A comprehensive guide to CPF for newly approved Permanent Residents

Congratulations on your newly initiated Permanent Residency (PR) status! 

You are now a participant of one of the best-managed social security schemes in Asia, the CPF (Central Provident Fund). 

While some may lament that their take-home pay will be lowered due to compulsory CPF contributions, in actuality, you might be better off financially.

Read to find out more about CPF basics, your contribution rates, and what will happen to your CPF account if you renounce your PR status.

What is CPF?

The CPF (Central Provident Fund) is a comprehensive social security plan that aims to help its members (both citizens and permanent residents) meet their retirement, housing and healthcare needs. You are only able to withdraw part of these savings at the age of 55 and later. 

CPF is made up of three accounts: Ordinary Account (OA), Special Account (SA), and Medisave Account (MA). When you turn 55, a Retirement Account (RA) will be created, and your SA will be closed.

Refer here for the latest CPF interest rates.

Similar to a regular savings account, these contributions earn risk-free interest on your behalf. 

Over time, this accumulation of wealth allows CPF to fulfil its intended mission of helping its citizens and residents meet their retirement and financial needs. Besides retirement, CPF can be used for education, healthcare and housing purposes.

How much CPF contributions do Singapore PRs have to make?

There are two main components to CPF contributions: from employers and from employees. 

Singaporeans and PRs who earn above S$50 a month must receive CPF contributions from their employers. 

If your monthly income exceeds S$500 a month, you will have to contribute your share (i.e employees’) of CPF contributions.

As a new PR, your contribution to CPF begins on the date of your status approval. Understandably, this sizable deduction from your take-home wage might be hard to accommodate at the start, thus, you (and your employers) will pay a lower contribution rate, known as graduated rates (G), during your first two years. 

From the third anniversary of your PR status, both you and your employer will have to contribute the full amount, known as full rates (F), which is the same as what Singapore citizens need to contribute.

Understanding graduated vs full rates for PRs 

PRs and their employers can choose from three contribution arrangements:

1. Graduated employer & graduated employee (G/G): Both employer and employee contribute at graduated rates
2. Full employer & graduated employee (F/G): Employer contributes at full rate, while employee contributes at graduated rate.
3. Full employer & full employee (F/F): Both employer and employee contribute at full rate.

To simplify, the first option is the “default,” while the second and third are for those (or their employers) who want to contribute more CPF than the graduated rates during the first two years.

You can also voluntarily top up your CPF through the Retirement Sum Top-Up Scheme (RSTU).

Below is a breakdown of CPF contribution rates for new PRs during the adjustment period.

Transition to full rates from the third year

From the third year of your PR status onwards, both you and your employer will contribute at the full rates. 

These rates are determined by your age group and are subject to periodic adjustments.

What is CPF LIFE, and should it be part of your retirement plan?

CPF is a cornerstone of retirement adequacy for many, if not most Singaporeans.  

This is why a lot of emphasis has been placed on helping CPF members accumulate sufficient retirement savings in their accounts. 

The risk-free guaranteed interests, grants, tax relief benefits and investment flexibility have made it very attractive to make CPF a key part of individuals’ retirement plans.

CPF LIFE is an annuity scheme that provides lifelong monthly payouts from age 65 (or you can opt to delay the start-up until age 70). 

When you turn 65, you will be automatically enrolled in CPF LIFE if you were born in 1958 or after, and have at least S$60,000 in CPF retirement savings – yes, PRs included.

The amount you receive depends on your Retirement Account (RA) balance and the plan you choose (learn more about CPF LIFE plans here). 

If you intend for CPF LIFE to be a key source of income during your retirement, you would want to ensure that you have a plan and goals to ensure that the monthly payouts will be able to sustain you throughout your retirement. 

Grow your CPF retirement savings

To grow your CPF savings for retirement, you can either make additional cash top-ups to your CPF, and/or invest these savings. 

As mentioned above, CPF offers flexibility for you to invest your CPF savings. For those who wish to take more risks and make your CPF savings work harder for higher returns compared to CPF’s risk-free, guaranteed interests, you may wish to explore the CPF Investment Scheme (CPFIS). 

What happens to your CPF if you plan to leave Singapore?

If you keep your PR status

If you intend to leave Singapore temporarily but want to keep your PR status, your CPF account will still be active, and existing funds will still earn risk-free interest. 

You and your overseas employer are not required to make any contributions to your CPF while you are abroad.

While you will not be able to use your CPF funds for overseas housing or medical expenses, you are still entitled to use it for other family members residing in Singapore.

If you renounce your PR status

If you plan to leave Singapore permanently and renounce your PR status, you can apply to the CPF Board to withdraw all of your savings. 

It is encouraged that you book an appointment, or if you are a Malaysian, complete this online form to close your CPF account and transfer your savings into a bank account before leaving the country. Otherwise, additional verification will be required for forms completed overseas as certification at a Singapore Overseas Mission.

If you do not close your account, it will be automatically closed in the month following your renunciation, meaning if you renounced your Singapore Citizenship or Permanent Residency in Nov 2025, your account will be closed in Dec 2025. 

These savings will earn interest similar to commercial bank interest rates (instead of the prevailing CPF interest rates) until 31 Mar 2027. Subsequently, no interest will be paid.

Frequently asked questions

How do I determine the start and end date of my lower CPF contribution rate?

The first year of your Permanent Resident status begins at the date of approval of your entry permit (Form 5 or Form 5A), and it ends on the last day before the second anniversary of your SPR conversion.

Consider this example:

Do you have to prorate CPF contributions?

If you obtained your PR status partway through a month, both your employee and employer CPF contributions will be prorated to reflect the specific number of days remaining in that month.

Here’s how to calculate the prorated CPF:

1. Find out your CPF contribution rate: Determine what the contribution arrangement is for you and your employer, and the respective contribution rates.
2. Calculate daily contribution rate: Divide the monthly contribution rate by the number of days in that month to determine a daily rate.
3. Apply to remaining days: Multiply this daily rate by the number of days remaining from the date of PR approval to the end of the month.

Example of a prorated contribution

Let’s say your PR status was approved on the 15th of June, and you’re on the Graduated (G/G) rate for your first year:

• Total number of days in June: 30
• Days as PR in June: 16 (from 15th to 30th)
• Monthly CPF contribution rate for employee: 5% 
• Monthly CPF contribution rate for employer: 4% 

In this case, the monthly CPF contribution amount would be prorated to cover just these 16 days, and both you and your employer would contribute accordingly.

This prorated system helps to ease you into CPF contributions as a new PR without requiring a full month’s contribution when you haven’t held PR status for the entire month.

For precise calculations, you can use the CPF contribution calculator.

What happens to my CPFIS investments or CPF LIFE when I renounce my PR status?

When you renounce your PR status, your CPF LIFE plan will be terminated, and your CPF LIFE premium balance (if any) and CPF savings will be transferred to your bank account. 

For CPFIS-OA, CPF will inform your agent bank to close your CPF Investment Account. The agent bank will then contact you for the withdrawal of your investments and cash balance (if any). Your investments will be transferred to your own name, and you may choose to continue servicing your investments using cash or liquidate them.

Similarly for CPFIS-SA, CPF will inform your product provider to transfer your investment to your own name. 

For more information on how renouncing your PR status will affect your participation in schemes, visit CPF’s FAQ page here.