2005, CPF Board announced that it would tighten the admission criteria for funds seeking to be included under CPFIS. From 1 Feb 2006, new funds must meet the following criteria for inclusion under CPFIS:
a. Top 25 percentile in their global peer group
b. Expense ratio lower than median of existing CPFIS funds in its risk category.
c. Preferably have a track record of at least 3 years.
CPF Board will publish on its website two lists of funds - List A and List B - to keep members informed of existing funds which have and have not met the new admission criteria respectively. CPF Board encourages existing funds admitted before 1 Feb 2006 to qualify for List A by applying to be evaluated under the new criteria.
Funds that meet the new funds admission criteria following evaluation after 1 Feb 2006 (List A funds) are as follows:
Unit Trusts
1. Aberdeen Asian Smaller Companies Fund
2. DWS Asian Small/ Mid Cap Fund
3. Lion Capital Singapore Fixed Income Investment
Investment-Linked Insurance Products
1. GE GreatLink Global Technology Fund
1The expense ratio will be based on the funds audited expenses for its latest financial year.
Risk categories are:
a. Higher risk - Funds that invest in equities.
b. Medium to high risk C Funds that invest in a mixture of equities and bonds.
c. Low to medium risk C Funds that invest in fixed income products or bonds.
d. Lower risk C Funds that invest in money market products.

Source: News Release 28 Dec 2006

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