CPF’s New Investment Scheme

During Budget 2026, there was an announcement of CPF to introduce a new investment scheme in the first half of 2028, offering simplified, low-cost and diversified commercial investment products.

 

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According to the CPF website, the key features include:

Automatic age-based rebalancing of investment portfolio mix, with phased liquidation

Investors’ portfolio mix will automatically rebalance along a glidepath from higher-risk assets, such as equities, to lower-risk assets, such as bonds, as they age, before being liquidated in phases by the target date. For example, if the target date is the Payout Eligibility Age (PEA) of 65, the investor's portfolio could be liquidated in phases a few years before PEA.

This calibrates the amount of investment risk to which investors are exposed to at different stages of life and mitigates the risk of a market downturn during exit.

Upon phased liquidation, the investment sale proceeds will be transferred to the investor’s Retirement Account (RA), up to the Full Retirement Sum (FRS). Any remaining proceeds will be transferred to the Ordinary Account (OA). The funds in the RA can then be used to join CPF LIFE when the member decides to start his monthly payouts anytime from age 65, and help boost his monthly payouts.

Simplified choice

 

To simplify decision-making for investors, we are looking to select two to three reputable product providers to offer a small number of options.

Low fees

 

All-in fees will be capped to minimise costs and allow investors to retain and benefit from more of their investment returns.

The Bedokian’s Take

To summarise, this new CPF investment scheme is designed for people who want to take on more risk in beating the prevailing CPF interest rates, yet have a hands-free approach to investing via the automatic rebalancing and liquidation attributes. In other words, I would define it as a “robo-investing plus”, with the plus part being providing the service of divestment.

While I would wait for further details on the new investment scheme, such as the make-up and duration of the portfolios available, at first look it is a pretty good idea for CPF to implement this. However, due to the potential long-term nature of the portfolios, it may be more suitable for individuals who still have a long runway (at least 20 years according to the CPF’s example) than those whose retirement age is coming soon.

References

https://www.cpf.gov.sg/member/infohub/news/news-releases/cpfb-to-introduce-new-investment-scheme-in-2028

 

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