Written by Sophia Tan

The CPF Investment Scheme (CPFIS) was launched in 1986 and it provides members with the option to invest their CPF savings. These investments can be in various instruments such as insurance products, unit trusts, fixed deposits, bonds and shares.1

The aim is to provide members with the opportunity to enhance their retirement nest egg, which would have otherwise earned a risk-free interest should they opt to leave their money in their CPF account instead.1

How Has The Scheme Developed Since Its Launch?

There has been a review of the scheme since its launch 20 years ago. Changes were made with the intention of either ensuring that members’ monies were well taken care of, enhancing the returns on investment, or reducing the risks that members are exposed to.

However, in September 2016, Singapore’s Deputy Prime Minister Mr Tharman Shanmugaratnam announced that the government will be reviewing the scheme again. This is because the authorities noted that over the last 10 years, more than 80% of those who invested through the scheme would have been better off leaving their money in the CPF OA. The CPF OA provides returns of 2.5% per year5.

He shared that this meant that the scheme was “not fit for purpose” and is prime for reassessment5.

What Should You Do?

We expect this latest review to lead to a more stringent approach towards how you can use your CPF savings for investing. There are numerous possibilities, even including the probable discontinuation of CPFIS entirely. We can only wait for the review committee to deliver its findings and action plans.

In the meantime, as a responsible and proactive steward of your finances, we strongly encourage you to invest the excess funds that you have kept in your CPF OA now – if investing them was your initial intent.

In our view, it is a big opportunity missed should you not be able to invest due to a technicality, and not because you did not want to or lack the capability to invest. With the presence of economic pressures such as inflation and low interest rate environments, as well as the ability to live longer due to medical advancements, the adverse effects on your retirement planning are compounded.

You should therefore take decisive action now to act on news delivered by DPM Tharman in September, rather than adopt a wait-and-see attitude.

Your Investment Partnership With Unicorn

Our unique investment framework ensures that your portfolio is well-managed to help achieve your financial goals and objectives. Most of you who have invested with us and have followed our investment calls attentively are earning higher returns with your CPF OA savings (even after fees and charges are considered). This is contrary to what other CPF members are experiencing, as highlighted by DPM Tharman.

This is a reward for your trust in Unicorn and prompt decision-making when investment advice is dispensed. Your adoption of our ‘Three Bags Strategy’ investment framework, Dollar Cost Averaging (DCA) as well numerous investment reallocation exercises have delivered this return on investment. Your attention to your financial objectives, time horizon, financial capacity, psychological tolerance towards volatility and economic situations – critical elements in the financial planning process – have also aided you greatly.

It is important to note that past performance is not to be mistaken as an indication of future results. But we are confident that as long we work hand in hand in this investment journey, we should enjoy a fruitful result eventually.

We strongly recommend that you meet up with your consultant as soon as possible to review your current CPF investment allocation as well as your financial plan. Once both are in place, you have the necessary building blocks that will allow you to reap rewards into the future.

Enjoy accumulating your wealth!


1 – CPF Website


2 – Ministry of Manpower-Ministry of Health Joint Press Statement: https://www.moh.gov.sg/content/moh_web/home/pressRoom/pressRoomItemRelease/2000/announcement_on_the_revised_allocation_of%20CPF_contributions,changes_to_the_CPF_investment_scheme.html

3 – Speech at Ministerial Statement on CPF Reforms and Other Measures for a Secure Retirement:


4 – The Straits Times: http://www.straitstimes.com/singapore/cpf-review-6-things-to-know-about-the-new-cpf-lifetime-retirement-investment-scheme

5- Channel News Asia


Disclaimers and Important Notice

The information herein is published by Unicorn Financial Solutions Pte Ltd. (“Unicorn”) and is for information only. This publication is intended for Unicorn and its clients or prospective clients to whom it has been delivered and may not be reproduced, transmitted or communicated to any other person without the prior written permission of Unicorn. This publication is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to subscribe to or to enter into any transaction; nor is it calculated to invite, nor does it permit the making of offers to the public to subscribe to or enter into, for cash or other consideration, any transaction, and should not be viewed as such. This publication is not intended to provide, and should not be relied upon for accounting, legal or tax advice or investment recommendations and is not to be taken in substitution for the exercise of judgment by the reader, who should obtain separate legal or financial advice. The information and opinions contained in this publication has been obtained from sources believed to be reliable but Unicorn does not makes any representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose. Opinions and estimates are subject to change without notice. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment. Unicorn accepts no liability whatsoever for any direct indirect or consequential losses or damages arising from or in connection with the use or reliance of this publication or its contents. The information herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. If this publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this publication, which may arise as a result of electronic transmission.

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