Managing what matters most to you in your future...Leong Lick Tien Deputy Chief Executive Officer...

...Managing what matters most to you in your future

10 Chairman’s Message13 Mission, Vision and Values14 Board Members16 Core Management18 Organisation Chart20 50th Anniversary Celebrations23 Review of Operations35 Financial Statements80 Annexes

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CPF Board is a progressive agency that constantly keeps itselfcurrent to the needs of Singaporeans today….and in the future.

We have made it our mission to stay relevant to members’evolving needs so that you can take charge and planyour retirement needs early and achieve what mattersto you most……

What matters most to you?Having a roof over your head for shelter, reaping gainsfrom your investments, protecting yourself againstthe unexpected or living better and creating lastingvalues in your lives?

Whatever they may be, they do not just happenby chance. They must be carefully planned.

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Is that just the road ahead or...

2 / Central Provident Fund Board Annual Report 2005

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the blueprint to a brighter future?

Saving for Retirement ... / 3

Build up your CPF savings for retirementby transferring your Ordinary Accountsavings to your Special Account. Do themath: every $100 will double in 18 yearsin your Special Account instead of 28 yearsin your Ordinary Account.


Are you buying a space or...



planning a home?


If you’re using your CPF savings for housing,ensure that you have adequate savings foryour old age. Limit your monthly debtpayments, including mortgage instalment,to less than 35% of your income. You shouldaim to pay off your housing loan by age 55.Also, take note of the withdrawal limits onthe use of CPF for housing.


Are you enduring retirement or...



enjoying your release from work?


From age 62, you will receive monthlypayments from your CPF Minimum Sum tohelp meet your basic needs during retirement.In general, if you had set aside the MinimumSum fully in cash, your CPF monthlypayments should last you about 20 yearsuntil you reach 82.

If you can afford to postpone the monthlypayments to a later age instead of 62, youcan stretch your retirement income. For everyone year you postpone your payments, youcan extend them by two more years! So, ifyou delay your withdrawals to age 65, youcan extend your payment to age 89.



Over the years, the fundamental objective of the CPF in helpingSingaporeans save for a secure retirement has not changed.

If anything, this primary mission has become even more important.

The CPF Board’s main focus is still to ensure that the membershave sufficient money to use in their old age, to take care oftheir basic needs in life – like food, shelter and healthcare.

It is important for members to understand that their financialneeds during retirement depend very much on the lifestyle thatthey desire.

The CPF Board’s challenge therefore lies in getting membersto take early action and save for their retirement.


Chairman’s Message


Celebrating our 50th AnniversaryThe Board turned 50 last year. At our 50th

Anniversary Dinner, Prime Minister Lee HsienLoong outlined two key initiatives to further improvethe CPF system, namely to help CPF membersearn better long-term returns on their savings, andhelp them stretch their savings to ensure financialsecurity through their lives.

In conjunction with our 50th anniversary, weorganised an International Conference on SocialSecurity on “Building Successful DefinedContribution Systems in Uncertain Times”. TheConference was graced by the Minister forManpower, Dr Ng Eng Hen, and attended by morethan 300 policy-makers, social security experts andprofessionals from around the world. They sharedthe best practices of defined contribution systemsaround the world, and the trends and developmentsin the social security systems.

The Board launched our commemorativebook, Saving for Our Retirement. The book recordsthe historical milestones of CPF, and brings to lifethrough the personal testimonies of our membersthe many ways CPF has benefited Singaporeans.Many Singaporeans posted congratulatory messageson our 50th Anniversary Website. We are heartenedby the appreciation expressed by Singaporeans.

Ensuring Retirement AdequacyOver the last 50 years, the CPF system has

evolved from a simple compulsory savings planinto a comprehensive social savings scheme thatprovides for the retirement, healthcare and housingneeds of Singaporeans.

Today, the Board’s most pressing challengeis to help Singaporeans secure retirement adequacyas people live longer and families get smaller. Inthe next 50 years, it would be critical for retireesto have sufficient retirement savings of their ownand be more self-sufficient.

The Board has formed a CPF Advisory Panelcomprising local and foreign experts to advise onthe broad strategies to enhance CPF members’retirement adequacy, and ways to enhance thereturns on members’ investments. The Panel hadits first meeting in March 2006.

Changes to SchemesAs an immediate step to help members

enhance their returns, the Board fine-tunedthe admission criteria of funds under the CPFInvestment Scheme in February 2006. We arealso studying ways to aggregate members’ savingsand invest them in appropriate portfolios thatwould achieve better returns over the long term.


Saving for Retirement ... Chairman’s Message / 11

Koh Yong Guan, Chairman



The Board has stepped up its membereducation programme on the importance ofpersonal savings and making prudent use ofCPF savings. We will give emphasis in twoparticular areas.

The CPF Minimum Sum which is intendedto provide for the basic retirement needs ofmembers will be increased gradually to $120,000(in 2003 dollars) by 2013, to keep pace with inflationand rising life expectancy. Only 40% of active CPFmembers who turned 55 years old in 2005were able to meet the Minimum Sum, includingthe amount pledged from their property towardsthe Minimum Sum. Of these, only 20% were ableto meet the Minimum Sum fully in cash. We haveto help members recognise the importance ofsetting aside enough in the Minimum Sum. Oneimportant factor is that members should not over-commit in property, so as not to deplete theirretirement savings. Members need to balance theiraspirations of home ownership with that of theirretirement needs.

Members receive monthly payouts from theirMinimum Sum for 20 years starting at age 62.

However, with improving life expectancy, manymembers would outlive their Minimum Sumpayouts. Members can hedge against longevity riskby buying a life annuity with their Minimum Suminstead of taking the monthly payouts. However,fewer than 10% of members above age 55 currentlydo so. The Board will raise members’ awarenesson the benefits of life annuities, and is studyingwhether to make life annuities the default optionfor all members at retirement.

On the healthcare front, the Board has workedwith the Ministry of Health to successfully reformMediShield and MediShield Plus. From 1 July 2005,MediShield forms the basic tier of catastrophicmedical cover at the Class B2/C level. It is providedsolely by the Board for members and theirdependants. Private insurers can offer enhancementplans with MediShield as an Integrated Plan. InOctober 2005, MediShield Plus was privatised andrestructured as a Medisave-approved PrivateIntegrated Plan. From January 2006, the age limitfor MediShield cover was raised to 85 so that olderpeople can continue to enjoy medical insurance.

AppreciationOn behalf of the staff and the Board, I would

like to express our deep appreciation to Mr MosesLee for his outstanding contributions and leadershipas the Board’s Chairman for the last 3 years.

We also wish to thank Mr Goh Wee Liam andMs Amy Hing who have retired from the Boardfor their contributions and services. We welcomeMr Ravi Menon, Dr Ng Boon Hoo and Ms ChamHui Fong to the Board.

I would like to express the Board’s appreciationto Mr Willie Tan who was the Board’s CEO from2002 to 2005.

Moving ForwardCPF will continue to evolve with the changing

times so that it can continue to serve members’needs. I am confident that with the foundationwhich we have laid in the last 50 years, and thededication and contribution of all staff, we will beready to take on the challenges that will come ourway in the next 50 years.

koh yong guan

chairman

central provident fund board


5 AREAS OF EXCELLENCE

Benefits Customers Processes People Finance

Saving for Retirement ... Mission, Vision and Values / 13

MISSIONTo enable Singaporeans to save for a secure retirement.

VISIONA world-class social security organisation providing thebest national savings scheme for Singaporeans to enjoya secure retirement.

VALUES

TAKE CHARGE,CHANGE ANDINNOVATE

FOCUS ONCUSTOMERS

Delighted Customers Excellent Processes Excellent People

Sound Finance

ComprehensiveCPF Benefits

DO MY BEST

PRACTISELIFE-LONGLEARNING



Koh Yong GuanChairman

Goh Kim LeongDeputy Chairman

Ms Wu Choy PengGovernment Representative

Mrs Ow Foong PhengGovernment Representative

Alfred Lien Kim SengEmployer Representative

Dr Ng Boon HooEmployer Representative

Board Members

from left

Board members who completed their terms during the year:

Moses LeeChairman1 January 2002 – 30 June 2005

Goh Wee LiamEmployee Representative1 August 2001 – 22 September 2005

Ms Amy HingOthers1 July 2002 – 30 June 2005


Saving for Retirement ... Board Members / 15

Quah Wee GheeOthers

Law Song KengOthers

Ong Chong TeeOthers

Regi Wong Shaw SengEmployee Representative

Ravi MenonOthers

Ms Cham Hui FongEmployee Representative



Liew Heng SanChief Executive Officer

Wu Wai MunDeputy Chief Executive Officer(Collections & CorporateInfrastructure Group)

Don YeoDirector(Strategy & Human Resource)

Leong Lick TienDeputy Chief Executive Officer(Services Group)

Soh Chin HengDirector(Policy and Planning)

Core Management

from left

Derrick WanDirector(Strategy Development)

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Saving for Retirement ... Core Management / 17

Lim Boon ChyeDirector(Corporate Affairs)

Ng Hock KeongDirector(Customer Relations)

Goh Teck SoonDirector(Infocomm Technology Services)

Teoh See LeongDirector(Collections and Recovery)

Lo Tak WahDirector(Retirement and Investment)

Chang Long KiatDirector(Housing and Healthcare)

Tan Swee HuaChief Information Officer


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C M Y CM MY CY CMY K


Organisation Chart of CPF Board(As at 1 March 2006)

ChairmanKoh Yong Guan

Chief Executive OfficerLiew Heng San

Deputy Chief Executive OfficerServices GroupLeong Lick Tien

Deputy Chief Executive OfficerCollections & Corporate Infrastructure GroupWu Wai Mun

HOUSING & HEALTHCARE DIVISION

DirectorChang Long Kiat

Deputy Director (Housing Schemes)Tan Chui Leng

Deputy Director (Insurance Schemes)Hsu Wei Ching

Deputy Director (HealthCare Schemes)Tey Chee Keong

CUSTOMER RELATIONS DIVISION

DirectorNg Hock Keong

Deputy Director (Member Education)Fiona Chan Oi Lai

Deputy Director (Customer Service)Sally Koh Lee Huan

CORPORATE AFFAIRS DIVISION

DirectorLim Boon Chye

Principal Legal OfficerNaina Dharamdas Parwani

Deputy Director (Property)Vacant

Deputy Director (Corporate Services)Laura Lim Quee Eng

Deputy Director (Public Affairs)Jonas Kor Gee Cheong

RISK MANAGEMENT DEPARTMENT

Deputy Director (Risk Management)Chua Hwee Leng

COLLECTIONS & RECOVERY DIVISION

DirectorTeoh See Leong

Deputy Director (Collections)Albert Yeo Leong Hai

Deputy Director (Recovery)Ngiam Su Ying

Deputy Director (Investigation & Foreign Worker Levy)Choo Eng Seng

Assistant Director (Collections Records)Betty Ong Siow Cheng

Deputy Director (Agency Projects)Lim Lin

RETIREMENT & INVESTMENT DIVISION

DirectorLo Tak Wah

Deputy Director (Retirement Schemes)Belinda Teoh Chun Yean

Deputy Director (Withdrawal Schemes)Tan Mui Leng

Deputy Director (Investment Schemes)Margaret Lim Yuen Bin

Deputy Director (Member Accounts & Records)Ramlah Moiz Tyebally


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Saving for Retirement ... Organisation Chart / 19

