EXECUTIVE will welcome their third child into the family,



are many types of CPF schemes but many Singaporeans, like Peter and Cassandra,
are uncertain about the CPF schemes and various uses.

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purpose of this report is to help Peter and Cassandra study their current
financial situation and predict their future financial position by analysing
the CPF schemes and various uses.



and Cassandra Loh are both aged 34 have two children,Timothy and Claire aged
seven and four respectively. Peter Loh is a payroll manager, and Cassandra is a
HR Executive, earning $5000 and $3000 a month respectively. They had both
recently bought their 4 room HDB flat two years ago but needed to get a bigger
house when their children grows older.

later, they will welcome their third child into the family, and have to pay for
maternity and delivery charges. If any medical needs arise in the family, they
would have to use their CPF Medisave accounts. In fact, Claire is diagnosed
with Hand, Foot, Mouth disease and was hospitalized at KK Women’s and
Children’s hospital, incurring more expenses.


is having thoughts of becoming a full time homemaker to focus on raising their
kids. This will result in having one less portion of income for the family.


and Cassandra aimed to retire comfortably at age 62, with $171,000 in the CPF
as their full retirement amount. They also know that they need to have the
basic amount of $85,500 in their CPF when they turn 55.




was introduced in 1953 before coming into effect on 1 July 1955, the CPF is a
compulsory savings scheme that requires all employers and employees to
contribute a portion of the employee’s monthly gross salary to the provident
fund. Before the introduction of CPF, many workers, except those working in the
civil service or in some of the larger companies, were not provided with any
form of retirement benefits by their employers. As a result, the workers had to
depend on their personal savings after retirement, which was insufficient. To
solve this problem, the government set up the CPF to ensure workers could
support themselves in retirement. The idea of setting up the CPF was raised in
the Legislative Council on 22 May 1951 when the Central Provident Fund Bill was
introduced. The bill was passed by the Legislative Council on 24 November 1953.



of Medisave


is a national medical savings scheme which helps individuals put aside part of
their income into their Medisave Accounts to meet their future personal or
immediate family’s hospitalization, day surgery and certain outpatient


this scheme, every employee contributes 8% – 10.5% (depending on age group) of
his monthly salary to a personal Medisave account. The savings can be withdrawn
to pay the hospital bills of the account holder and his immediate family


of Medishield Life


Life is a basic health insurance by the CPF board. Medishield Life provides
protection and payouts so patients pay less with Medisave or cash for large
hospital bills. It is for all singaporeans and permanent residents, protecting
them for life. Medishield subsidies treatment in public hospitals, with the
higher the class ward you choose to stay in, the lesser the subsidies.





Will Peter and Cassandra be able to meet their family’s health/medical expenses
using CPF?



the help of Medisave, CPF is able to assist Peter and Cassandra in their
family’s medical expenses by subsidising to cover for some of the expenses. As
they can use Medisave. Medisave is national savings scheme to save for future
medical expenses.


can be used for a wide variety of treatments, however there is a limited amount
they they can use from their Central Provident Fund.They can only be approved
if it is listed in the types of treatments list on their website. Next, they
also must go to an approved medical centre and the list can also be found on
their website. Once the form is approved, maximum amount will be deducted.


that Peter and Cassandra has a salary of $8000 a month, eight percent is saved
for medisave, which will be $640 (8000*20%+8000*17%)*(8/37) a month. Assuming
that they started working at 20 years old, they will have $92,160 (640*12
months*12 years) in their CPF. Their CPF will accumulate over their lifetime
and can be used on themselves and their immediate family. An example is their
daughter, Claire, is in KK Women’s and Children’s Hospital which is an approved
hospital and if she is hospitalised for 8 hours or more, Peter and Cassandra
can use medisave to pay up to $450 per day. If Claire has to stay for a day,
they will be able to use $450 from their CPF. Therefore, they will have around
$91,710 left and will be able to pay for their family’s health or medical



















Can Cassandra use her CPF to defray maternity costs incurred for the delivery
of their third child? Why?


