Question about CPF Life

[henrylbh]

So under CPF Plus Plan, the extra CPF interests (2%) does get credited to her RA, ie reflected in the RA column?

So looks like this is a better plan than the current CPF Life Standard?

Your statement (highlighted in blue above) is incorrect.

It is the combined balances in CPF that earns 6% and 5% respectively, not RA alone

Ha ha, you getting me confused.

I guess ..... if all her RA is not pushed to the pool (CPF Plus), then whatever balance in the RA including subsequent top-ups should be earning the extra interest as well as the additional extra interest.

If RA has less than 60k, it will still be credited with interest earned on combined balances.

 

[henrylbh]

I will not attempt to calculate her RA interest rate to find out the exact rate. It is not as easy as you mention, because there are monthly withdrawals, top ups, plus transfer from OA and SA.

The extra interest definitely is added to RA, because the December interest crediting is only for MA and RA.

The MA interest earned is about 4%. Her opening and closing MA is about the same after deducting the earned interest. The contribution to MA is equal to the amount used for medical.

Good that you don't attempt the tedious task to calculate. I am quite certain that RA earns the declared rates even if it is less than 60k as it will still be credited with the interest on the combined balances.

I noted that now then you say got transfer from OA and SA to RA when the impression given was all are withdrawn in Dec annually.

 

[maple96]

Once amount taken out of RA to the pool (CPF Life), I doubt there is any detail movement of CPF Life. So there will be no 5th column for CPF Life.

me not suggesting a 5th column, just asking him/her to check CPF statement for CPF Life Portion which I have seen before. So those who already joined CPF Life will have 5 accounts where CPF Life Account will show balance ( what I saw), now his mum's show bequest amt.

 

[maple96]

Ha ha, you getting me confused.

I guess ..... if all her RA is not pushed to the pool (CPF Plus), then whatever balance in the RA including subsequent top-ups should be earning the extra interest as well as the additional extra interest.

If RA has less than 60k, it will still be credited with interest earned on combined balances.

Good that you don't attempt the tedious task to calculate. I am quite certain that RA earns the declared rates even if it is less than 60k as it will still be created with the interest on the combined balances.

I noted that now then you say got transfer from OA and SA to RA when the impression given was all are withdrawn in Dec annually.

My question is will the extra 2% interest be credited to RA or thrown into the CPF Life Pool?

What makes u so sure/certain that it is credited to RA? U have calculated based on a real life case of CPF Plus Plan or have u got the CPF rules that state it will be credit for CPF Plus Plan?

I found the old booklet on CPF Plus Plan which state it will but with the change in CPF rules, I am not sure. It also state if the extra interest is based on MA then it will be credited to MA.

I prefer to confirm, better be safe, but it does not affect me, only for his family's benefit.

 

[maple96]

I will not attempt to calculate her RA interest rate to find out the exact rate. It is not as easy as you mention, because there are monthly withdrawals, top ups, plus transfer from OA and SA.

The extra interest definitely is added to RA, because the December interest crediting is only for MA and RA.

The MA interest earned is about 4%. Her opening and closing MA is about the same after deducting the earned interest. The contribution to MA is equal to the amount used for medical.

To me, actually it is very easy to do a quick estimate to confirm she gets 900.

1. Take Jan opening balance in RA, multiply by 4% = A
2. If u topup, take the topup amt multiply by 4%, then prorate to the mth of topup, eg if u topup in June, then take 6 mths of interest = B
3. Ignore the rest, will not be material or significant
4. Add A+B+900 = C
5. Compare C to the interest credited in Dec to RA = should be close with difference of a few hundreds maybe. If u dun add 900, see what u get, much lesser. That confirms.

 

[henrylbh]

My question is will the extra 2% interest be credited to RA or thrown into the CPF Life Pool?

What makes u so sure/certain that it is credited to RA? U have calculated based on a real life case of CPF Plus Plan or have u got the CPF rules that state it will be credit for CPF Plus Plan?

I found the old booklet on CPF Plus Plan which state it will but with the change in CPF rules, I am not sure. It also state if the extra interest is based on MA then it will be credited to MA.

