Quick Read
- Singapore’s CPF Board will launch a new investment scheme in the first half of 2028.
- The scheme will offer simplified, low-cost ‘life-cycle’ investment products to help members grow retirement savings.
- Prime Minister Lawrence Wong announced the initiative during his Budget 2026 speech on February 12, 2026.
- Products will automatically rebalance investments, taking more risk when members are younger and less as they approach retirement.
- Participation in the new scheme will be voluntary, and fees will be kept low.
SINGAPORE (Azat TV) – Singapore’s Central Provident Fund (CPF) Board is set to introduce a new, simplified investment scheme in the first half of 2028, a move announced by Prime Minister Lawrence Wong during his Budget 2026 speech on February 12, 2026. This initiative aims to provide CPF members with low-cost, diversified “life-cycle” investment products, designed to help them strategically grow their retirement savings, particularly targeting those who seek higher returns but may lack the expertise or time for active investment management.
The upcoming scheme will complement the existing CPF Investment Scheme, which already offers members a broad spectrum of investment instruments. However, the new offering distinguishes itself by focusing on simplified, commercially provided life-cycle products that automatically adjust investment risk based on a member’s age and proximity to retirement. This approach is intended to cater to long-term investors willing to take calculated risks for potentially greater returns, while mitigating the complexities often associated with navigating diverse market offerings.
Understanding the Life-Cycle Investment Scheme
A core feature of the new CPF investment scheme is its ‘life-cycle’ design. As explained by Prime Minister Wong, this model allows members to take on more investment risk, with greater exposure to equities, when they are younger and have a longer horizon until retirement. As they approach their retirement age, typically around 65, their investments will be automatically rebalanced towards safer assets, such as bonds. This systematic adjustment, known as a ‘glide path,’ is formula-based and aims to reduce exposure to riskier assets over time, thereby mitigating the impact of potential market downturns precisely when members need their savings most.
The CPF Board and Ministry of Manpower (MOM) elaborated in a joint statement that this approach calibrates investment risk at different stages of life, helping to protect accumulated savings as a member nears retirement. For instance, a portfolio might undergo phased liquidation a few years before the target retirement age, with proceeds transferred to the Retirement Account (up to the full retirement sum) and any remainder to the Ordinary Account. Funds in the Retirement Account can then be used for CPF Life monthly payouts from age 65.
Rationale Behind the New CPF Offering
Prime Minister Wong highlighted that while the CPF system offers stable, risk-free interest rates, some members, especially younger ones, are prepared to take on more risk for potentially higher returns. He noted that individual stock picking often proves challenging for retail investors, making broad, diversified exposure through low-cost funds a more sensible approach. The Government, after studying recommendations from the CPF Advisory Panel, decided to actively shape and develop such products under a new scheme, rather than leaving it entirely to the market.
A key requirement for the new scheme will be maintaining low fees, making these sophisticated investment options accessible and cost-effective for a wider range of CPF members. The government plans to select two to three credible providers to ensure simplicity of choice. The CPF Board and MOM also pointed to market developments, including technological advancements and digital investment platforms, as factors making it timely for commercial providers to offer these products at more affordable costs. They observed an increasing global adoption of such products in government pension schemes, citing examples from the United States and Britain.
Voluntary Participation and Implementation Timeline
Participation in the new investment scheme will be entirely voluntary, allowing CPF members to opt in based on their financial goals and risk appetite. The government will also intensify efforts to educate members on whether this option is suitable for their individual circumstances, emphasizing its potential benefits for younger members who can better withstand short-term market fluctuations.
To facilitate its launch, the government has indicated its readiness, in principle, to provide some time-limited support to kick-start the scheme. The CPF Board will commence engagement with the industry in March 2026, inviting potential providers to express their interest. The selection of these providers is anticipated to be announced in the first half of 2027, paving the way for the scheme’s full launch in the first half of 2028.
It is important to note that all investment products inherently carry risk, and returns are subject to prevailing market conditions. CPF members who prefer a risk-free approach can continue to keep their savings in their CPF accounts, earning stable interest rates.
The introduction of this new CPF investment scheme represents a strategic governmental effort to enhance retirement planning options for Singaporeans, blending the stability of the national provident fund with modern, diversified investment strategies. By emphasizing low-cost, automatically rebalancing products, the initiative aims to empower members to pursue higher long-term returns while addressing common barriers like lack of investment knowledge or time, thereby fostering greater financial resilience across different life stages.