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Exemption from CPF Retirement Sum Scheme

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Old 02-12-2019, 02:13 AM   #1
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Exemption from CPF Retirement Sum Scheme

From CPF webpage, "Can i be exempted from setting aside a retirement sum?"



https://www.cpf.gov.sg/Members/Schem...ent-sum-scheme
You may apply for an exemption from setting aside a retirement sum if you:*

*****have your own life annuity bought using cash. The monthly payout you receive from the life annuity should be equal to or above the payout benchmark applicable to you based on when you are born; or
*****are a pensioner receiving a monthly pension equal to or above the payout benchmark applicable to you based on when you are born.

To apply for an exemption, you can submit a copy of the annuity policy or a recent letter issued by the Pension Office of the Accountant-Generalís Department, certifying the monthly pension amount. You may wish to visit the Pensionerís Portal for more information.


Anyone know which life annuity plan (bought using cash) satisfy CPF requirement for private annuity???
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Old 02-12-2019, 02:31 AM   #2
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Currently none.......
Or maybe the gurus here can shed some light.......lol
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Old 02-12-2019, 07:14 AM   #3
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From CPF webpage, "Can i be exempted from setting aside a retirement sum?"



https://www.cpf.gov.sg/Members/Schem...ent-sum-scheme
You may apply for an exemption from setting aside a retirement sum if you:*

*****have your own life annuity bought using cash. The monthly payout you receive from the life annuity should be equal to or above the payout benchmark applicable to you based on when you are born; or
*****are a pensioner receiving a monthly pension equal to or above the payout benchmark applicable to you based on when you are born.

To apply for an exemption, you can submit a copy of the annuity policy or a recent letter issued by the Pension Office of the Accountant-Generalís Department, certifying the monthly pension amount. You may wish to visit the Pensionerís Portal for more information.


Anyone know which life annuity plan (bought using cash) satisfy CPF requirement for private annuity???
Currently. 0 that satisfy the criteria. Its easier to give up your citizenship if you are rich enough. And get a PR.
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Old 02-12-2019, 07:25 AM   #4
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any life annuity plan that can pay out more than the CPF, will cost a LOT more than what the CPF currently is.
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Old 02-12-2019, 08:14 AM   #5
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https://www.cpf.gov.sg/members/faq/s...folderid=11656
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Old 02-12-2019, 09:53 AM   #6
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Any/all Singapore dollar life annuities that have a sufficiently large monthly payout and that are sold by reputable life insurers can, in principle, qualify as substitutes for CPF LIFE.

Please note that "life (to age 99)" or "life (to age 100)" are not life annuities. A couple insurers in Singapore try to play games with term annuities and call them "life" annuities, but that doesn't work for these purposes. They must be genuine life annuities.

Also, you are not allowed to opt out of CPF LIFE but keep your funds in your CPF Retirement Account. Opting out means opting out, fully. You must withdraw your funds from your CPF Retirement Account. That means no more 4+% interest on your money if you opt out.

There is no life annuity sold in Singapore that comes anywhere near the value of CPF LIFE, so financially this is a losing proposition. You would never rationally do this, with the possible exception of having an alternative life annuity "fall into your lap" -- a traditional pension that you earned as part of employment, for example. But even then you'd probably not opt out of CPF LIFE given that the net effective yield on your Singapore dollars in CPF LIFE is still incredibly excellent.
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Old 02-12-2019, 12:32 PM   #7
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There were some deep discussions on this topic some mths ago in another CPF related thread, with "Q&A" with CPFB, thanks to kelhot2001, u can read it here

https://forums.hardwarezone.com.sg/1...2-post393.html

If there is any annuity which can be used get exemption from CPF Life, I would likely be the first to jump in but not to get exemption from CPF Life.

If u read the CPF Life papers, u will know none of the pte insurers "dare to compete" with CPFB. U might find pte annuity which can supplement/complement but not totally replace CPF Life. ie U might be able to get partial exemption but what is the point/benefit, what is your objective?

If the insurer cannot outlive u, u have to pay back to CPF with interest.

Just some points to note.
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Old 02-12-2019, 12:33 PM   #8
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Currently. 0 that satisfy the criteria. Its easier to give up your citizenship if you are rich enough. And get a PR.
Are u sure u can still get PR
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Old 02-12-2019, 01:21 PM   #9
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Are u sure u can still get PR
Just highlighting. If its difficult to get PR, isnt it worse to get an annuity which can replace cpf life.
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Old 02-12-2019, 01:44 PM   #10
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Currently. 0 that satisfy the criteria. Its easier to give up your citizenship if you are rich enough. And get a PR.
Just highlighting. If its difficult to get PR, isnt it worse to get an annuity which can replace cpf life.
If u give up citizenship, is it possible to get PR? U cannot return with CPF anymore?