I prefer to confirm, better be safe, but it does not affect me, only for his family's benefit.

You under old CPF Life Plan? I quite certain what's earned in RA remains in RA (until new CPF Life Plan is chosen) and what's earned on amount in the pool remains in the pool. The interest on amount in pool is never mentioned anywhere except estimated of 3.75% to 4.25% was mentioned previously.

Extra interest and additional extra interest earned on MA will remain in MA and excess (of BHS) will follow into RA including contributions credited during the year.

I give exact numbers of a statement I have seen in RA -

1 Jan balance in RA 58,372.38
3 Jan transfer MA to RA 484.64 (to restart MA at $48,500)
11 Nov transfer MA to RA $41.66 (excess contributions)
13 Dec interest in RA $3,254.42
31 Dec balance in RA $62,153.10

Enjoy calculating yourself.

 

[maple96]

You under old CPF Life Plan? I quite certain what's earned in RA remains in RA (until new CPF Life Plan is chosen) and what's earned on amount in the pool remains in the pool. The interest on amount in pool is never mentioned anywhere except estimated of 3.75% to 4.25% was mentioned previously.

U r wrong, CPF website clearly state CPF Life premiums earn 4%!


Extra interest and additional extra interest earned on MA will remain in MA and excess (of BHS) will follow into RA including contributions credited during the year.

I give exact numbers of a statement I have seen in RA -

1 Jan balance in RA 58,372.38
3 Jan transfer MA to RA 484.64 (to restart MA at $48,500)
11 Nov transfer MA to RA $41.66 (excess contributions)
13 Dec interest in RA $3,254.42
31 Dec balance in RA $62,153.10

Enjoy calculating yourself.

Hello, his mum already have CPF Life, so dun give us a case where u have not joined CPF Life!

 

[maple96]

You under old CPF Life Plan? I quite certain what's earned in RA remains in RA (until new CPF Life Plan is chosen) and what's earned on amount in the pool remains in the pool. The interest on amount in pool is never mentioned anywhere except estimated of 3.75% to 4.25% was mentioned previously.

Extra interest and additional extra interest earned on MA will remain in MA and excess (of BHS) will follow into RA including contributions credited during the year.

Can u quote the CPF website rule that say this?

.

Can u please answer my question above?

Pls read the following extracted from CPF website:


Q Will my savings used to join CPF LIFE (i.e annuity premiums) continue to earn interest?

A Your savings used to join CPF LIFE (i.e. annuity premiums) will continue to earn interest like your Retirement Account (RA) savings, which is currently at 4% per year. The interest earned on the annuity premiums will be paid to the Lifelong Income Fund and pooled together with the interest of all CPF LIFE participants. The interest will be paid to you as your monthly payouts for as long as you live.



Q Where will the extra interest be paid to after I join CPF LIFE?

A If you have chosen the CPF LIFE Standard Plan or CPF LIFE Escalating Plan, the extra interest will be paid into the Lifelong Income Fund. By paying the extra interest into the Lifelong Income Fund, you will be able to enjoy a more stable payout for the rest of your life. The extra interest will be pooled and factored into your monthly CPF LIFE payouts.

If you have chosen the CPF LIFE Basic Plan, we will pay the extra interest earned into your Retirement Account and pay it to you in the year it is earned as part of your monthly CPF LIFE payout. When your combined balances fall below $60,000, the extra interest will reduce. This reduces your monthly CPF LIFE payouts gradually.

 

[henrylbh]

Hello, his mum already have CPF Life, so dun give us a case where u have not joined CPF Life!

I case i mentioned is just to show that interest earned in RA remains in RA. Whether got CPF Life or not does not change the interest crediting.

Depends on CPF Life Plan.

Where all RA moved to pool eg standard plan, there is no issue of interest or RA. Money in pool earns interest but does not matter, whatever the rate they say. I did qualify that 3.75% to 4.25% was the old version. Now whatever the new rate who cares? Interest belongs to the pool. Only unused annuity premium will be the bequest (together with RA, if any).

Whatever remains in RA eg basic plan, it would continue to earn the declared rates for your to keep as bequest. It should not be pushed to Life Plan.