Policy Group

INTERNAL AUDIT DIVISION

Deputy Director (Internal Audit)Lai How Fatt

FINANCE DIVISION

Deputy Director (Finance & Accounts)Alvin Wong Mun Fei

Assistant Director (Fund Management)Eileen Tay Kok Hua

INFOCOMM TECHNOLOGY SERVICES DIVISION

Chief Information OfficerTan Swee Hua

Director (ITS) [IT-Revamp]Goh Teck Soon

Senior Deputy Director (Retirement, Insurance & Scheme Systems)Alice Chay Jiak Phay

Deputy Director (Scheme Systems)Pauline Lim

Deputy Director (Collections & Corporate Systems)Dr Lee Nyen Kong

Deputy Director (Data Centre & Resource Management)Ng Tze Leong

Deputy Director (Database & Information Services)Ang Moy Gek

Principal IT Consultant (Quality & Security Administration)Cedric Teo Hwee Beng

POLICY & PLANNING DIVISION

DirectorSoh Chin Heng

Deputy Director (Policy & Research)Linda Marie Chan Joo Kim

Deputy Director (Corporate Planning)Sally Seah Cheng Lang

Deputy Director (Management Information)Chan Yoke Fong

STRATEGY & HUMAN RESOURCE DIVISION

DirectorDon Yeo Yong Kiang

Director (Strategy Development)Derrick Wan Yew Meng

Deputy Director (Human Resource)Ginny Chua Geok Hong


07 50 Year Annivesary FAC 7/3/06 12:22 PM Page 1

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50 years is a long time in a man’s life. To reach 50and still be able to grow from strength to strength,culminating in the attainment of the SingaporeQuality Award (SQA) in 2004, as well as the TopPublic Service Award last year, the highest accoladesfor organisational excellence, is no mean feat.

The Central Provident Fund Board started humblyin 1955, to help Singaporeans save for a secureretirement. Over the last five decades, the CPF hasevolved into a comprehensive social security savingsplan with numerous schemes to cater to the threekey objectives of retirement, healthcare andhousing. Yet, throughout its evolution, the Boardhas remained true to its founding principle, whichis to ensure that every Singaporean enjoys financialindependence in old age.

Today, Singaporeans turn to the CPF to workthrough the possibilities before making theirdecision on buying a home, meeting theirhealthcare needs or planning their finances.

Singaporeans have also come to expect promptand efficient service from the CPF. We will remaincommitted to service excellence and continue toinnovate and harness technology to deliver betterservices to meet the higher expectations and diverseneeds of our members.

“The CPF is today one of thebest systems of retirementsavings in the world.However, we must not stopto update and refine it, inorder to adapt it to changingneeds and circumstances.”Prime Minister Lee Hsien Loong

Congratulatory Message to CPF Board

50th Anniversary Celebrations

50th Anniversary CelebrationsLooking back – 50 years of CPF



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Saving for Retirement ... 50th Anniversary Celebrations / 21

Saving for our Retirement

On our 50th Anniversary, the Board had the honour of having the PrimeMinister Lee Hsien Loong’s video message online on our 50th AnniversaryWebpage. Besides PM’s message, congratulatory messages from Ministerfor Manpower, Dr Ng Eng Hen, and CPFB’s immediate past Chairman,Mr Moses Lee, were also posted online.

The 50th Anniversary Webpage also documented the Board’s corporate history,significant achievements in the last five decades, and interesting trivia factsand figures. The Board also engaged the public in its celebration activities byposting their congratulatory messages to us online.

Concurrently, the Board launched the 50th Anniversary Celebration logo. Thenumeric symbol “50” in the logo underscores the Board’s long-standingcommitment in helping our members save for their retirement. Its boldstroke suggests qualities of spontaneity and creativity. It also demonstratesour confidence in the many collaborative relationships we have forged withour stakeholders through the years.

The colour scheme, crimson yellow and green, creates a contemporary,refreshing appeal with a touch of warmth. Crimson yellow represents 50golden years of strength and illumination. Our corporate colour green signifiesconstant growth and dynamism.

Building Successful Defined Contribution Systems inUncertain Times

In conjunction with the 50th anniversary celebrations, the Board alsosuccessfully organised an International Conference on Social Security (ICSS)on 14 – 15 July at the Grand Copthorne Waterfront Hotel. Guest of Honourwas Minister for Manpower, Dr Ng Eng Hen.

The two-day conference, attended by more than 300 participants from over25 countries, was specially designed for senior government officials, policymakers, academics, researchers and professionals with an interest in buildingand reforming defined contribution (DC) systems and pension schemes ingeneral. The conference was well received by participants as they had theopportunity to learn from practitioners and academics/researchers at theinteractive dialogue sessions.



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The theme for the seminar was Building Successful Defined ContributionSystems in Uncertain Times and the topics covered during theconference included:

• Ageing Population and Retirement Security Challenges• Challenges Posed by a Changing Labour Market• Can DC System Reforms Rise to the Needs of Vulnerable Groups?• Can Family and DC Systems Co-exist?• International Experiences in Pension Privatisation• Issues and Prospect for Non-financial DC Schemes• Building Sound Investment and Governance Structures• The Practitioners’ Perspectives: Case Studies from Australia, Chile,

New Zealand and Singapore

Commemorative Book

At the ICSS, Minister for Manpower, Dr Ng Eng Hen launched the Board’s50th Anniversary Commemorative Book, Saving for our Retirement, publishedin conjunction with our Golden Anniversary.

The book records the historical milestones of CPF, and brings to lifethrough the personal testimonies of our members the many waysCPF has benefited Singaporeans.

A Touch of Gold

A Touch of Gold – the CPF Board’s 50th Anniversary Celebration Dinner &Dance – held at Suntec Ballrooms on 25 September, rounded up the Board’s50th Anniversary celebrations with a memorable evening.

PM Lee was the Guest of Honour, together with Mrs Lee. The night sawthe reunion of the Board’s past Chairmen and CEOs, including our oldestsurviving Chairman, Mr Lim Joo Hock, who was delighted to be invited tocommemorate the event.


Membership In 2005, CPF membership rose by 1% to

3,048,552 as at 31 December 2005. Of these,1,381,068 were active members.

Members’ BalanceTotal members’ balance grew by 7%, from

$111,873.8 million in 2004 to $119,787.5 millionin 2005.

Review of Operations

Saving for Retirement ... Review of Operations / 23

CPF Contribution RatesEmployees who earn more than $500 per month

need to contribute to their CPF accounts. Foremployers, CPF contributions are payable foremployees whose wages exceed $50 a month.The maximum monthly contribution payable forall age groups in 2005 is based on a salary ceilingof $5,000 a month.

Members’ AccountsA CPF member has three accounts with the

Board – Ordinary, Special and Medisave Accounts.At 55, he has another account, the RetirementAccount, and has to set aside his Minimum Sumin it.

The allocation of CPF contributions to members’accounts is as follows.

Allocation of CPF Contributions from1 January to 31 December 2005

Age Ordinary Special Medisave Total

Group Account Account Account

(%) (%) (%) (%)

35 years 22 5 6 33

& below

Above 35 20 6 7 33

– 45 years

Above 45 18 7 8 33

– 50 years

Above 50 15 7 8 30

– 55 years

Above 55 10.5 - 8 18.5

– 60 years

Above 60 2.5 - 8.5 11

– 65 years

Above - - 8.5 8.5

65 years

Contributions amounting to $16,105.1 millionwere collected and credited into members’ accountsduring the year. Withdrawals from members’balance totalled $11,776.1 million in 2005,compared to $10,310.3 million in the previous year.

Membership as at 31 December05

04

03

02

01

3,048,552

3,018,014

2,978,493

2,963,1602,922,673

Members’ Balance as at 31 December05

04

03

02

01

$119,787.5m

$111,873.8m

$103,539.6m

$96,422.6m

$92,221.2m

Annual Withdrawals*05

04

03

02

01

$11,776.1m

$10,310.3m

$11,816.5m

$14,821.4m$18,860.4m

* Include withdrawals under Section 15 & CPF schemes

Contributions Received05

04

03

02

01

$16,105.1m

$15,320.1m

$15,870.0m

$16,165.7m

$18,322.3m

Interest Earned by MembersCPF members earn a market-related interest rate

on their CPF savings, subject to a minimum rate of2.5% per annum as stipulated in the CPF Act. Fundsin the Medisave, Special and Retirement Accountsearn additional 1.5% percentage points above theprevailing Ordinary Account interest rate.

The interest rate is calculated based on aweightage of 80% on the 12-month fixed depositrates and 20% on the savings rates of the majorlocal banks. It is reviewed quarterly to keep upwith prevailing market interest rates. In 2005, theinterest rates remained at 2.5% per annum for theOrdinary Account and 4% per annum for theMedisave, Special and Retirement Accounts andtotal interest credited into members’ accountsamounted to $3,675.4 million.

RETIREMENTWithdrawal at Age 55

When members reach age 55, they maywithdraw their CPF in the Ordinary and SpecialAccounts after setting aside the Minimum Sum.Members who have set aside their Minimum Sumfully will need to set aside the Medisave RequiredAmount ($5,100 for year 2005) when they makea CPF withdrawal. Members who have more thanthe Medisave Minimum Sum can withdraw theexcess amount in their Medisave Account. Thosewho continue to work and contribute to CPF maywithdraw their CPF annually on their birthday orafter they have stopped working for six months.In 2005, $1,837.7 million was withdrawn. Thisis 6.6% more than $1,723.2 million withdrawnin 2004.

Minimum Sum SchemeThe Minimum Sum Scheme helps members

set aside sufficient savings to support a modeststandard of living during retirement. Memberswho turn 55 between 1 July 2005 and 30 June 2006are required to set aside a Minimum Sum of

$90,000. Of this, at least $45,000 must be incash while the remaining $45,000 can be pledgedwith a property. Members are encouraged tobuy approved life annuities with their MinimumSum to give them a guaranteed income for life.Alternatively, they may deposit their savings withapproved banks or continue to keep it with theCPF Board.

