CPF Nomination: 3 Important Reasons Why You Must Do

CPF nomination – something that most of us hear before but…

may not know why it is very important to do it.

Through experience with my friends and customers, I find out that some of them have not done their CPF nomination.

So let me walk you through on why we should do it!

Nomination

1

If you don’t make a CPF nomination…

Your CPF money will be transferred to Public Trustee's Office (PTO).

PTO will charge an admin fee.

Some of us think that when we pass away, CPF will automatically distribute the money to our families.

It is TRUE only if you make a nomination.

cpf nomination not made transfer to public trustee office

Public Trustee’s Office will charge an admin fee for your CPF money.

So how much does PTO charge?

public trustee office charges if no nomination made on cpf

Let’s do a simple calculation based on $100k, $300k and $500k.

Amount of CPF money $100,000 $300,000 $500,000
First $1,000 (2.4%) $24 $24 $24
Next $9,000 (1.5%) $135 $135 $135
Next $240,000 (0.75%) $675 $1,800 $1,800
Next $250,000 (0.45%) $0 $225 $1,125
Excess of $500,000 (0.3%) $0 $0 $0
Total Fees Charged $834 $2,184 $3,084

(Note that the fees cannot be waived.)

Conclusion:

The charges can be quite substantial to some of us.

If you want to avoid PTO charges, do a nomination. It is simple to do one.

Find out how to do your CPF nomination below.

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DO YOU KNOW

CPF nomination is not covered under Will!
A will cannot be used to distribute CPF money.

2

If you don’t make a CPF nomination…

The process is troublesome, takes very long and will not be distributed if the beneficiary does not apply to PTO.

If you make a nomination, the process is straightforward. The CPF money will be paid out directly to your nominees.

with cpf nomination cpf board will pay the money directly

But if you don’t…

the process is really troublesome for your family members. The money is not paid out, unless they apply.

First, they need to apply online:

online application for cpf money to be distributed

And they need to gather all the necessary documents:

documents to be submitted for distribution of cpf money

I personally went to test out the procedure.

This is what you see when you login with your SingPass:

cpf money takes one month to process

You will need to scan all the required documents and it takes a while to complete the application.

The whole application will take 1 month to process. If the documents are not in place, it will take longer.

And furthermore, each beneficiary needs to do it separately.

Conclusion:

Not doing nomination will incur lots of inconvenience and it will be very time consuming to get the CPF money.

Find out how to do your CPF nomination below.

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DO YOU KNOW

A marriage will automatically revoke an existing nomination, if any.

3

If you don’t make a CPF nomination…

Your money might not be distributed according to what you want

For example, you have parents, spouse and a child.

When you sit down and think about it, you might want leave some for your parents in case they need it for retirement.

Let’s assume that because your child is still small, you only want to leave money for your spouse.

So this is how you might want to distribute:

Percentage
Mum 25%
Dad 25%
Spouse 50%
Child 0%

But if you don’t nominate, this is what will happen:

Percentage
Mum 0%
Dad 0%
Spouse 50%
Child 50%

Why?

Without nomination, CPF money will be distributed according to the Intestate Succession Act (for non-Muslim).

cpf money distributed in line with intestate succession act

Let me show you a few common situations of the Intestate Succession Act:

intestate succession act

Conclusion:

If you want to distribute your CPF money according to what you want, do a nomination.

Next, let’s find out how to do your CPF nomination. It is really simple.

How to make your CPF nomination

It is very simple. Just follow the steps below.

Step 1

  • Think carefully who you want to nominate to
  • Think carefully about the percentage
  • Remember their name and NRIC (or passport number for foreigners)

Step 2
Head down to any of the 5 CPF centres below:

CPF Centre Address Postal Code Nearest MRT
Maxwell The URA Centre East Wing
(opposite Maxwell Food Centre)
45 Maxwell Road #01-11
069118 Tanjong Pagar/Telok Ayer
Bishan 3 Bishan Place #01-01 579838 Bishan
Jurong 21 Jurong Gateway Road #01-01 608546 Jurong East
Tampines 1 Tampines Central 5 #01-01 529508 Tampines
Woodlands 900 South Woodlands Drive #01-02
Woodlands Civic Centre
730900 Woodlands

The CPF staff will be your witness. You don’t need to bring any witness down.