Yes, Cassandra Loh is able to use her Medisave account
to pay for the maternity costs incurred for the delivery of her upcoming third
child. Assuming that Cassandra is earning $3000 a month working as a Human
Resource Executive, She will have to contribute $7200/per annum and her boss
will need to top up $6120/per annum take it as Cassandra Loh has work in the
company for 15 years she would have contributed $199,800 into her cpf account.
Since, Cassandra is 34 years old this year, $15,984 ( 8%) of her cpf will be
allocated into Medisave Account.

The calculation for the allocation of medisave   $199,800*8%=$15,984















For example, if Cassandra is to have caesarean
delivery and she stays in the hospital for 3 days, she will be able to claim
$1350 for (3 days of hospital stay/$450 medisave claimable per day), $2150 for
the delivery surgery and $900 on prenatal expenses therefore, the total
claimable is $4400 for caesarean delivery 


For example, if Cassandra is to have Vaginal delivery
and she stays in the hospital for 3 days, she will be able to $1350 for (3 days
of hospital stay/ $450 medisave claimable per day), $750 for the delivery
surgery and $900 on prenatal expenses therefore, the total claimable is $3000
for vaginal delivery 


During the arrival of her newborn third child,
Cassandra Loh will received Medisave grant of $4000 which will be pay out in 2
separate instalments and the grant can be used to pay for MediShield life
premiums, child vaccinations, hospital charges and approved outpatient
treatments. There is two ways to delivery the baby by vaginal or cesarean
delivery. To conclude, Cassandra Loh has $15,984 in her medisave account and it
is more than enough to cover the cost for either Vaginal or Cesarean delivery.





Will they have sufficient funds in their medisave account to sustain the
medical expenses or to meet any other health/medical contingencies? Why?


Peter and Cassandra must check if they meet all the requirements for claiming
from Medisave. The first requirement is that the family member is an immediate
family member, which are spouses, children and grandparents and they can be of
any nationality, except for the grandparents as they need to be Singaporeans.
The second requirement is checking if their family member is at an approved
medical institute, which can be checked from a list on their website. The third
requirement is whether the medical conditions or illness is an approved
treatment from the types of treatment list on their website. The last
requirement is whether their family member has stayed in the hospital for 8
hours or more. Then, they will be able to use their CPF


of the approved treatments are selected to calculate if Peter’s and Cassandra’s
Medisave is enough for the treatments.


is the inpatient hospitalisation. Inpatient hospitalisation is when a patient
is given a doctor’s letter to stay at a hospital. If this happens, they can use
up to $450 a day and the limit is based on the table of operations, the highest
limit is 7C of $7500, the lower limit is 1A of $250. If Peter and Cassandra
chose 7C, their family member can stay for 16 days. However, if their family
member is inpatient hospitalised for a psychiatric treatment, the family will
be able to use $150 a day and up to $5000 a year. This means a person can stay
up to 33 days. As Peter and Cassandra has around $91,710 in their CPF, they
have sufficient funds from their CPF to pay for their medical bills.


is approved day surgeries, meaning that a person is hospitalised as he or she
has a surgery that day. For this hospitalisation, Peter and Cassandra can use
$300 a day from their CPF account and the limit also follows the table of
operations, thus the highest amount deductible is 7C of $7500. Therefore, if anyone
family member falls under this category, Peter and Cassandra have sufficient
funds from their CPF to pay for their medical bills.


is diabetes. Diabetes is chronic disease caused by having abnormally high sugar
level. If a family member is diagnosed with diabetes, they will have to go
through this treatment, which they can use $400 a year per account, because
this is a lifelong disease, they will likely to have to use their CPF on this
yearly. However, Peter and Cassandra has around $91,710 in their CPF, they will
be able to use cover 229 times, as they have 2 accounts, if used twice a year
they will still be able to cover for 114 times. As 114 times is higher than a
person’s average lifetime, they have more than enough money in their CPF to cover
for this medical contingency. Therefore, Peter and Cassandra has sufficient
funds to cover a part of their medical bill.


