SINGAPORE - The Government will review the Central Provident Fund Investment Scheme (CPFIS), Deputy Prime Minister Tharman Shanmugaratnam said on Tuesday (Sept 13), taking up a recommendation proposed by an advisory panel early last month.
The CPFIS was set up to offer CPF members a way to earn higher returns on their savings but it is "not fit for purpose", Mr Tharman told an audience at the Economic Society of Singapore's annual dinner.
Over the past 10 years, more than 80 per cent of the CPF members who put their savings into an investment product via the CPFIS would have been better off just leaving their money in the Ordinary Account, which earns a guaranteed 2.5 per cent each year, Mr Tharman noted.
Some 45 per cent of those who made use of the CPFIS even made losses over the same period.
In its second and final set of proposals to the Government last month, the CPF Advisory Panel, which had been tasked to recommend ways to improve the CPF system, had mentioned a need for the CPFIS to be reviewed.
And indeed the Ministry of Manpower will do so, Mr Tharman said on Tuesday.
This is in line with one of the priorities the Government will have to focus on to take the CPF system into the future, he said - providing a convenient option for those with more than the basic CPF savings levels to earn higher returns.