CPF Board launching new investment scheme with potential higher returns, will give S$1.5K top-up to eligible S’poreans

Budget 2026: PM Lawrence Wong announces new CPF investment scheme offering potential higher returns

As part of his Budget 2026 announcement on 12 Feb, Prime Minister (PM) Lawrence Wong announced a new investment scheme from the Central Provident Fund (CPF) Board that could potentially yield higher returns.

The CPF Board stated that it will implement the voluntary scheme, offering life-cycle investment products, in 2028.

Separately, the Board will also hand out a S$1,500 CPF top-up to eligible Singaporeans aged 50 and above.

New CPF investment scheme trades higher risk for higher potential returns

Currently, the CPF Investment Scheme (CPFIS) provides an option for members to invest their CPF savings.

The CPF Board stated that the new scheme complements the existing system.

It provides the choice for members who are willing to take some risk for higher potential returns on their CPF savings.

A statement on the CPF website described the scheme as offering “simplified, low-cost, and diversified life-cycle investment products”.

The scheme’s key features include:

• Automatic rebalancing of investors’ portfolio towards lower-risk assets as they age.
• Only two or three reputable product providers offering a small number of options, for simplification of choice.
• A cap on all-in fees to minimise costs.

Scheme aimed at those seeking long-term investment but lack expertise

The new scheme caters to members who want to stay invested in the long term, such as up to 20 years, but may lack financial expertise or do not prefer active investment management.

As with all investment products, the new investment scheme will carry investment risk, with returns subject to market conditions.

The CPF Board encouraged members to carefully consider their objectives and risk tolerance before making any investment decisions.

Members who prefer risk-free returns can continue earning the CPF interest rates instead of participating in the new scheme.

The CPF Board plans to engage the industry from March 2026 on the product specifications for the new scheme.

They expect selected providers to be announced in the first half of 2027, with the scheme being launched in the first half of 2028.

CPF top-up of S$1,500 for older Singaporeans with low retirement savings

Separately, Mr Wong announced CPF top-ups of up to S$1,500 to enhance retirement support in Singapore.

Only Singaporeans aged 50 and above are eligible, with the criteria as follows:

• CPF retirement savings below S$110,200.
• Not owning more than one property.
• Living in a residence with an annual value (AV) of not more than S$31,000.

“Those with lower balances will receive larger top-ups, so that support is targeted at where it is most needed,” PM Wong said.

Singaporeans who have retirement savings below S$60,000 and a residential AV of up to S$21,000 will get the full S$1,500 CPF top-up.

CPF contribution rates of employees aged above 55 to 65 will also see an increase from 1 Jan 2027 onwards.

For workers aged above 55 to 60, employees’ contribution increased from 18% to 19% while employer contribution rose 0.5% to 16.5%.

As for workers aged above 60 to 65, they will see a 0.5% increase in both employer and employee contributions.

Also read: S’pore ranks 5th in global ranking of retirement schemes in 2024, jumped two spots from previous year

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Featured image adapted from Lawrence Wong on YouTube and by MS News.