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HomesingaporeBill passed to close foreigners' CPF accounts, allow easier access to information...

Bill passed to close foreigners' CPF accounts, allow easier access to information of deceased members

SINGAPORE: Parliament on Monday (Nov 6) passed a Bill to close the Central Provident Fund (CPF) accounts of around 300,000 foreigners from April next year, and allow nominees to access CPF information of deceased members more easily.

Under the amendments to the CPF Act, the Board will allow information – such as the deceased member’s CPF balances, the names of nominees and the proportion of money to be received – to be disclosed from Feb 1 next year.

The amendments will also allow the CPF Board to issue certain notifications electronically and process some transactions after a member’s death.

WHY IT MATTERS

Currently, members need to authorise the CPF Board to allow others to access their information after their death. Those who are authorised would need to write in to request for the information, and those who are not authorised have to obtain a court order. 

“Such processes complicate the handling of a deceased member’s CPF account and add additional stress to families in bereavement,” said Senior Minister of State for Manpower Koh Poh Koon, adding that the CPF Board received more than 3,000 requests to access deceased members’ information this year.

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Issuing documents electronically will be more convenient and efficient, the Ministry of Manpower (MOM) said.

Meanwhile, closing foreigners’ CPF accounts means that resources dedicated to related schemes will be “better focused on supporting the needs of residents who have a long-term commitment to Singapore”, Dr Koh said.

LAWMAKERS’ CONCERN

Members of Parliament (MPs) welcomed the changes to limit the CPF system to Singapore citizens and Permanent Residents (PRs) and streamline processes to access information from the accounts of deceased members. 

But they also raised a number of concerns: 

Mr Saktiandi Supaat (PAP-Bishan-Toa Payoh) asked if ceasing the participation of foreigners would cause businesses and employers to turn away from Singaporeans as they do not have to pay additional CPF contributions for foreign workers.Mr Yip Hon Weng (PAP- Yio Chu Kang) asked whether those in the process of applying for Singapore citizenship and PR will be allowed to retain their CPF accounts during this period.MPs also asked for more details on who will receive deceased members’ information and what will be disclosed.

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GOVERNMENT’S RESPONSE

Addressing questions on whether employers will turn away from Singaporean workers, Dr Koh pointed to the qualifying salaries of Employment Pass (EP) and S Pass holders, which are benchmarked against the top one-third of wages of residents, including CPF contributions.

“There is no wage cost advantage for employers to hire foreign professionals,” Dr Koh said.

On whether non-residents who are applying for permanent residency can participate in CPF schemes, Dr Koh noted that the application process can take six months or longer. 

The accounts of those who have not been granted PR status as of Apr 1 next year will be closed.

“Nonetheless, once they are granted permanent residency, they will then be part of the CPF system,” he said.

In response to questions about who can receive the CPF information of deceased members, Dr Koh said nominees and beneficiaries under the relevant intestacy laws will be allowed access. Intestacy laws cover what happens if a person dies without a will.

“To be clear, if a family relation is not considered a next-of-kin under the relevant intestacy laws, they will not be allowed access to the deceased member’s CPF information.”

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He also noted that nine in 10 members who make nominations have already authorised all their nominees to access their CPF information upon their demise.

“Hence, for the vast majority of those members today, the amendments are in fact aligned with their intentions,” said Dr Koh.

Details that will help nominees or beneficiaries under relevant intestacy laws settle the deceased member’s post-demise matters will only be disclosed. 

This will include details of the deceased’s participation in CPF schemes but exclude details of the relationships between the nominee and the deceased, as well as information on the deceased’s witnesses to the nomination.

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