Singapore has implemented significant reforms to its Central Provident Fund (CPF) system in 2025, marking the most comprehensive pension overhaul in recent years. These changes are designed to strengthen retirement security, address an aging population, and adapt to evolving workforce patterns. From increased contribution rates for senior workers to enhanced retirement sum options, employees across all age groups need to understand how these modifications will impact their financial future.
Major Structural Changes Taking Effect
Special Account Closure for Members 55 and Above
From January 19, 2025, the Special Account (SA) has been permanently closed for all CPF members aged 55 and above. This represents a fundamental shift in how retirement savings are managed for older workers.
Key implications:
- SA savings are automatically transferred to the Retirement Account (RA) up to the Full Retirement Sum (FRS)
- Any excess savings beyond the FRS move to the Ordinary Account (OA)
- RA savings continue earning the long-term interest rate of at least 4% per annum
- Existing CPFIS investments using SA funds can be retained
Enhanced Retirement Sum Expansion
The Enhanced Retirement Sum (ERS) has been raised to four times the Basic Retirement Sum (BRS), reaching S$426,000 from the previous S$318,000. This change provides members with greater opportunities to boost their retirement income.
Benefits for employees:
- A male member turning 55 in 2025 who tops up to the raised ERS will receive about $3,300 per month in CPF LIFE payouts from age 65, compared to about $2,500 previously
- Higher monthly payouts for life after age 65
- Voluntary contribution flexibility for enhanced retirement planning
Contribution Rate Adjustments
Senior Worker Contribution Increases
Total CPF contribution rates for senior workers aged 55 to 65 will increase by 1.5% starting from January 1, 2025. This includes:
- Employer contribution: Increased by 0.5 percentage points
- Employee contribution: Increased by 1.0 percentage points
- A one-year CPF Transition Offset (equivalent to half of the 2025 increase in employer contributions) will be provided to cushion the impact on businesses
Salary Ceiling Adjustments
The CPF monthly salary ceiling has been raised to $7,400 from $6,800, with plans to reach $8,000 by 2026. This change affects higher-income employees by:
- Increasing maximum CPF contributions
- Boosting overall retirement savings potential
- Keeping pace with rising wages and inflation
Enhanced Support Schemes
Matched Retirement Savings Scheme (MRSS) Improvements
The MRSS has undergone significant enhancements to support more Singaporeans in building retirement savings:
Key updates:
- Annual matching grant cap increased from $600 to $2,000
- Age cap removed, extending benefits beyond age 70
- Lifetime matching cap remains at $20,000
- Expansion to include younger Singaporeans with disabilities registered with MSF
Platform Workers Integration
New mandatory CPF contributions for platform workers and operators will be gradually implemented:
- Platform workers born after January 1, 1995: Contributions increasing to 20% by 2029
- Platform operators: Contributing up to 17%
- Older platform workers: Optional participation with MediSave-only alternatives
Future Healthcare Enhancements
MediSave Improvements Coming in 2026
The MediSave annual withdrawal limit for outpatient scans will double from $300 to $600 from January 1, 2026, benefiting over 500,000 patients annually.
New Matched MediSave Scheme (MMSS)
A five-year Matched MediSave Scheme will be introduced from 2026 to 2030, providing dollar-for-dollar matching for voluntary cash top-ups to MediSave Accounts up to $1,000 annually for eligible members aged 55 to 70.
Support for Lower-Income Workers
Work Incentive Scheme (WIS) Enhancement
The qualifying income cap for WIS has been raised to $3,000 from $2,500, ensuring continued support for lower-wage workers as their incomes grow.
Silver Support Scheme Boost
Quarterly cash payments to seniors aged 65 and above will increase by 20% starting in 2025, with the qualifying household monthly income threshold raised from $1,800 to $2,300.
Summary of Key Changes
| Change Category | Previous | 2025 Update | Impact |
|---|---|---|---|
| Special Account | Active for 55+ | Closed for 55+ | Funds moved to RA/OA |
| Enhanced Retirement Sum | 3x BRS ($318,000) | 4x BRS ($426,000) | Higher retirement payouts |
| Monthly Salary Ceiling | $6,800 | $7,400 | Increased contribution capacity |
| Senior Worker Contributions | Lower rates | +1.5% total | More retirement savings |
| MRSS Annual Cap | $600 | $2,000 | Enhanced matching benefits |
| MRSS Age Limit | Up to 70 | No limit | Extended eligibility |
| MediSave Scan Limit | $300 | $600 (2026) | Better healthcare coverage |
Frequently Asked Questions
Q1: How do the contribution rate increases affect my take-home pay?
If you’re aged 55-65, you’ll contribute 1% more of your salary to CPF, while your employer contributes an additional 0.5%. While this reduces immediate take-home pay, it significantly boosts your retirement savings and long-term financial security.
Q2: What happens to my Special Account savings after closure?
Your SA savings are automatically transferred to your Retirement Account up to the Full Retirement Sum, where they continue earning at least 4% annual interest. Any excess moves to your Ordinary Account for flexible access.
Q3: Should I consider topping up to the new Enhanced Retirement Sum?
The decision depends on your retirement goals and financial situation. With the ERS increase to $426,000, you could receive approximately $3,300 monthly from age 65, compared to $2,500 under the previous system. Consult CPF’s retirement planning tools to assess your specific situation.