Opening Hours:

  • Mon – Fri, 8am – 5pm
  • Sat, 8am – 1pm

(Note: CPF Maxwell is closed on Sat.)

It is best to make an appointment online for shorter waiting time. You get it done within 10 mins.

Don’t walk in, you need to wait quite a while.

For more information on the address and making of appointment, visit CPF website.

  • member@cpf.gov.sg
  • 1800 227 1188
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DO YOU KNOW

A divorce does not revoke an existing nomination, if any.

3 Types of CPF Nomination

Not many know that there are actually 3 types of nomination:

  • Cash Nomination (This is the default)
  • Enhanced Nomination
  • Special Needs Savings Nomination

Here’s a quick summary:

cpf nomination cash enhanced special needs savings nomination

Cash Nomination - If you don't want to go down to CPF centre...

Follow these steps:

  1. Download the Cash Nomination Form
  2. Find 2 witnesses:
    • Must be >21 years old
    • Must not be you or your nominees
  3. Photocopy your + witnesses’ NRIC/passport
  4. Mail to
    • Central Provident Fund Board
      Robinson Road
      P.O. Box 3060
      Singapore 905060

Any mistakes must be counter-signed. If there are mistakes or form is incomplete, CPF might not accept. Troublesome…

I strongly suggest you make an appointment and do it at CPF centre.

It is very fast (<10mins) and you can clarify anything there.

(Don’t walk in, you most likely need to wait quite a while.)

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DO YOU KNOW
(For Cash Nomination)

If nominee is <18 years during payout, the money will be transferred to the Public Trustee till 18 years old.

Enhanced Nomination is suitable for nominees who...

have low Medisave balance OR not enough in the special/retirement account for retirement.

Some select this option because they are afraid that their nominees spend the cash away when they receive the payout.

(Note that for a nominee, cannot select both Special/Retirement account AND Medisave account)

Why Special Needs Savings Nomination

For special needs nominees, it might be a better option for them to get monthly payouts that can last them years, instead of lump sum payout.

Parents can decide the monthly payout amount.
Min monthly payout = $250
Min no. of years = 1 year

More details can be found on Special Needs Trust Co. website.

Restrictions + Examples of CPF Nomination

This is a typical example of a nomination:

Nominee Age Type of Nomination Share (%)
Mother 70 Enhanced (Retirement Account) 50%
Spouse 45 Cash 30%
Son 20 Cash
(will receive as cash)
10%
Daughter 15 Cash
(will be transferred to Public Trustee because <18 years)
10%

But you can’t do this:

Nominee Age Type of Nomination Share (%)
Spouse 45 50% Cash
50% Enhanced (Special Account)
100%

Get it?

Each nominee can only have 1 type of nomination.

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DO YOU KNOW

CPF OA/SA investments, DPS and property bought with CPF are not under CPF nomination.

But.. if the OA/SA investments or the CPF from property go back to CPF, will be under CPF nomination.

Conclusion

After reading, do you think it is important to get your CPF nomination done, if you haven’t done so?

Even if you have done it, do you want to make any changes? Do you want to add or remove a nominee?

If you are divorced, take note that the nomination still stands.

Also, get your family members to do it too!

Just head down to the nearest CPF centre now!

Have any questions?

Let me know what you think.

Do you think that CPF nomination is important? If you haven’t done it, will you do it?

You can leave a comment below or contact me. I promise I will reply you.

And if you think that this article is useful, share it with the people around you!

About Junhao J Tang
Junhao J is a financial consultant, a blogger and founder of rightpolicy.sg

Junhao J has been providing valuable advice – educating people on the importance of financially protecting oneself and saving up or investing for future needs.

Through rightpolicy.sg, he hopes to bring this message to all who stumble upon this blog.

Do you have hospital insurance? Read my latest article on Integrated Shield Plan: Why Medishield Life Coverage Is Not Enough

2 thoughts on “CPF Nomination: 3 Important Reasons Why You Must Do

  1. Very easy to digest. But one question. Why is there cash component for nomination? Can cpf money be taken out as cash?

    • By default, the nominees will receive the CPF money as cash.

      So if you go down to CPF centre and do a nomination, your CPF will be given out as cash to the beneficiaries (nominees)…

      unless you choose enhanced or special needs savings. Hope I answered your question!

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