is hyperbaric oxygen therapy, which is a treatment of serious infections,
wounds that won’t heal due to diabetes and many more. If a family member
requires this treatment, CPF can cover $100 per treatment. Assuming that a
family member needs to go through this treatment three times, they will have to
pay $300 in total. Thus, with around $91,710, they will be able to pay a
certain amount of their medical bills using CPF.



can the above schemes be further enhanced to meet the medical needs of CPF


Medisave, If the individual does not have enough money in their medisave
account to pay for the medical bill, he/she can use the ordinary account funds
to offset the medical bills. However, the catch is he/she will need to
contribute 40% of his salary into the cpf account until the amount used is
cover back into the ordinary account he/she will go back to contribute 20% of
the salary into CPF.


Medishield, to assist the lower and middle income groups and senior citizen,
the Government can add more illness/diseases into the medisave claimable list
so that this group of people can utilize the medishield life insurance to its
maximum. Provide special service for the pioneer generation and senior citizen.
For example one to one personal counselling and priority queue when visiting
medical clinic for appointment and to provide them with support for life.






did CPF Retirement Scheme evolve and develop since it was established?


Central Provident Fund (CPF) scheme was originally a retirement scheme
introduced by the colonial government in 1953. It was a scheme that would
benefit all employed personal. It was a retirement scheme based on
contributions of employees and employers that resembled a savings bank with
compulsory membership as well as a compulsory deposit of interest. It was a
simple savings scheme to help give low-income securities in their old age.
However, under the British rule, it was tradition for workers to look for his
employer rather than the state when needing medical care as well as other
benefits. As a result, when dealing with unemployment, the state would often
send workers back to their country as well as restrict immigrants until the
general welfare of the public improved. However, the CPF scheme was more of a
self-funding model that the British used to ensure that the funds used to look
after the colonies would not be drained.

Singapore gained independence in 1965, the People’s Action Party government
took over the scheme and made gradual and innovative changes to the scheme.
Since the inception of the scheme, the focus of the scheme was to provide an
income for elderly at old age. The CPF board only allowed withdrawal of savings
upon retirement despite the calls from unions to allow workers to withdraw the
savings in their CPF account. This carried on for over a decade until the
government decided that the CPF could be used in various methods and need not
be limited to monthly pay-outs. However, the government studied various ways to
use CPF savings for various other functions. In 1968, the home ownership
development scheme was developed to allow the public to finance the purchase of
the HDB flat to purchase houses.This has allowed Singaporeans to pay for the
mortgages of their HDB flats, using their CPF savings enabling them to have
more freedom in using their pay. This has helped to increase the affordability
of housing and as a result, home ownership has risen giving the citizens more
security in retirement. Since then, the CPF has been liberalized to meet the
needs and wants of the public. Today, members of the public can use their CPF
savings for a host of schemes such as retirement, housing, investments,
insurance and even education. This allows citizens to use their CPF in various
methods. However, the basic principles of the CPF are still applied and the
main purpose is still retirement.





How does CPF aim to help Singaporeans like Peter and
Cassandra Loh meet their retirement needs? 


