CPF unveils new “escalating plan” for retirement payout scheme

Monthly payout increases 2% per year.

The monthly payout under the new “escalating plan” may be lower than the standard plan at the start, but the new option actually increases the payout by 2% per year.

Assuming initial escalating payout is 20% less than Standard payout, it will grow bigger after about 13 years. Members are also guaranteed cumulative payout higher than both Standard and Basic at the start.

The new option is one of the two latest recommendations from the Central Provident Fund Advisory Panel set to be included in the national retirement savings system.

The other option is a rehashed lifetime retirement investment scheme, which pegs annual fee to 0.5%, and provides for a less-worrisome and low-cost scheme for members who are after potential better long-term returns.