Singapore’s Central Provident Fund (CPF) Board will introduce a modern, voluntary investment scheme in 2028 designed to offer longer-term investors a simplified and low-cost option, Prime Minister Lawrence Wong announced Thursday as part of the Budget 2026 statement.
The scheme, an alternative to the existing CPF Investment Scheme (CPFIS), will target CPF members with a longer time horizon before retirement who are willing to accept greater risk in pursuit of potentially higher returns but lack specialized investment expertise, according to a joint statement released by the CPF Board and the Ministry of Manpower (MOM).
Participation will be voluntary, mirroring the structure of the CPFIS. The CPF Board will collaborate with commercial product providers – anticipating two to three partners – to curate investment options, streamlining the decision-making process for investors. “Here’s essentially a life-cycle investment approach, with a predefined glide path to retirement,” Wong stated. “In other words, members take on more risk, with greater exposure to equities when they are younger and their investments are automatically rebalanced towards safer assets as they approach retirement.”
The investment portfolio will be systematically liquidated in phases as investors approach their target retirement date, such as age 65, when they become eligible for CPF payouts. This phased liquidation is intended to manage investment risk throughout different life stages and to avoid forced sales during market downturns. Proceeds from the liquidation will be transferred to the investor’s Retirement Account, up to the prevailing Full Retirement Sum. Any remaining funds will be directed to the Ordinary Account.
The scheme will feature a life-cycle investment product, automatically adjusting the portfolio’s risk profile as investors age, shifting from higher-risk assets like equities to lower-risk assets like bonds. This approach, increasingly common in international pension schemes, including those in the United States and the United Kingdom, aims to provide a hands-off investment experience.
To maintain affordability, all-in fees – encompassing total expense ratio fees, wrap fees, and distribution costs – will be capped. The CPF Board will begin engaging with the financial industry in March 2026 to finalize product specifications and solicit expressions of interest. The Board will leverage independent investment consultants to evaluate applications from potential product providers. Selected providers are expected to be announced in the first half of 2027, with the scheme’s launch slated for the first half of 2028.
The CPF Board confirmed there will be no age limit for participation, though it noted that younger members, with a longer investment horizon, are likely to benefit most from the potential for higher returns associated with equity exposure and the ability to weather market fluctuations. Providers will be required to disclose illustrative returns aligned with the risk profiles of their products. “In general, potential returns on investments should be commensurate with the risk of the underlying assets,” the CPF Board stated in response to queries from CNA.
The Board anticipates that economies of scale, stemming from the collective CPF savings invested through the scheme, will benefit investors by leveraging existing commercial underlying funds. While the scheme encourages long-term investment, the CPF Board has not yet specified whether investors will be permitted to opt out before the full investment term.