U cannot get an pte annuity to totally replace CPF Life as of now, but if u can find one to get partial exemption, is possible. U are still a Singaporean. Even if u can find one to replace CPF Life, u still can return with CPF Life.

U cannot compare the 2 alternatives, objective is different, route is different.
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Old 02-12-2019, 05:17 PM   #11
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Its easier to give up your citizenship if you are rich enough. And get a PR.
Are u sure u can still get PR
Just highlighting. If its difficult to get PR, isnt it worse to get an annuity which can replace cpf life.
If u give up citizenship, is it possible to get PR? U cannot return with CPF anymore?
I don't understand where you two are going with this. A former Singaporean citizen (or PR) who (miraculously -- this is very rare) acquires or re-acquires Singapore Permanent Residence is required to repay withdrawn CPF funds, including all accrued interest. There's no opt-out maneuver available here. Moreover, the costs for PRs to live/retire in Singapore are considerably higher than they are for citizens. And what's the other citizenship that this hypothetical PR has? It's very unlikely to be as attractive, and presumably it won't be free. Adult Singaporean citizens only (legally) possess one citizenship: Singaporean.(*)

(*) Footnote: OK, there are a couple weird, exotic exceptions that presumably the Singaporean government quietly, reluctantly tolerates. For example, a citizen of Mexico who was born in Mexico has no way to terminate his/her Mexican citizenship. There is simply no such mechanism under Mexican law; it's a legal impossibility. Such an individual can operate solely as a Singaporean citizen, and presumably Singapore's government would insist on that. Notable example: this individual must not renew his/her Mexican passport. But de jure such an individual is still legally, inalterably a Mexican citizen. Mexico isn't the only one, but it's the one I happen to have heard about. There are approximately 16 other countries (estimates vary) that make it legally impossible to terminate their citizenships, and most of them are in the Americas.

U cannot get an pte annuity to totally replace CPF Life as of now....
Sure you can. All Singapore dollar genuine life annuities that provide a sufficiently large monthly payout and that are sold/paid by a reputable life insurer in Singapore qualify for these purposes. It just doesn't make financial sense to do this, that's all. (Unless you have such a life annuity "by accident" -- a traditional company pension, for example -- have a serious cash flow problem, and have no lower cost source of funds to tap than your CPF Retirement Account. This particular combination of factors is quite rare.)

Even if u can find one to replace CPF Life, u still can return with CPF Life.
Yes, you can "re-enter" CPF LIFE but only strictly before your 80th birthday and only if you're a citizen or PR at the time you re-enter. Moreover, you won't have the benefit of attractive interest on your CPF Retirement Account. To be crystal clear, opting out of CPF LIFE means opting out of your CPF Retirement Account, too. It's an all-or-nothing deal -- you cannot "cherry pick." Opting out and withdrawing your funds from your CPF Retirement Account are part of the same, single opt out process.
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Old 02-12-2019, 06:24 PM   #12
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I don't understand where you two are going with this. A former Singaporean citizen (or PR) who (miraculously -- this is very rare) acquires or re-acquires Singapore Permanent Residence is required to repay withdrawn CPF funds, including all accrued interest. There's no opt-out maneuver available here. Moreover, the costs for PRs to live/retire in Singapore are considerably higher than they are for citizens. And what's the other citizenship that this hypothetical PR has? It's very unlikely to be as attractive, and presumably it won't be free. Adult Singaporean citizens only (legally) possess one citizenship: Singaporean.(*)

(*) Footnote: OK, there are a couple weird, exotic exceptions that presumably the Singaporean government quietly, reluctantly tolerates. For example, a citizen of Mexico who was born in Mexico has no way to terminate his/her Mexican citizenship. There is simply no such mechanism under Mexican law; it's a legal impossibility. Such an individual can operate solely as a Singaporean citizen, and presumably Singapore's government would insist on that. Notable example: this individual must not renew his/her Mexican passport. But de jure such an individual is still legally, inalterably a Mexican citizen. Mexico isn't the only one, but it's the one I happen to have heard about. There are approximately 16 other countries (estimates vary) that make it legally impossible to terminate their citizenships, and most of them are in the Americas.
If u dun understand, obviously u got bad comprehension/interpretation skills!