In 2005, 57,754 members were brought intothe Minimum Sum Scheme. Of these, 3,118 boughtannuities, 24,163 pledged their properties and13,940 left their Minimum Sum either with thebanks or the Board. The remaining 16,533 weremembers who had no Minimum Sum to set asideas they had small balances, and those who wereexempted from the scheme because they wereterminally ill, had passed away, had their ownannuities, had left the country permanently or werepensioners in receipt of a monthly pension.

Topping-Up of the Minimum SumThe topping-up of the Minimum Sum gives

individuals the opportunity to top up their own,their spouses’ and their parents’ RetirementAccounts. Accounts can be topped up with cashor transfers of CPF savings. Individuals can alsotop up their grandparents’ accounts using cash.

In 2005, 6,550 individuals made cash and CPFtop-ups amounting to $59.97 million.

Withdrawals upon Death, PermanentDisability and other Grounds

Upon a member’s death, his savings will bepaid to his nominated beneficiaries. If nonomination was made, the savings will be handedto the Public Trustee for distribution according tothe law. Members who become permanentlydisabled can apply to withdraw their CPF savingsat any time. During the year, $267.1 million waswithdrawn on these grounds. Members who leftSingapore and West Malaysia permanentlywithdrew $335.5 million.



Transfer of Ordinary Account Savings toSpecial Account

CPF members who are below age 55 and wantto put aside more cash for old age can transfertheir CPF savings from the Ordinary Accountto top up the Special Account to $90,000, whichis the prevailing Minimum Sum amount. Thetransfer is irreversible. With the transfer, CPFmembers will enjoy a higher interest rate paidon their CPF savings in the Special Account, whichis currently 4%. In 2005, 20,798 CPF memberstransferred $234.80 million to their Special Accountfor their retirement.

Retirement PlanningThe Board stepped up its education efforts on

getting members to plan early and save for theirretirement. More tools and life events were addedto my cpf at www.cpf.gov.sg. my cpf comprises acomprehensive range of online tools and servicesas well as CPF information to help members makeinformed financial decisions at major life stages.

Two new life events, Living Overseas andManaging Your Retirement, were added to my cpf,bringing the total number of life events to 12. TheBoard also launched a monopoly-style online boardgame called Voyage of Life that aims to educate theyounger audience important financial planningconcepts and CPF matters in a fun manner.

The Board reached out to more than 50,000Singaporeans staying in the heartlands throughits second my cpf me roadshow at the HDB Hub.Another 2,000 participants attended the varioustalks and seminars on retirement planningconducted in both English and Mandarin. Thesehave proven popular with the public, who foundsuch events helpful in their retirement planning.

To help members save for their retirement, theBoard also developed simple messages focusingon easy steps that members can take to grow theirretirement savings. For example, memberswere encouraged to transfer savings from their

Ordinary Account to their Special Accountto earn higher interest, and to defer theirMinimum Sum withdrawal at age 62 tolengthen the monthly payouts. Calculatorssupporting these messages were also added tothe website to enable members to compute thebenefits of taking these simple steps.

Going forward, the Board will continue toengage various media to educate CPF memberson managing their CPF savings prudently. Wewill also organise more programmes to equipmembers with the knowledge and skills to carryout retirement planning.

HEALTHCAREMedisave, MediShield and MediShield Plus

help CPF members and their dependants payfor hospitalisation expenses. Prudent use ofsavings in the Medisave Account, coupled witha catastrophic illness insurance scheme suchas MediShield, and complemented by theGovernment’s Medifund will go a long waytowards meeting members’ healthcare needs.

MedisaveFrom 1 July 2005, members are required to

maintain up to $32,500 in their Medisave Account.Those who withdraw their CPF savings at age 55need to set aside the Medisave Minimum Sumof $27,500 or the actual Medisave balance,whichever is lower, in their Medisave Accountto meet healthcare needs during retirement.

Members who are government pensionersunder the Fixed Amount on Ward Charges scheme(FAW) are not required to maintain any savingsin the Medisave Account whereas governmentpensioners under the Co-Payment on WardCharges scheme (CPW) are required to maintainup to $16,250 in their Medisave Account. Theyhave to set aside $13,750 (half the MedisaveMinimum Sum) in their Medisave Account whenthey withdraw their CPF savings at age 55. The


Medisave Required Amount is $2,550.Annual Medisave withdrawals for medical

expenses increased from $367.2 million in 2004to $397.7 million in 2005. The number of suchwithdrawals increased by 5.4% to 574,132.

Annual Withdrawals under Medisave Schemefor Approved Medical Expenses

05

04

03

02

01

$397.7m

$367.2m

$328.4m

$361.0m

$371.9m

Note: The figures exclude Medisave withdrawals for payment ofpremiums under the Private Medical Insurance Scheme (PMIS),ElderShield Scheme and MediShield Scheme.

Medisave for the Self-EmployedSelf-employed persons below 35 years old

are required to contribute 6% of their annualnet trade income into their Medisave Account.Those who are 35 to below 45 years old have tocontribute 7%, and those who are 45 years oldand above have to contribute 8%.

Self-employed persons who have not previouslybeen issued with a Notice of Assessment/Non-taxAdvice by the Inland Revenue Authority ofSingapore (IRAS) contribute based on a presumedannual net income of $9,000. For 2005, self-employed persons contributed a total of $332.44million to CPF comprising $252.91 million asMedisave contributions and the rest as voluntarycontributions to their Ordinary and SpecialAccounts. These voluntary contributions will helpself-employed persons save for their old age andhousing needs.

Percentage of Employees* Who Havethe Medisave Minimum Sum at Age 55

05

04

03

02

01

58.8%

57.5%

54.6%

54.7%

55.2%

*Excludes pensioners and self-employed

Average Balance in the Medisave Accountsof Employees* at Age 55

05

04

03

02

01

$23,267

$22,292

$20,512

$18,983

$17,842

*Excludes pensioners and self-employed

MediShield and MediShield PlusMediShield, a low cost national catastrophic

illness insurance scheme, provides members andtheir dependants with financial protection againsthigh medical expenses arising from prolonged orserious illnesses. Premiums for MediShield andMediShield Plus can be paid from the MedisaveAccount, subject to a maximum payment of $660per insured person per policy year.

From 1 July 2005, MediShield has beenreformed to form the basic tier of catastrophicmedical insurance for members and theirdependants at the Class B2/C level. Memberswho wish to have higher insurance can buyenhancement plans from private insurers. Theinsurers have integrated their enhancement planswith MediShield as Integrated Plans and act as asingle point of contact to collect premiums andprocess claims.

Under the reformed MediShield, members willenjoy higher claim benefits and lower co-insurancefor large hospital bills, thus reducing the cashamount that the members need to pay. The annualclaim limit and lifetime claim limit have also beenincreased from $30,000 and $120,000 to $50,000and $200,000 respectively.

The annual premiums for the reformedMediShield are between $30 and $510, dependingon the insured’s age. Those who have beeninsured continuously since age 60 or earlier willenjoy a discount on their premiums from ages71 to 80. Depending on how long a person remainsinsured and the type of plan he is under, he will

enjoy yearly premium discounts ranging from$33.50 to $204.00.

As at 31 December 2005, 1,955,392 CPFmembers and dependants were covered underMediShield. During the year, $91.5 million wasapproved to meet 114,342 claims.

As part of the reform, MediShield Plus Plan Aand Plan B have been restructured as IntegratedPlans, privatised, and are managed by NTUCINCOME since 1 October 2005. The MediShieldPlus Plan A and Plan B have been renamedIncomeShield Plan MA and Plan MB respectively.The benefits and premiums have also been revised.330,000 MediShield Plus members now enjoybetter benefits and lower premiums.

HOME OWNERSHIPCPF members are able to own homes with

the help of the Public Housing Scheme andResidential Properties Scheme.

Public Housing SchemeThe Public Housing Scheme allows members

to use their CPF savings to buy HDB flats and topay their housing instalments. During the year,$5,733.9 million was withdrawn by 639,915members to pay for their HDB flats and to servicetheir HDB housing loans. Since January 2003,members were allowed to obtain loans from banksto purchase HDB flats. In the year 2005, 89,599members used $1,541.9 million of their CPF toservice the bank loans or to buy HDB flats financedwith bank loans.

From 1 January 2005, the CPF Withdrawal Limitfor members using CPF to service their bank loanshas been reduced to 138% of the Valuation Limit(VL). Members are able to withdraw further CPFbeyond 100% of the VL up to 138% of the VL ifthey are able to set aside the prevailing MinimumSum cash component. The CPF Withdrawal Limitwill be reduced to 132% for those who buy their

flats using bank loans or refinance from HDB loanto bank loan with effect from 1 January 2006. Itwill be further reduced by six percentage pointseach year until it reaches 120% in 2008.

Residential Properties SchemeUnder the Residential Properties Scheme,

members can use their CPF savings to buy privateresidential properties and executive condominiums,and to pay their housing loan instalments. TheCPF Withdrawal Limit for new purchases orhousing loans refinanced on or after 1 January2005 was 138% of the VL. Members are able towithdraw further CPF beyond 100% of the VL upto 138% of the VL if they are able to set aside theprevailing Minimum Sum cash component. Thislimit will be reduced by six percentage points eachyear until it reaches 120% in 2008.

The number of applications increased by 25.3%to 12,294 in 2005. Implementation of new housingpolicies for non-related singles and properties withremaining lease of at least 30 years boosted theprivate residential market. Moreover, buyers canuse CPF savings for the second 5% downpaymentwhich makes it easier for members to buy a privateproperty as the cash outlay is reduced. A grossamount of $3,864.3 million was withdrawn underthe scheme. This is an increase of 19.1% over2004’s figure.

Use of Special Account Savings forHousing Instalments

Arising from the cut in the CPF contributionrate to the Ordinary Account (OA) from October2003, members whose housing loans were affectedwere allowed to make up for the shortfall by usingtheir Special Account (SA) to service their housingloans. Members who were also affected by theearlier 1999 cut in CPF contribution rate wereallowed a higher SA withdrawal limit. As at 31December 2005, 201,877 members had used $370


million from SA savings to pay for their housingloan instalments.

Annual Withdrawal (Gross) under PublicHousing Scheme

05

04

03

02

01

$7,275.8m

$6,792.1m

$6,849.5m

$8,219.5m

$8,330.7m

Annual Withdrawal (Gross) under ResidentialProperties Scheme

05

04

03

02

01

$3,864.3m

$3,246.0m

$3,069.3m

$3,693.8m

$3,676.5m


Percentage of Employees Aged 21 And Above(Singapore NRIC Holders) Who Currently OwnPublic Housing Properties Bought with CPFSavings as at 31 December

05

04

03

02

01

95.1%

95.0%

94.9%

94.5 %

95.0%

Percentage of Employees Aged 21 And Above(Singapore NRIC Holders) Who Currently OwnResidential Properties (Public/Private) Bought withCPF Savings as at 31 December

05

04

03

02

01

68.8%

69.4%

70.0%

70.0 %

67.9%

New Initiatives in 2005From April 2005, members who sold their first

property within a year of the property purchase,no longer need to observe a one year waiting periodto reuse the refunded CPF savings to buy the nextproperty. This can help members to downgrade ormonetise their properties quickly if they sufferfinancial hardship. As a result of the change, 22members were able to use their CPF immediatelyfrom the sale of their property to buy a new property.

