Sunday, 20 July 2008

What you need to know about your CPF Part 1

Do you know that your CPF can't be passed on by Will?

A nomination must be made in order to pass on the money to your beneficiary. A number of CPF members who died more than two years ago have left behind $2.1million that remains in Government hands - all because they failed to make a nomination! Yet it's as simple as filling out a form. CPF monies are an asset that passes on according to CPF Act, and not according to what you dictate in your will.

What you need to know:

You must nominate beneficiaries using the CPF Board's nomination form, not through a personal will. (You can either download from the CPF website or the easier way will be dropping me an email and I will send the form to you.)

You cannot give away specific items, for example, Economic Restructuring Shares. You can only specify a percentage of your total CPF assets, for example, one-third or 50 per cent, to be left to a beneficiary and another percentage to another.

You can nominate organisations as beneficiaries as long as they are registered as legal bodies.

The nomination form must be signed by two witnesses who are not your nominees and are above 21 years of age, of sound mind, and not nominees. All three of you should be signing in the presence of one another at the same sitting.

It is wise to nominate more than one person. If the primary beneficiary dies, your CPF monies will flow in a pro-rated manner to the secondary beneficiaries.

Be sure to review your nomination regularly especially pertinent . You must make a new nomination when you marry or re-marry (in which case your nominations will be automatically revoked), divorce, or when a beneficiary has passed away.

To ensure speedy claims, your beneficiaries should submit to the CPF Board your death certificate and marriage certificate, if applicable. The investigations and processing take about three months.

What are covered under CPF nomination and what are not:

Your beneficiaries will get the following assets in cash either via cheque or direct credit into a bank account:

  1. Sums in the Ordinary, Special and Retirement Accounts;
  2. Sums insured under the Dependent's Protection Scheme,
  3. Discounted SingTel shares
  4. Fixed deposits under the CPF Investment Schemes,
  5. Economic Restructuring Shares.

But the following, not covered by the CPF nomination, will form part of your estate to be distributed according to your will or Intestate Succession Act, which covers persons who died without leaving legal wills:

  1. Cash and investment under the CPF Investment Scheme ( both Ordinary and Special Accounts )
  2. Immovable properties bought with CPF monies,
  3. Shares bought under the DelGro shares scheme, and New Singapore Shares.

*Note: All the above discussed are base on Singapore context only.


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