If u give up citizenship and still think u want to get PR, u must be crazy to get back CPF Life again

Sure you can. All Singapore dollar genuine life annuities that provide a sufficiently large monthly payout and that are sold/paid by a reputable life insurer in Singapore qualify for these purposes. It just doesn't make financial sense to do this, that's all. (Unless you have such a life annuity "by accident" -- a traditional company pension, for example -- have a serious cash flow problem, and have no lower cost source of funds to tap than your CPF Retirement Account. This particular combination of factors is quite rare.)
Which life annuities can replace, pls support with facts! If u cannot, it is as good as none! Again your bad comprehension/interpretation skills fail u! Dun just talk theory!

Yes, you can "re-enter" CPF LIFE but only strictly before your 80th birthday and only if you're a citizen or PR at the time you re-enter. Moreover, you won't have the benefit of attractive interest on your CPF Retirement Account. To be crystal clear, opting out of CPF LIFE means opting out of your CPF Retirement Account, too. It's an all-or-nothing deal -- you cannot "cherry pick." Opting out and withdrawing your funds from your CPF Retirement Account are part of the same, single opt out process.
U dun understand what I am talking, again bad comprehension/interpretation skills! There is no age restriction for u to return to CPF Life if your pte annuity fail for whatever reasons. It is mandatory!

(fyi, I write with multiple implications and meanings, if u cannot read (comprehend/interprete) what I write, u fail. If after so long, u still dun understand my style of writing, u fail)

Last edited by maple96; 02-12-2019 at 06:31 PM..
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Old 02-12-2019, 07:17 PM   #13
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Moreover, the costs for PRs to live/retire in Singapore are considerably higher than they are for citizens.
Since u feel it is more expensive for u, a PR to live/retire in Singapore, so u are likely to defer choosing your ERS-CPF LIfe Escalating Plan to 70, give up PR at 69.5 and return to your own country or somewhere else cheaper?
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Old 02-12-2019, 07:17 PM   #14
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If u give up citizenship and still think u want to get PR, u must be crazy to get back CPF Life again
I don't follow. Singapore PRs have exactly the same longevity insurance-related obligations that citizens have. However, they don't get the financial help many citizens get to meet those obligations.

Which life annuities can replace, pls support with facts!
Refer to CPF Form RSS/8. The CPF Board accepts either life pensions or life annuities as viable substitutes, in principle. It's up to the CPF Board to decide whether a particular payer is sufficiently reputable and reliable, but if it's SDIC covered that'd certainly be fine.

The CPF Board also publishes additional details here. In particular, the CPFB requires that the life insurer add a particular endorsement to the policy.

There is no age restriction for u to return to CPF Life if your pte annuity fail for whatever reasons. It is mandatory!
That's not clear, actually. In particular, Singapore life insurers are all covered under SDIC, including their life annuities. They don't "fail" as such for individual policyholders, because the government itself is insuring them, up to SDIC coverage limits.

In the event a life insurer fails, the SDIC arranges either assumption of the life annuity (and other) policies by another carrier, or the SDIC pays out the residual, subject to the coverage limit. In the latter case, it's likely that the SDIC would be obliged to honor the CPFB's policy endorsement language.

The endorsement language does NOT specify that the individual is placed onto CPF LIFE. It only specifies that the residual must be paid into the individual's CPF Retirement Account. A CPF Retirement Account and CPF LIFE are not quite the same thing. To my knowledge there's no published information about what the CPFB will do with respect to CPF LIFE participation in such an event (age 80 or over, life annuity failure or cessation, SDIC or other residual payout back into the Retirement Account). However, in my view it's likely that the CPF Board will stick to its published policy and will forbid an individual age 80 or older from joining CPF LIFE at least when the cessation of the life annuity is voluntary. The CPFB is unlikely to tolerate longevity risk game playing, which is too serious a risk in such circumstances.
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Old 03-12-2019, 12:28 AM   #15
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Looks like a foreign pension might qualify for said exemption. Maybe this could be an option for SC/SPR who either had lengthy stint abroad or becomes eligible through marriage to a foreign spouse. Even if one did, one would have to weigh the pros/cons of keeping CPF LIFE vs. cashing it out. This would also depend whether planning to retire in Singapore or abroad, since the tax treatment of CPF LIFE in the eventual country of residence may also be a factor.
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