From 15 June 2005, members who areundischarged bankrupts can continue to usetheir CPF to service their housing loans if theCPF charge on the property is created before theirbankruptcy. With this change, undischargedbankrupt members can continue to own theirhomes and will not be forced to sell their properties.The CPF released towards the property are alsosecured for old age. As at 31 December 2005,76 members who were declared bankruptshave continued to use their CPF to service theirhousing loans.

Members can use their CPF savings to buyresidential properties with remaining leases of atleast 60 years. However, from 19 July 2005, theycan also buy residential properties with remainingleases of 30 to 59 years, provided the remaininglease at the time of application is able to cover themember up to the age of 80 years. These propertieswill have lower CPF Withdrawal Limits based onthe residual value of the property at the member’sCPF withdrawal age of 55 years old. Lowering theminimum lease period gives older members theflexibility of buying cheaper residential propertiesand to hold more cash for their retirement. As at31 December 2005, we have approved fourapplications for use of CPF for properties withremaining leases less than 60 years.

All non-related singles (unmarried, divorced orwidowed) of any age can use their CPF to jointlybuy their sole residential property from 19 July2005. This is in line with our objective to facilitate

home ownership and gives singles more housingoptions. As at 31 December 2005, we have approved321 applications from non-related singles wantingto use their CPF to buy private properties.

From 19 July 2005, the Available HousingWithdrawal Limit (AHWL) was also simplified.This makes it easier for members to understandthe AHWL. The simplified AHWL is definedas the available OA balance after setting asidethe prevailing Minimum Sum cash component.Savings in the OA and SA including amountsreleased from the SA for investments, are used tomeet the requirement for the MS cash component.

FAMILY PROTECTIONDependants’ Protection Scheme

The Dependants’ Protection Scheme (DPS) isa term insurance that provides members and theirfamilies with financial help should the insuredmember become permanently incapacitated, ordie before age 60.

DPS was privatised on 17 September 2005. TheGreat Eastern Life Assurance Company Limitedand NTUC INCOME Insurance Co-operativeLimited were appointed to take over the runningof the scheme. The following changes were madeto DPS benefits after privatisation:

• Higher sum assured. The sum assured wasincreased from $44,000 to $46,000 withoutany increase in premium.

• Lower premiums for the older age group. The annual premium for members aged 55and above was reduced from $360 to $260.

With the privatisation, the Board will distributesurplus funds from its DPS to all insured membersin the form of additional DPS insurance.


Home Protection SchemeThe Home Protection Scheme (HPS) is a

compulsory mortgage-reducing insurance scheme.It protects the families of members who are usingCPF savings to service their housing loans forHDB flats. Members can use their CPF savings topay the insurance premiums and are covered forthe period of the housing loan or until they reachthe maximum cover age, whichever is earlier. If amember becomes permanently incapacitated fromever continuing in any employment or dies, theBoard will pay off his outstanding housing loan.

At the end of 2005, 674,846 persons werecovered for a total assured sum of $81,976.5 million.This represented a 0.48% decrease in membershipand a 2.44% increase in the assured sumover 2004. There were 1,254 claims totaling$100.5 million in 2005. This comprised 847claims for death cases and 407 for permanentincapacity cases.

Percentage of Eligible Members Covered under DPS05

04

03

02

01

89.6%

89.6%

89.2%

89.3%88.4%

As at 31 December 2005, 1,676,038 memberswere covered under the scheme, compared to1,627,356 in 2004. The percentage of eligiblemembers covered under DPS is 89.6%. The totalsum assured also increased from $74,943.1 millionin 2004 to $80,522.4 million in 2005.

During the year, a total of 3,286 claims wereapproved. Of these, 2,230 were for death cases and1,056 for permanent incapacity cases. The totalclaim amount approved was $147.7 millioncompared to $ 127.6 million for 2,765 claimsin 2004.

ASSET ENHANCEMENTMembers who wish to manage and enhance

their CPF savings for their old age can do so throughthe CPF Investment Scheme (CPFIS). The schemeprovides CPF members with more choices ininvesting their savings while maintaining thelonger-term objective of ensuring their financialsecurity in old age.

CPF INVESTMENT SCHEMEUnder the CPFIS, members can invest their

Ordinary Account (OA) and Special Account (SA)savings. They are to take individual responsibilityfor their old-age security while accepting the risksand trade-offs in their investment decisions.

Members should exercise prudence and diversifytheir investments to better spread their risk.Members may invest up to the full balance in theirOrdinary and Special Accounts in professionally-managed products such as fixed deposits,endowment and investment-linked insurancepolicies, annuities, unit trusts and SingaporeGovernment bonds. Members can also investthe full balance in their OA savings in fundmanagement accounts.

Under CPFIS-Ordinary Account (CPFIS-OA),members can invest up to 35% of investible savingsin shares, corporate bonds and property funds,

Cumulative Number of Members Covered underHPS as at 31 December

05

04

03

02

01

674,846

678,133

678,657

676,502

661,404

while 10% can be invested in gold. Investiblesavings is defined as the OA balance plus netamounts withdrawn for education and investments.

As at 31 December 2005, 769,781 membershad invested a total amount of $24,431.9 millionof their CPF savings under the CPFIS-OA and447,857 members had invested $4,988.1 millionof their CPF savings under the CPFIS-SA.

NON-RESIDENTIALPROPERTIES SCHEMEThe Non-Residential Properties Scheme enablesmembers to enhance their CPF savings by investingthem in non-residential properties. In 2005, a grossamount of $56.1 million was withdrawn under thescheme, an increase of 3.5% from 2004.

EDUCATION SCHEMEThe Education Scheme is a loan scheme to help

CPF members finance their children’s or their owntertiary education. The scheme covers all full-timeundergraduate courses at the National Universityof Singapore, Nanyang Technological Universityand Singapore Management University, and allfull-time diploma courses at LaSalle-SIA Collegeof the Arts, Nanyang Academy of Fine Arts,Nanyang Polytechnic, Ngee Ann Polytechnic,Singapore Polytechnic, Temasek Polytechnicand Republic Polytechnic.

During the year, 15,179 applications wereprocessed under the scheme, an increase of 16%from 2004. The gross amount withdrawn (fortuition and administrative fees) increased from$95.3 million in 2004 to $109.9 million in 2005.The total amount repaid also increased from$47.5 million in 2004 to $52.2 million in 2005.

MEMBERSHIP PRIVILEGESDiscounted SingTel Shares

To make Singapore a share-owning society andgive Singaporeans a greater stake in the country,


Sum Assured under HPS as at 31 December05

04

03

02

01

$81,976.5m

$80,023.5m

$76,998.0m

74,378.5m

$71,293.3m


Singaporean CPF members were able to buydiscounted SingTel shares in 1993 (ST A shares)and 1996 (ST2 shares). SingTel declared a finaldividend of 8.0 cents and a special dividend of5.0 cents a share for its financial year ended31 March 2005. In September 2005, the finaland special dividends totaling $160.3 millionwere credited to 1.0 million SingTel shareholders’CPF Ordinary Account.

Top-Up to Special/Retirement Account (RTS)

The Top-Up to Special/Retirement Accountgiven by the Government, is meant to helpSingaporeans aged 50 years and above on 1 January2005, save more for their retirement. On 25 June2005, the Board credited $100 into theRetirement/Special accounts of each qualifyingSingaporean. The total Top-Ups by the Governmentamounted to $78,595,100.

Top-Up to Medisave Account (MTS)The Top-Up to Medisave Account was

introduced to help Singaporeans adjust to thechange in MediShield premiums in July 2005.Singaporeans aged 21 and above on 1 January 2005received a top-up into their CPF Medisave Accountaccording to the table below:

Age on 1 jan 2005 21-39 40-49 50-59 60 and

above

Top-Up Amount $50 $100 $250 $350

The total Top-Ups by the Government amountedto $331,068,550.

CPF SERVICESCPF Website (www.cpf.gov.sg)

In 2005, the Board introduced more e-serviceson the CPF website, for example, the WithdrawalAdvice and Self-Employed Medisave Liabilities& Payment History Statement in my cpfOnline Services.

In 2005, the CPF website received over 13million hits. The number of transactions madewas more than 23 million, an increase of 77% overthe 13 million transactions in 2004.

Electronic Services for EmployersEmployers can conveniently submit their CPF

contribution details electronically using the e-Submission service on the CPF website, simply bystating the contribution details in the online formor using a file transfer. To use the e-Submissionservice, an employer needs a SingPass and a GIROfacility. The service is available 24 hours, 7 daysa week.

mPALThe Mobile Personal Auto-Link mPAL –

Employer Submission allows employers with 10or fewer employees to submit their CPFcontributions via a GPRS (General Packet RadioService) mobile phone.

In 2005, mPAL was extended to CPF members.mPAL – my cpf offers members access to theirpersonal account balances, contribution historyup to 15 months, property statements and MyMessages. The new service is well received by CPFmembers. We processed over 6,000 transactionsunder mPAL – my cpf over a period of threemonths in the last quarter of 2005.

CPF Biometric e-CountersFor members who cannot remember their

SingPass, a new service channel – CPF Biometrice-Counter, was introduced at all CPF ServiceCentres. All the members need are their NRICand thumbprint for authentication in order to usethis new service channel.

The Board is the first public agency in Singaporeto use biometric technology to serve its customerswithout having to pre-register and store anythumbprint images.

CPF Services on AXS StationsIn 2005, CPF services were also extended to

AXS Stations. Members can access their accountbalances from these island-wide stations usingtheir CPF Phone PIN. Employers with 10employees or less can also submit and pay monthlyCPF contributions using these machines.

Call CentreIn 2005, the Board’s Call Centre received about

1.38 million calls from both members andemployers. Over 250,000 calls pertained to nationalprojects that the Board was handling, such as theNew Singapore Shares, Economic RestructuringShares, MediShield Reform and Top-up to Medisaveand Retirement Accounts.

Service FeedbackThe Board conducts annual surveys to gather

members’ and employers’ feedback on the Board’scounter, telephone and other services. In 2005,survey results revealed that 98.5% of membersand 98.9% of employers were either very satisfiedor satisfied with our overall services.

The Board also received 56,000 feedback formsunder the “Share Your Views with Us” Programme.About 96.0% of the customers rated the Board’sservices as excellent. 58,000 compliments werereceived from our customers, service partners andthe public.

