12 Feb Who Gets Your CPF When You Pass
This article originally appeared at – https://singapore.feebasedfinancialadvice.com/who-gets-your-cpf-when-you-pass/
If you’re an Australian expat calling Singapore home, you’ve probably got your head around most of the local systems by now. But here’s something that might surprise you – your CPF savings (Singapore’s version of superannuation) isn’t automatically covered by your Will when you pass away. Yes, you read that right!
This means that you need to give some separate thought to your CPF if you’re a Singapore citizen or Permanent Resident and therefore have CPF here.
The CPF System: What You Need to Know
For my fellow Aussies, think of CPF as Singapore’s equivalent of superannuation, but with a broader scope. It’s your retirement nest egg, healthcare fund, and investment vehicle all rolled into one. However, what happens to these savings when you’re gone follows a different set of rules than what we’re used to back home.
The Simple Solution: CPF Nomination
Here’s the good news – making a CPF nomination is straightforward and free. When you nominate beneficiaries, your CPF savings go directly to your chosen nominees in cash, without any court processes. It’s clean, quick, and most importantly, ensures your money goes exactly where you want it to.
Without a nomination, your CPF savings enter a more complicated journey through Singapore’s Public Trustee Office. They’ll distribute your money according to intestacy laws, which might not align with your wishes. Even if the funds do eventually go to your intended beneficiaries, this can be a lengthy and drawn out process, and in my opinion, simply not worth the risk.
What’s Covered Under Your CPF Nomination?
Your CPF nomination covers your Ordinary Account (OA), Special Account (SA), MediSave Account (MA), Retirement Account (RA), and unused CPF LIFE premiums. However, it’s important to note that property, insurance payouts (like the Dependants’ Protection Scheme), and CPF investments fall under different rules.
If you’ve used your CPF to buy property in Singapore (as many expats do), the rules are a bit different. The CPF used for property doesn’t automatically go back to your CPF account – its distribution depends on how your property is owned. This is particularly important for those of us who’ve invested in the Singapore property market.
Life Changes? Nomination Changes!
Here’s a crucial bit: getting married automatically voids your CPF nomination. However, divorce doesn’t – your nomination stays intact unless you change it. So if you don’t fancy your ex inheriting your CPF savings, you’ll need to update that nomination!
Making Your Nomination
Ready to sort out your CPF nomination? It’s surprisingly simple. All you need is:
- Your SingPass login
- Your nominees’ details
- Two witnesses (who can’t be your nominees)
Head to cpf.gov.sg, and you can complete the process online in minutes. The more important part of the process is thinking about how you would like your CPF distributed, ensuring it aligns with your wishes, and how it fits into your overall estate plan.
Take Action Now
As Aussies, we’re used to straightforward super beneficiary nominations back home. While the CPF system might work differently, making your nomination is one of the most important things you can do to protect your loved ones’ interests in Singapore. Don’t leave it to chance – take a few minutes to make your nomination today.
Remember, just like having a good estate plan back in Australia, sorting out your CPF nomination here in Singapore gives you peace of mind and ensures your hard-earned savings go exactly where you want them to.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
To learn more about how we may be able to help you, please contact us:
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.