enables Singaporeans to have a secure retirement by having monthly
contributions into their CPF account since the day they start their work. Since
the revamp of the CPF scheme Singaporeans will not be able to withdraw all of
their CPF money at their retirement age, the money will be given out monthly to
the retirees at the age of 65. CPF helps Singaporeans by having a basic
retirement amount as well as basic healthcare amount so that all Singaporeans
will be able to meet their retirement needs. The basic retirement amount is set
at $85,500 when we turn 55 as well as $171,000 as our full retirement amount.
We are also able to top up our CPF account to up to $256,000 to enable enhanced
retirement amount. There are 3 accounts in the CPF system which is the Ordinary
Account, Special Account and the Medisave account. Ordinary account is used for
buying property, paying for CPF approved insurance, investment as well as
education. Singaporeans like Peter and Cassandra Loh which is married and have
kids will be able to pay for their education fees using their CPF Ordinary
Account. Special Account is used for old aged and investment in retirement
related financial-products. Medisave Account used for hospitalisation expenses
and approved medical insurance. Medisave is really important at retirement age
as we will face many health issues when we grow older and thus Medisave will
help us in reducing the healthcare fees we have to pay in cash when we grow
older. At the age of 55 Retirement account will be set up which will put in
money from the Ordinary Account as well as the Special Account to help in
retirement which is optional to withdraw. CPF encourage Singaporeans to not
withdraw their CPF amount by introducing higher interest rates returns of their
CPF Savings Account. This will help in more monthly returns when we retire.



Peter and Cassandra Loh have sufficient funds to sustain a basic standard of
living during their retirement years? Why?


and Cassandra are both 34 currently and assuming that they have started working
when they graduated from university, they would have begun work a age 24 which
is the average age of a Singaporean who has just graduated from college. They
average college graduate would earn about $3000 based on the average pay of a
freshly graduated degree holder. However the starting pay differs for different
genders and Peter and Cassandra will have different starting pays when they begin
their careers. As a result, their CPF amounts will differ from each other.
Peter and Cassandra will probably have money deposited in their CPF Ordinary
and Special accounts at the age of 34. Assuming that Peter had a starting
salary of $3000, he would have to contribute a portion of their annual wage to
their CPF ordinary and Special Account.Based on this, I have calculated their
CPF Ordinary and Special accounts values based on the different percentages of
wage they have to contribute to their CPF. (See appendix for values)


both qualify for their monthly payouts based on their Retirement account
savings which they set aside which is $174,520 and $115,800 for Peter and
Cassandra respectively. Peter will receive a slightly higher monthly payout at
$1320 to $1410 while Cassandra will receive $720 to $770. The could also use
the money in the ordinary accounts to invest in investment products such as
fixed annuities where they will be able to receive a huge payout at the end of
their insurance life. They will also have their own personal savings to
supplement their retirement. In Conclusion, Peter and Cassandra will ae the
sufficient funds to support their basic needs in retirement years.


How can the above scheme be further enhanced to meet the retirement needs of
CPF members?      


half of singaporeans can meet the required minimum retirement sum. This is
because they face difficulty of having enough funds to pay for their mortgages
or changed property. In addition, due to the job nature, singaporeans earn
different amounts of salary, so the CPF savings and personal savings would also
vary. One way to help meet the retirement needs of CPF members is to encourage
companies to contribute CPF savings selectively for their deserving employees.

the most realistic way to raise CPF is to lower housing prices. Around half of
cumulative CPF savings has been given to purchasing housing, which is why many
singaporeans could not meet the required minimum retirement sum.




Give suggestions on how CPF Board can disseminate information on the above
schemes more effectively to its use`7 rs.  


board can engage Singaporean Youtubers like Jianhao Tan and Nightowl Cinematics
to create an awareness video to educate young working adults on the CPF

will be an easier way to reach out to young working adults who hardly read the
newspapers or watch the television, but instead are frequently on their social

videos will not be a typical television of the CPF schemes, but instead infuse
humour and sadness to catch their attention, and at the same time educate them.


board can also use radio advertising to inform the older working adults on the
CPF schemes. In 2014, 92% of radio listeners actively listen to the radio.
Since radio is heard by a wide range of audience, it is effective and fast to
disseminate information using radio informative advertising.










Monthly Salary

Ordinary Account

Special Account


































Monthly Salary

Ordinary Account

Special Account