Agency Services The Board provides agency services to the

Government and other organisations. It is thecollecting agent for Foreign Worker Levy (FWL),Skills Development Levy (SDL) and CommunityChest’s Social Help and Assistance Raised byEmployees (SHARE) donations. It also collectscontributions made to the Chinese DevelopmentAssistance Council (CDAC) Fund, EurasianCommunity Fund (ECF), Mosque Building andMENDAKI Fund (MBMF) and Singapore IndianDevelopment Association (SINDA) Fund.

The Board also conducts the annualOccupational Wages Survey for the Ministryof Manpower and administers the EdusavePupils Fund and Government-Paid MaternityLeave claims for the Ministry of Educationand the Ministry of Community Development,Youth and Sports respectively.

Collection of CPF ContributionAs at end 2005, 91,679 employers were paying

CPF contributions for their employees. The defaultrate for employers who failed to pay CPF monthlycontributions on time continued to improve. Itwas 0.59% compared to 0.72% in 2004.

CORPORATE CITIZENSHIPCPF staff continued to demonstrate their strong

support for community service activities andshowed compassion for disaster victims throughfund raising activities. It is this very altruism thathas earned the Board the SHARE ProgrammePlatinum Award for the 13th consecutive year. Thisaward is given out by the Community Chest toacknowledge the Board’s unstinted efforts incommunity service.

This year, the Board refocused its efforts to helpthe elderly. For a start, the proceeds from all in-house donation drives were channelled to theComChest (Elderly) Section. We also worked with


Percentage of Respondents in the Annual CustomerService Survey Who Gave Ratings of “Satisfied” or“Very Satisfied” for the Board’s Service

Year Employer Member

2005 98.9% 98.5%

2004 97.2% 96.0%

2003 99.5% 95.5%

2002 98.1% 95.9%

2001 97.4% 95.9%


the Singapore Action Group of Elders (SAGE), avoluntary welfare organisation (VWO), to advocateactive ageing, and to broaden the scope ofvolunteering opportunities for staff. Some of theSAGE activities that CPF staff participated inincluded the recycling-cum-fund raising event inJune and helping out as ushers for a series ofperformances organised by SAGE during theSenior Citizens Week in November. All theseinitiatives were carried out in addition to the regularvisits to the Board’s adopted home, the Society forthe Aged Sick, to bring cheer to the residents.

The CPF Family Day, held on 20 August 2005,was attended by 1,400 Board’s staff and familymembers. We invited a group of under-privilegedchildren from Ang Mo Kio Family Service Centre(Sengkang) and elderly folks from Society of AgedSick (CPF’s adopted Home), to join us for a day offun and laughter.

The Board also assisted charitable organisationsin providing volunteers and the selling of donationdraw tickets.

Besides caring for the less fortunate, theBoard also furthered the national drive towards a“clean and green environment”. During the year,30,160 kg of paper was collected for recycling.

The Board’s in-house annual Blood DonationDrive saw a total of 114 participants. Theoverwhelming response is encouraging and theBoard will look into facilitating opportunities forstaff to donate blood on a more regular basis.

ADMINISTRATION & FINANCETop Public Service (PS) Award Winner 2005

The Board became the first public agency towin the Top Public Service (PS) Award forOrganisational Excellence in November 2005. TheTop PS award, the highest organisational excellenceaward for a public service organisation, serves torecognise public service organisations which haveattained key organisational excellence standards. It is given to organisations that attain the Singapore

Quality Award (SQA) and all the four Managingfor Excellence standards (People DeveloperStandard, ISO 9001:2000, Innovation Class andService Class). The Board achieved the InnovationClass (I-Class) and Service Class (S-Class) statusin July 2005.

Innovation ProgrammesThe Board’s WITs (Work Improvement Teams)

programme has remained active for the past 24years. In 2005, all staff participated in the Board’sWITs programme. 128 WITS teams were formedand they completed an average of 4.25 projects perteam. A total of 127 projects were presented at theBoard’s WIT presentations, with judging bySPRING’s certified judges. 22% achieved Starand Gold awards.

All staff participated in “My Ideas” scheme,introduced in 1983. Each staff submitted an averageof 9.81 ideas. The percentage of ideas accepted forimplementation was 44%.

The CPF “WOW” Ideas Award was introducedin 2001 to encourage more impactful and creativeideas from staff. In 2005, 88 “WOW” ideaswere generated from staff – an 18.92% increasefrom 2004. The best four ideas competed for theAward in the “WOW” Ideas Conference held inOctober 2005.

CPF Board Innovation Fund (CIF) wasintroduced in late 2001. This fund providesresources for staff to experiment their innovativeideas. In 2005, CIF funded the trial implementationof the project “mPAL for members”. The projectwas eventually launched in October.

The challenge to cut red-tape on processes andrules affecting staff and customers; and to introduceinnovative changes, is overseen by Public OfficersWorking on Eliminating Red-tape (POWER) –STAFF and the Rules Review Committee. In 2005,a total of 95 rules were reviewed, of which 19 wereimproved, removed or streamlined.


Staff DevelopmentBenchmarked against the People Developer

Standards (PDS), the Board has facilitated amore strategic and rigorous approach to staffdevelopment. The average training hours perstaff for 2005 was 70.93, which exceeded the targetof 70 hours.

Recognition for Staff ExcellenceIn 2005, 14 staff were presented with the Staff

Excellence Award for their excellent overallperformance and living out the CPF values. Theseprestigious awards were first introduced in 1989to recognise and reward staff for their outstandingperformance and contributions to the Board.

International RelationsThe Board received more than 400 visitors

from foreign national provident funds, governmentbodies and private organisations in 2005.

CPF Board is one of the founding members ofthe ASEAN Social Security Association (ASSA).The ASSA was formed to provide a forum formember institutions to exchange views andexperiences on social security issues. Its memberscomprise 11 social security institutions of eightASEAN countries namely, Brunei, Indonesia,Lao PDR, Malaysia, Philippines, Singapore,Thailand and Vietnam. As a non-governmentorganisation, ASSA seeks to promote thedevelopment of social security in the region inconsonance with the aspirations, laws andregulations of the member countries.

National EducationThe Board has always played an active role in

nation building. The Board’s “CPF and You”programme reached out to a few hundred juniorcollege students in 2005. During these sessions,students learnt more about CPF schemes and therole that CPF plays in nation building. Theprogramme is part of the Learning Journey

Programme coordinated by the Ministry ofEducation for students to understand the factorsbehind Singapore’s nation building, and to instilla sense of pride in these students who would bethe future leaders of Singapore. The Board is oneof the key national institutions invited to participatein the Programme.

FINANCEAs at 31 December 2005, CPF members’ funds

amounted to $119,787.5 million. Of this, $115,362.2million was invested in special issues of SingaporeGovernment securities and $4,425.3 million placedas Advance Deposits with the Monetary Authorityof Singapore pending the issue of such securities.

The insurance funds stood at $3,218.4 millionas at 31 December 2005 and they were mainlyinvested in bonds, equities and deposits byinstitutional fund managers.

09. Financials FA (Converted)-2 7/3/06 12:30 PM Page 1

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FinancialStatements36 Statement by the Central

Provident Fund Board37 Report on the Audit38 Balance Sheet39 Income & Expenditure Statement40 Statement of Changes in Equity41 Cash Flow Statement42 Notes to the Financial Statements

Saving for Retirement ... Financial Statements / 35

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STATEMENT BY THE CENTRALPROVIDENT FUND BOARD

In our opinion, the accompanying financial statements of the funds managed by the Board as set out onpages 38 to 79 are drawn up so as to give a true and fair view of the state of affairs of the Board as at31 December 2005, and the results, changes in equity and cash flows of the Board for the financial yearthen ended.

On Behalf of the Board

KOH YONG GUANChairman

LIEW HENG SANChief Executive Officer

Singapore28 March 2006

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The financial statements of the Central Provident Fund Board, set out on pages 38 to 79, have been auditedunder my direction and in accordance with the provisions of the Central Provident Fund Act (Cap. 36, 2001Revised Edition). These financial statements are the responsibility of the Board’s management. Myresponsibility is to express an opinion on these financial statements based on the audit.

The audit was conducted in accordance with the Central Provident Fund Act (Cap. 36, 2001 Revised Edition)and Singapore Standards on Auditing. Those Standards require that the audit be planned and performedin order to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by the Board’s management, as well as evaluating the overall financial statementspresentation. I believe that the audit provides a reasonable basis for my opinion.

In my opinion,

(a) the financial statements are properly drawn up in accordance with the provisions of the Central ProvidentFund Act (Cap. 36, 2001 Revised Edition) and Singapore Financial Reporting Standards so as to give atrue and fair view of the state of affairs of the Board as at 31 December 2005, and the results, changesin equity and cash flows of the Board for the year ended on that date;

(b) proper accounting and other records have been kept, including records of all assets of the Board whetherpurchased, donated or otherwise; and

(c) receipts, expenditure and investment of moneys and the acquisition and disposal of assets by the Boardduring the financial year have been in accordance with the provisions of the Central Provident Fund Act(Cap. 36, 2001 Revised Edition).

CHUANG KWONG YONGAuditor-GeneralSingapore29 March 2006

REPORT ON THE AUDIT OFTHE FINANCIAL STATEMENTSOF THE CENTRAL PROVIDENTFUND BOARDFor the year ended 31 December 2005



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BALANCE SHEETAs at 31 December 2005

2005 2004Note S$’000 S$’000

CENTRAL PROVIDENT FUND 4

ACCUMULATED SURPLUS 1,629,830 1,598,475

NON-CURRENT LIABILITIESMembers’ accounts 5 119,787,538 111,873,821Reserve Account 6 37,230 37,678Other non-current liability 7 - 153

119,824,768 111,911,652

121,454,598 113,510,127

INSURANCE FUNDS

Home Protection Fund 8 2,191,892 2,041,765

MediShield Fund 8 747,920 567,594Dependants’ Protection Fund 9 - 557,307Dependants’ Protection Residual Fund 10 278,589 -

3,218,401 3,166,666

124,672,999 116,676,793

Represented by:

FIXED ASSETS 11 178,117 179,443

INTANGIBLE ASSETS 12 3,054 7,016

LONG-TERM INVESTMENTS 13 112,187,936 103,727,846

STAFF LOANS 14 417 1,064

CURRENT ASSETSInvestments 15 7,790,279 8,500,000Debtors and deposits 16 14,357 40,384Accrued interest 1,056,696 938,450Bank deposits 17 197,800 94,600Cash and bank balances 17 160,775 99,570

9,219,907 9,673,004

Less: CURRENT LIABILITIESCreditors, accruals and provisions 18 133,224 76,979Contribution payable to Government

Consolidated Fund 19 1,609 1,267

134,833 78,246

NET CURRENT ASSETS 9,085,074 9,594,758

121,454,598 113,510,127

NET ASSETS OF INSURANCE FUNDSHome Protection Fund 8 2,191,892 2,041,765MediShield Fund 8 747,920 567,594Dependants’ Protection Fund 9 - 557,307Dependants’ Protection Residual Fund 10 278,589 -

3,218,401 3,166,666

124,672,999 116,676,793

The accompanying notes form part of the financial statements.