Tio bo?

 

[maple96]

I case i mentioned is just to show that interest earned in RA remains in RA. Whether got CPF Life or not does not change the interest crediting.

It does change the crediting, depending on CPF Life Plan. Pls write clearly, dun misled Tho u qualified below! It can result on wrong interpretations by u writing it below instead of as a complete sentence above!

We are discussing about a case with CPF Life, so what u provided is irrelevant, dun u understand!


Depends on CPF Life Plan.


Where all RA moved to pool eg standard plan, there is no issue of interest or RA. Money in pool earns interest but does not matter, whatever the rate they say. I did qualify that 3.75% to 4.25% was the old version. Now whatever the new rate who cares? Interest belongs to the pool. Only unused annuity premium will be the bequest (together with RA, if any).

Again, write and qualify properly, dun mislead. If u have standard plan, and still have monies in RA or other CPF a/cs, RA does not earn the extra 2% to be exact, what u earn gets credited to the pool, not your money. So it matters for people to understand. His mum is on CPF Plus which is similar to Standard, so I am concerned whether she gets the extra 2%! .

Whatever remains in RA eg basic plan, it would continue to earn the declared rates for your to keep as bequest. It should not be pushed to Life Plan.


Again write correct statements of fact about CPF Life Basic. Extra interest earned will be credited to RA for CPF Life Basic. "Will be credited", it will not be part of CPF Life Pool!

Tio bo?

Written english bo tio, read my comments in blue above!

 

[henrylbh]

Can u please answer my question above?

Pls read the following extracted from CPF website:

Q Will my savings used to join CPF LIFE (i.e annuity premiums) continue to earn interest?

A Your savings used to join CPF LIFE (i.e. annuity premiums) will continue to earn interest like your Retirement Account (RA) savings, which is currently at 4% per year. The interest earned on the annuity premiums will be paid to the Lifelong Income Fund and pooled together with the interest of all CPF LIFE participants. The interest will be paid to you as your monthly payouts for as long as you live.

I read as 4% is the basic interest rate paid on RA and on annuity premiu (RA money that moved to CPF Life). Interest on RA belongs to you, but not interest on annuity premium.

Q Where will the extra interest be paid to after I join CPF LIFE?

A If you have chosen the CPF LIFE Standard Plan or CPF LIFE Escalating Plan, the extra interest will be paid into the Lifelong Income Fund. By paying the extra interest into the Lifelong Income Fund, you will be able to enjoy a more stable payout for the rest of your life. The extra interest will be pooled and factored into your monthly CPF LIFE payouts.

If you have chosen the CPF LIFE Basic Plan, we will pay the extra interest earned into your Retirement Account and pay it to you in the year it is earned as part of your monthly CPF LIFE payout. When your combined balances fall below $60,000, the extra interest will reduce. This reduces your monthly CPF LIFE payouts gradually.

I see no issue. Interest in RA remains in RA while interest in the pool who cares except it will affect life payouts.

 

[maple96]

I read as 4% is the basic interest rate paid on RA and on annuity premiu (RA money that moved to CPF Life). Interest on RA belongs to you, but not interest on annuity premium.



I see no issue. Interest in RA remains in RA while interest in the pool who cares except it will affect life payouts.

Hello, read in the right context ok

We are talking about extra interest! Depending on the plan, it will be credited to RA if u choose Basic, if u choose other plans then it goes to CPF Life Pool. It matters and people must understand!

 

[henrylbh]

Hello, read in the right context ok

We are talking about extra interest! Depending on the plan, it will be credited to RA if u choose Basic, if u choose other plans then it goes to CPF Life Pool. It matters and people must understand!

Ok let's discuss about extra interest on 1st 30k at 6% and next 30k at 5%.

Can we exclude CPF Standard Plan as the interest rates do not matter except they affect life payouts?

Let forget about the old plan. I believe the principle of interest crediting should be the same.

According to my understanding, if you have RA as well as CPFL, the unused premium in CPFL will earn the extra interest on the first 60k. If unused premium is less than 60k, RA will take the difference in interest on combined balance.