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2005 2004Note S$’000 S$’000

INCOME

Interest income from investments 3,766,214 3,461,829Agency, consultancy and data processing fees 20 34,175 29,817Rent, service charges and car park receipts 21 12,412 11,913Penalty interest on late contributions 12,052 12,679Interest from bank deposits 3,614 874Miscellaneous revenue 829 1,149

3,829,296 3,518,261

Less: EXPENDITURE

Salaries and staff benefits 22 70,188 75,139Depreciation and amortisation 11,12 9,914 11,647General and administrative expenditure 23 9,322 3,227Computer software and supplies 8,742 8,849Maintenance of buildings and equipment 6,634 7,047Agency fees and other professional charges 5,067 5,855Printing and postage 5,013 6,157Public utilities 2,863 2,624Property tax 2,169 2,147Publicity and campaigns 1,063 1,248Lease interest 18 37

120,993 123,977

Interest credited to members’ accounts 5 3,675,441 3,375,266

SURPLUS FOR THE YEARbefore contribution to GovernmentConsolidated Fund 32,862 19,018

Less: Contribution to GovernmentConsolidated Fund 19 1,507 1,266

NET SURPLUS FOR THE YEAR 31,355 17,752


INCOME AND EXPENDITURESTATEMENT FORCENTRAL PROVIDENT FUNDFor the year ended 31 December 2005



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2005 2004S$’000 S$’000

Accumulated surplus as at 1 January 1,598,475 1,580,723

Add:Net surplus for the year 31,355 17,752

Accumulated surplus as at 31 December 1,629,830 1,598,475


STATEMENT OF CHANGESIN EQUITY FORCENTRAL PROVIDENT FUNDFor the year ended 31 December 2005



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2005 2004Note S$’000 S$’000

CASH FLOWS FROM OPERATING ACTIVITIES

Surplus for the year before contribution toGovernment Consolidated Fund 32,862 19,018

Adjustments for:Depreciation and amortisation 9,914 11,647Interest credited to members’ accounts 3,675,441 3,375,266Write-off of fixed assets 6,324 2Sale of fixed assets (2,444) (29)Interest income from investments and bank deposits (3,769,828) (3,462,703)Lease interest 18 37

Deficit before working capital changes (47,713) (56,762)

Add changes in working capital:Decrease in debtors and deposits 25,953 8,849Increase in creditors, accruals and provisions 55,062 3,000

Add/(less) cash flows from:Contributions, Government grants and

dividends received 16,105,105 15,320,105Withdrawals by members (11,776,057) (10,310,297)Refunds of contributions (91,220) (50,631)Placement of advance deposits (16,250,369) (17,793,395)Redemption of special issues of

Singapore Government securities 8,500,000 9,490,000Net reduction in staff loans 720 205Interest received 3,651,582 3,381,396Contribution to Government Consolidated Fund (1,164) (1,371)

Net cash from/(used in) operating activities 171,899 (8,901)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for purchase of fixed assets (7,842) (6,931)Payments for purchase of intangible assets (1,723) (183)Proceeds from sale of fixed assets 2,444 29

Net cash used in investing activities (7,121) (7,085)

CASH FLOWS FROM FINANCING ACTIVITY

Repayment of finance lease liability (355) (376)Lease interest paid (18) (37)

Net cash used in financing activity (373) (413)

NET INCREASE/(DECREASE) IN CASH ANDCASH EQUIVALENTS 164,405 (16,399)

CASH AND CASH EQUIVALENTSAS AT 1 JANUARY 194,170 210,569

CASH AND CASH EQUIVALENTSAS AT 31 DECEMBER 17 358,575 194,170


CASH FLOW STATEMENT FORCENTRAL PROVIDENT FUNDFor the year ended 31 December 2005



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These notes form an integral part of and should be read in conjunction with the accompanyingfinancial statements.

1 PRINCIPAL ACTIVITIES

The Central Provident Fund Board is a statutory board established under the Central Provident FundAct (CPF) (Cap.36) under the purview of the Ministry of Manpower. As a statutory board, the Board is subject to the directions of the Ministry of Manpower and is required to implement policies and policychanges as determined by its supervisory ministry and other Government ministries such as the Ministryof Finance from time to time.

The Board administers the CPF which is Singapore’s national social security savings scheme jointly supported by employees, employers and the Government.

The Board’s principal activities include the collection of CPF contributions, the processing of withdrawalsof CPF savings by members under the various schemes and the administration of the Home Protection,MediShield and Dependants’ Protection Funds.

The Board is the trustee of the CPF and the administrator of the Home Protection Fund, MediShield Fund and Dependants’ Protection Fund. The Dependants’ Protection Fund was dissolved during the financial year (Note 9).

The address of its office is 79 Robinson Road, CPF Building, Singapore 068897.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements have been prepared in accordance with the provisions of the CentralProvident Fund Act (Cap.36) and Singapore Financial Reporting Standards (FRS).

The financial statements are presented in Singapore dollars (S$) and rounded to the nearestthousand, unless otherwise stated. They are prepared on the historical cost basis except forcertain financial assets and liabilities which are stated at fair value.

The preparation of financial statements in conformity with FRS requires management to exerciseits judgement in the process of applying the Board’s accounting policies. It also requires the useof accounting estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities at the date of the financial statements, and thereported amounts of income and expenditure during the financial year. Although these estimatesare based on management’s best knowledge of current events and actions, actual results mayultimately differ from those estimates.

In 2005, the Board adopted the new or revised FRS and interpretations to FRS (INT FRS) that areapplicable in the current financial year. The 2005 financial statements have been amended asrequired, in accordance with the relevant provisions in the respective FRS and INT FRS.

The more significant changes to the Board’s accounting policies as a result of the adoption ofthese new or revised FRS and INT FRS are disclosed in Note 3.

NOTES TO THEFINANCIAL STATEMENTSFor the year ended 31 December 2005



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2 SIGNIFICANT ACCOUNTING POLICIES (continued)

2.2 Basis of recognising contributions and income

By virtue of sections 12 and 13 of the Central Provident Fund Act (Cap.36), contributions arerecognised when received and credited directly to the members’ accounts.

Penalty interest on late contributions, interest income on investments and bank deposits arerecognised on an accrual basis.

Dividend income from investments is recognised when the shareholders’ rights to receivepayments have been established.

Premiums from Insurance Funds are taken directly to the respective funds and are recognisedon an accrual basis.

Income from services is recognised when the services have been rendered.

2.3 Operating expenditure

By virtue of the Central Provident Fund Act (Cap.36), all operating expenditure relating to theCentral Provident Fund, Home Protection Fund, MediShield Fund and Dependants’ ProtectionFund are charged to the respective funds.

2.4 Insurance Funds

Insurance Funds are established by the Board under the Central Provident Fund Act (Cap.36) toaccount for receipts and payments under the Home Protection Scheme, MediShield Scheme andDependants’ Protection Scheme. These funds are controlled and administered by the Board.

Receipts and payments relating to these funds are taken directly to the funds and the excess ofthe funds’ assets over liabilities is reflected separately in the fund statements. These funds areaccounted for on an accrual basis.

2.5 Fixed assets and depreciation

Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses,if any (Note 2.7). Cost includes expenditure that is directly attributable to the acquisition of theassets. Dismantlement, removal or restoration costs are included as part of the cost of fixed assetif the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiringor using the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the assetwill flow to the Board and the cost of the asset can be measured reliably. All other repairs andmaintenance are charged to the income and expenditure statement during the financial year inwhich they are incurred.



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2.5 Fixed assets and depreciation (continued)

Depreciation is calculated using the straight-line method to write off the cost of the fixed assetsover their estimated useful lives. The estimated useful lives are as follows:

Leasehold land – period of the leaseBuildings – 50 years or period of the lease, whichever is shorterBuilding renovation and improvement – remaining life of the buildingMachinery and equipment – 4 to 20 yearsFurniture and fittings – 8 yearsData processing equipment – 3 to 5 yearsOther assets – 30 years

A full year’s depreciation is charged in the year of acquisition of the assets and no depreciationis charged in the year of disposal. No depreciation is provided for freehold land, land with statutorygrant and construction-in-progress.

Fully depreciated assets are retained in the books until they are disposed of.

Assets costing below S$2,000 per item are charged against income in the year of purchase.

2.6 Intangible assets and amortisation

Computer software including software development costs are capitalised on the basis of thecosts incurred to bring to use or develop the specific software. Direct expenditure which enhancesor extends the performance of computer software beyond its specifications and which can bereliably measured, is recognised as a capital improvement and added to the original cost of thesoftware. Costs associated with maintaining computer software are recognised as an expenseas incurred.

Computer software is stated at cost less accumulated amortisation and accumulated impairmentlosses, if any (Note 2.7). Amortisation is calculated using the straight-line basis to write off thecost of the computer software over their estimated useful lives ranging from 3 to 20 years.

A full year’s amortisation is charged in the year the asset is available for use and no amortisationis charged in the year of disposal. No amortisation is provided for intangible assets

under development.

Fully amortised assets are retained in the books until they are disposed of.

Computer software costing below S$2,000 per item are charged against income in the yearof purchase.




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2.7 Impairment of fixed and intangible assets

Fixed and intangible assets are reviewed for impairment at each balance sheet date wheneverevents or changes in circumstances indicate that the carrying amount of an asset may notbe recoverable.

Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment lossis recognised in the income and expenditure statement.

Reversal of impairment losses recognised in prior years is recorded when there is an indicationthat the impairment losses recognised for the asset no longer exist or have decreased. Thereversal is recognised in the income and expenditure statement. However, the increased carryingamount of an asset due to a reversal of an impairment is recognised to the extent that itdoes not exceed the carrying amount that would have been determined (net of depreciation oramortisation) had no impairment losses been recognised for the asset in prior years.

2.8 Finance lease

Assets financed by lease agreements, which effectively transfer to the Board substantially all therisks and benefits incidental to ownership of the leased items, are capitalised at the present valueof the minimum lease payments at the inception of the lease term. The corresponding leasecommitments are included under liabilities. The excess of the lease payments over the recordedlease obligations are treated as lease interest which are amortised over each lease term to givea constant rate of charge on the remaining balance of the obligation. Lease interest are chargeddirectly to the income and expenditure statement.

Capitalised lease assets are depreciated over the estimated useful life of the assets or the leaseterm, whichever is shorter.

2.9 Financial assets and liabilities

(a) Staff loans, debtors and other receivables

Staff loans, debtors and other receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less allowance for impairment.

(b) Investments

Central Provident Fund classifies its investments as “held-to-maturity investments”. TheInsurance Funds classify their investments as “financial assets at fair value through profit andloss”. The classification depends on the purpose for which the assets are acquired.



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2.9 Financial assets and liabilities (continued)

(b) Investments (continued)

(i) Classification

(a) Financial assets at fair value through profit and loss

This category of investments relates to financial assets held for trading. A financial assetis classified in this category if acquired principally for the purpose of selling in the shortterm. Derivatives are also categorised as held for trading. Hedge accounting for derivativesis not adopted. Assets in this category are classified as current assets if they are eitherheld for trading or are expected to be realised within 12 months after the balance

sheet date.

(b) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturities that the fund has the positive intention and ability to holdto maturity. The fund’s held-to-maturity investments include investments in specialissues of Singapore Government securities and advance deposits placed with theAccountant-General.

(ii) Recognition and derecognition

Purchases and sales of investments are recognised on trade date – the date on which thefund commits to purchase or sell the financial asset. Investments are derecognised whenthe rights to receive cash flows from the financial assets have expired or have beentransferred and the fund has transferred substantially all risks and rewards of ownership.

(iii) Initial measurement

Financial assets are initially recognised at fair value.

(iv) Subsequent measurement

Financial assets classified as “fair value through profit and loss” are subsequently carriedat fair value. “Held-to-maturity investments” are carried at amortised cost using the effectiveinterest method, less any impairment loss recognised to reflect irrecoverable amounts(Note 2.9(f)).

Realised and unrealised gains and losses arising from changes in fair value of financialassets classified as “fair value through profit and loss investment” are included in the fundstatement in the period in which they arise.



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2.9 Financial assets and liabilities (continued)

(c) Cash and cash equivalents

Cash and cash equivalents comprise bank deposits, cash and bank balances. They are subjectto an insignificant risk of change in value.

(d) Creditors and other payables

Creditors and other payables are initially measured at fair value, and subsequently measuredat amortised cost, using the effective interest method.

(e) Fair value estimation

The fair value of financial instruments traded in active market is based on quoted market pricesat fund statement date. The quoted market price used for financial assets held by the fundsis the current bid price and the quoted market price for financial liabilities is the current askprice. The fair value of interest-rate swaps is calculated as the present value of the estimatedfuture cash flows, discounted at actively quoted interest rate. The fair value of forward foreignexchange contracts is determined using forward exchange market rates at the fund statementdate. The fair value of options not traded in active market is determined by using valuationtechniques from external sources where available.

The carrying amounts of the following financial assets and liabilities approximate their fairvalues: investments in special issues of Singapore Government securities and advance deposits,staff loans, debtors and other receivables, creditors and other payables, cash and bank deposits.

The carrying amounts recorded at the balance sheet date are not expected to be significantlydifferent from the values that would eventually be received or settled.

(f) Impairment

Financial assets not classified as “fair value through profit and loss” are reviewed for impairmentat each balance sheet date whenever events or changes in circumstances indicate that thecarrying amount of a financial asset may not be recoverable.

An impairment loss is recognised in income and expenditure when there is objective evidencethat the asset is impaired, and is measured as the difference between the investment’s carryingamount and the present value of estimated future cash flows discounted at the effectiveinterest rate computed at initial recognition. Impairment losses are reversed in subsequentperiods when an increase in the investment’s recoverable amount can be related objectivelyto an event occurring after the impairment was recognised, subject to the restriction that thecarrying amount of the investment at the date the impairment is reversed shall not exceedwhat the amortised cost would have been had the impairment not been recognised.



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2.10 Foreign currencies

Transactions in foreign currencies are measured and recorded in Singapore dollars, using theexchange rates in effect at the dates of the transactions. Monetary items denominated in foreigncurrencies are translated into Singapore dollars at the rates of exchange prevailing at the balancesheet date. Non-monetary items carried at fair value that are denominated in foreign currenciesare translated at the rates prevailing on the dates when the fair values were determined.

Exchange differences arising on the settlement and translation of monetary and non-monetaryitems carried at fair value are reported as part of the fair value gain or loss in the respectivefund statement.

2.11 Provisions

Provisions are recognised when the funds have a present obligation (legal or constructive) as aresult of a past event, and it is probable that the funds will be required to settle that obligation.Provisions are estimated based on the best estimate of the expenditure required to settle theobligation, taking into consideration the time value of money.

2.12 Employee benefits

(a) Defined contribution plans

Contributions on employees’ salaries are made to the Central Provident Fund (CPF), as requiredby law. The CPF contributions are recognised as compensation expense in the period whenthe employees rendered their services.

(b) Employees’ leave entitlement

Employees’ entitlement to annual leave are recognised when they accrue to the employees. A provision is made for leave earned by the employees as a result of services rendered up

to the balance sheet date.

(c) Termination benefits

Termination benefits are payable whenever an employee accepts voluntary redundancy inexchange for these benefits. The Board recognises termination benefits as a result of an offermade due to redundancy.



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3 EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS

3.1 FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement and FRS 32

(revised 2004) Financial Instruments: Disclosure and Presentation

(a) Classification and consequential accounting for financial assets and financial liabilities

(i) Previously, the Insurance Funds’ investments which were intended for sale in the shortterm were stated at the lower of cost and market value on an aggregated portfolio basis,with changes in market value included in net income from funds with fund managers inthe respective fund statements. In accordance with FRS 39 (revised 2004), these investmentsare now classified as “financial assets at fair value through profit and loss” and are initiallyrecognised at fair value and subsequently re-measured to fair value at the fund statementdate with all gains and losses recognised as part of the fair value gain or loss in the respectivefund statements in the period in which the changes in fair value arises (Note 2.9(b)).

This change was effected prospectively from 1 January 2005. The increase in the fundsizes as at 1 January 2005 is as follows:

S$’000Home Protection Fund 141,829MediShield Fund 60,186Dependants’ Protection Fund 68,641

The effects on the fund statements of Home Protection Fund, MediShield Fund andDependants’ Protection Fund are set out in Notes 8 and 9, respectively.

Should the FRS 39 (revised 2004) not be applied, the closing balance for the fund statementsof Home Protection Fund and MediShield Fund as at 31 December 2005 would be reducedby the following amounts:

S$’000Home Protection Fund 119,974MediShield Fund 66,327

(ii) Previously, the Central Provident Fund’s investments in special issues of SingaporeGovernment securities and advance deposits were stated at cost.

In accordance with FRS 39 (revised 2004), the investments in special issues of SingaporeGovernment securities and advance deposits are now classified as “held-to-maturityinvestments” and are initially recognised at fair value and subsequently measured atamortised cost using the effective interest method, less accumulated impairment loss(Note 2.9(b)).

This change did not materially affect the financial statements for the year ended 31 December 2005.



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3 EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS (continued)

3.1 FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement and FRS 32

(revised 2004) Financial Instruments: Disclosure and Presentation (continued)

(b) Previously, staff loans, debtors and other receivables, creditors and other payables were statedat cost. In accordance with FRS 39 (revised 2004), they are initially recognised at fair valueand subsequently measured at amortised cost using the effective interest method (Notes2.9(a) and 2.9(d)).

The change did not materially affect the financial statements for the year ended 31 December 2005.

(c) Impairment and uncollectibility of financial assets

Previously, the debtors were reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount may not be recoverable. On adoption of FRS39 (revised 2004), impairment of debtors is established when there is objective evidence thatthe funds will not be able to collect all amounts due according to the original terms of thereceivables (Notes 2.9(a) and 2.9(f)).

This change did not materially affect the financial statements for the year ended 31 December 2005.

(d) Fair values of financial assets and liabilities

Previously, the Insurance Funds used the last transacted prices of quoted financial assets orliabilities for market valuation. Fair values of unquoted financial assets and liabilities weremeasured based on last transacted prices of recent arm’s length transactions.

Fair value is now determined in accordance with the guidelines in FRS 39 (revised 2004)(Note 2.9(e)).

3.2 FRS 104 Insurance Contracts

Adequacy of insurance liabilities

Currently, the Insurance Funds recognise liabilities which are present obligations and it is probablethat an outflow of resources will be required to settle the obligations in its respective fundstatements. In accordance with FRS 104, the Insurance Funds have determined that the carryingamount of the relevant insurance liabilities is adequate to meet the insurance liabilities which arepresent obligations and it is probable that the funds will be required to settle those obligations.

The change did not materially affect the fund statements for the year ended 31 December 2005.

4 CENTRAL PROVIDENT FUND

The Central Provident Fund is established by the Central Provident Fund Act (Cap.36). All contributionsauthorised under this Act are paid into the Fund and all payments authorised under this Act are paidout of the Fund.



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5 MEMBERS’ ACCOUNTS2005 2004

Note S$’000 S$’000

Balance as at 1 January 111,873,821 103,539,568Add:Contributions credited in the year 15,248,616 14,876,850Government grants:

CPF Housing Grant Scheme 280,830 233,120Home Ownership Plus Education Scheme 5,668 6,761Medisave Top-Up Scheme 331,067 97,953Retirement Top-Up Scheme 78,593 -

Dividends:Special Discounted Shares Scheme 160,331 105,421

Interest credited in the year 3,675,441 3,375,266

19,780,546 18,695,371Less:

Refunds of contributions:Section 72 of Central Provident Fund Act (a) 43 113Section 75 of Central Provident Fund Act (a) 71,377 29,515Regulations 9 and 14 of Central Provident

Fund (Self-employed persons) Regulations (b) 4,721 4,134Other refunds (c) 15,079 16,869

91,220 50,631Less:

Net transfers (from)/to Reserve Account 6 (448) 190

Less:Withdrawals (net of refunds) by members:

Sections 15 and 25 of Central ProvidentFund Act (d) 2,440,322 2,272,637

Amount restored from Reserve Account (e) 394 568Public Housing Scheme 4,585,363 4,125,057Home Protection Scheme (f) 10,834 -Residential Properties Scheme 2,778,925 2,391,921Medisave Scheme 397,669 367,203Non-Residential Properties Scheme 40,341 38,542Investment Scheme 855,261 818,703Minimum Sum Scheme 365,182 352,073Dependants’ Protection Scheme 149,920 148,092Education Scheme 56,463 46,757MediShield Scheme 193,817 103,874Private Medical Insurance Scheme 142,272 142,064ElderShield Scheme 169,693 166,541

12,186,456 10,974,032Add:

Excess of refunds over withdrawals:Home Protection Scheme (f) - 9,940DelGro Shares Scheme (g) - 9,061Special Discounted Shares Scheme (h) 410,399 644,734

410,399 663,735

Balance as at 31 December 119,787,538 111,873,821



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5 MEMBERS’ ACCOUNTS (continued)

(a) Refunds under sections 72 and 75 of the Central Provident Fund Act (Cap.36) refer to refundsto the Government for excess contributions and interest relating to public officers before theirconfirmation as pensionable officers, and refunds of excess contributions on additionalwages, respectively.

(b) Refunds under regulations 9 and 14 of the Central Provident Fund (Self-employed persons)Regulations refer to refunds of excess contributions to Medisave Account and voluntary contributions(VC) paid in excess of the VC limit, respectively.

(c) Other refunds mainly refer to refunds under section 74 of the Central Provident Fund Act (Cap.36)for contributions paid in error.

(d) Withdrawals under sections 15 and 25 of the Central Provident Fund Act (Cap.36) mainly referto withdrawals by members who attain the age of 55 years and by members who leave Singaporeand West Malaysia permanently, as well as on grounds of death.

(e) The amount restored from Reserve Account refers to the amount refunded to members or theirnominees upon application made under regulation 7(5) of the Central Provident Fund Regulations.

(f) In FY2005, there were more renewal cases due to inclusion of new covers issued over the years,thus the withdrawals by members were higher. In FY2004, there was excess of refunds overwithdrawals for Home Protection Scheme premium which had reduced significantly since thepremium payment mode was changed from single to annual payment in March 2001. However,the refunds from the surrender of single premium covers continue.

(g) The DelGro Shares Scheme was terminated in February 2004. In FY2004, members were givena choice of either to repurchase the shares in ComfortDelGro Corporation Ltd and refund theprincipal amount to their CPF account or have their shares transferred to their Investment Accountunder the CPF Investment Scheme, thus resulting in the excess of refunds to members’CPF account.

(h) Under the Special Discounted Shares Scheme, a capital reduction exercise was carried out bySingTel in September 2004 whereby SingTel refunded a cash distribution into members’ CPFaccount in exchange for the shares cancelled. There was also a surge in the sales volume duringFY2004 and FY2005 resulting in the excess of refunds to members’ CPF account.

8055/CPF AR 2005/GreenHouse/#133(270x270)/08.06.06/MAC E_M9 8055/


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6 RESERVE ACCOUNT

This account is set up under regulations 7(2) and 7(3) of the revised Central Provident Fund Regulations.All unclaimed monies which match the conditions stipulated under these regulations were transferredfrom members’ balances to this account. The balance in this account is refundable to members or theirnominees upon application made under regulation 7(5).

2005 2004S$’000 S$’000

Balance as at 1 January 37,678 37,488

Net transfers (to)/from:Members’ accounts (448) 190

Balance as at 31 December 37,230 37,678

7 OTHER NON-CURRENT LIABILITY

Obligations under finance lease – 2005 2004minimum lease payments S$’000 S$’000

Within one year 155 372

After one year but not more than five years - 155

Total minimum lease payments 155 527

Less: Amounts representing lease interest 2 19

Present value of minimum lease payments 153 508

The present value of finance leaseliabilities is as follows:

2005 2004S$’000 S$’000

Within one year 153 355

After one year but not more than five years - 153

153 508

The Board has a finance lease for a data processing equipment which expires in 2006. At the expirationof the lease, the Board has the option to purchase the asset for S$100. The present value of the leasepayments due within 12 months is included under creditors, accruals and provisions. The averagediscount rate implicit in the lease is 5% per annum.



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8 HOME PROTECTION FUND AND MEDISHIELD FUND

The Home Protection Fund is set up under section 33 of the Central Provident Fund Act (Cap.36) toaccount for premiums received, claims paid for home insurance cover and operating expenses incurredunder the Home Protection Scheme.

The MediShield Fund is set up under section 56 of the Central Provident Fund Act (Cap.36) to accountfor premiums received, claims paid for medical insurance cover and operating expenses incurred underthe MediShield Scheme. The MediShield Plus portfolio was transferred to an appointed private insurerin October 2005. The insurer who took over the MediShield Plus portfolio is responsible for the insuranceoperations as well as the financial solvency of the MediShield Plus portfolio.

HOME PROTECTION FUND MEDISHIELD FUND2005 2004 2005 2004

Note S$’000 S$’000 S$’000 S$’000

Balance as at 1 January 2,041,765 2,038,031 567,594 524,505Effects of changes in

accounting policy 3.1(a)(i) 141,829 - 60,186 -

As restated 2,183,594 2,038,031 627,780 524,505

Add:Insurance premiums 108,697 94,098 185,902 100,030Interest from bank deposits 1,393 1,191 909 402Net income from funds with

fund managers 8.1 101,888 116,208 54,782 31,435

211,978 211,497 241,593 131,867

Less:Claims 99,860 97,021 87,739 83,770Surrenders 97,851 104,017 - -Agency fees and other

professional charges 3,240 3,459 5,911 3,372Salaries and staff benefits 22 1,635 1,658 1,426 1,335Computer software

and supplies 424 459 1 13General and administrative

expenditure 308 424 125 66Maintenance of buildings

and equipment 209 212 1 4Printing and postage 137 171 710 207Publicity and campaigns 14 7 - -Depreciation 11 2 335 2 11

203,680 207,763 95,915 88,778

2,191,892 2,041,765 773,458 567,594

Less:Funds transferred to

private insurer - - 25,538 -

Balance as at 31 December 2,191,892 2,041,765 747,920 567,594



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8 HOME PROTECTION FUND AND MEDISHIELD FUND (continued)


Note S$’000 S$’000 S$’000 S$’000

Represented by:

CURRENT ASSETSInvestments 8.2 2,167,220 2,056,429 724,155 558,490Sundry debtors 6,328 3,093 8,937 1,496Accrued interest 378 671 493 295Bank deposits 78,800 40,800 15,600 8,400Cash and bank balances 479 316 418 318

2,253,205 2,101,309 749,603 568,999

Less: CURRENT LIABILITIESClaims intimated or admitted

but not paid 61,313 59,544 705 689Sundry creditors - - 978 716

61,313 59,544 1,683 1,405

NET CURRENT ASSETS 2,191,892 2,041,765 747,920 567,594

TOTAL NET ASSETS 2,191,892 2,041,765 747,920 567,594

2005 2004 2005 2004S$’000 S$’000 S$’000 S$’000

ESTIMATED ACTUARIAL LIABILITIES 1,586,900 1,734,900 647,100 372,700

The estimated actuarial liabilities (including capital adequacy requirement for FY2005 and solvencymargin for FY2004) have been determined in the light of advice received from the Board’s independentactuarial advisers. With effect from 1 January 2005, the valuation of each of the insurance funds isperformed using the risk-based capital framework for insurers in Singapore. Under this new framework,the market value of assets is used instead of the lower of cost or market value that was used underthe previous framework.



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8.1 Net income from funds with fund managers


S$’000 S$’000 S$’000 S$’000

INCOMEInterest income 50,962 45,909 9,520 7,444Dividend income 14,785 13,476 8,328 8,049Net fair value gain 42,371 - 39,930 -Profit on sale of investments - 41,528 - 12,044Foreign exchange gain 461 23,230 - 6,076Miscellaneous revenue 49 1 9 -

108,628 124,144 57,787 33,613

Less: EXPENDITUREForeign exchange loss - - 428 -Fund management fees 6,740 7,936 2,577 2,178

6,740 7,936 3,005 2,178

NET INCOME FROM FUNDSWITH FUND MANAGERS 101,888 116,208 54,782 31,435

For this financial year, the net fair value gain includes both the realised and unrealised fair valuegain/loss and realised and unrealised foreign exchange gain/loss for investments classified as “fairvalue through profit and loss”. Foreign exchange gain/loss for investments that are not classifiedas “fair value through profit and loss” is separately disclosed under “Foreign exchange gain/loss”.

For last financial year, both the realised and unrealised foreign exchange differences for all assetsand liabilities in foreign currencies were classified under “Foreign exchange gain/loss”. “Profiton sale of investments” represented realised capital gain on sale of investment. This item isreported as part of the net fair value gain/loss in this financial year.



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8.2 Investments


S$’000 S$’000 S$’000 S$’000

Funds managed byfund managers 2,167,220 2,056,429 724,155 558,490

Represented by:

Fixed income securities atfair value (2004: at cost)Denominated in S$ 883,087 879,230 192,109 158,858Denominated in US$ 573,428 523,764 111,074 85,972Denominated in

other currencies 216,304 271,846 51,214 55,338Equities at fair value

(2004: at cost)Denominated in S$ 124,598 82,491 72,432 55,298Denominated in US$ 243,571 230,837 158,493 120,553Denominated in

other currencies 220,676 180,764 142,218 95,721Derivatives at fair value

(2004: at cost)Interest-rate futures

contracts purchased– with positive fair value 138 - - -– with negative fair value (983) - (508) -Interest-rate futures

contracts sold– with positive fair value 1,166 - 565 -Forward foreign

exchange contracts– with positive fair value 8,532 - 4,520 -– with negative fair value (1,370) - (620) -Interest-rate swaps– with positive fair value 2,488 4,183 - -– with negative fair value (9,210) (3,709) - -Interest-rate options– with positive fair value 891 - - -– with negative fair value (929) (1,680) - -

2,262,387 2,167,726 731,497 571,740

Add/(Less):Interest and other receivables 96,108 52,825 11,491 11,332Accruals and payables (219,043) (186,593) (31,759) (32,815)Bank deposits 18,753 19,474 11,487 7,781Cash balances 9,015 2,997 1,439 452

(95,167) (111,297) (7,342) (13,250)

2,167,220 2,056,429 724,155 558,490



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8.2 Investments (continued)

(a) The fair value of financial instruments (fixed income securities, equities and interest-rate futurescontracts) traded in active market is based on quoted market prices at fund statement date.The quoted market price used for financial assets held by the funds is the current bid priceand the quoted market price for financial liabilities is the current ask price. The fair value ofinterest-rate swaps is calculated as the present value of the estimated future cash flows,discounted at actively quoted interest rate. The fair value of forward foreign exchange contractsis determined using forward exchange market rates at the fund statement date. The fair valueof options not traded in active market is determined using valuation techniques from externalsources where available.

(b) Hedge accounting for derivatives is not adopted.

(c) The carrying amount of the financial assets and financial liabilities approximates their fair values.

(d) The market value of the following instruments under funds managed by fund managers asat 31 December 2004 are:

HOME PROTECTION FUND MEDISHIELD FUNDS$’000 S$’000

Fixed income securities 1,731,641 312,260Equities 581,850 321,026Derivatives 1,241 -

2,314,732 633,286

8.3 Financial derivatives

(a) Notional principal

Notional principal of the financial derivatives are as follows:


S$’000 S$’000 S$’000 S$’000

(i) Interest-rate futures contracts

(a) Futures contractspurchased 286,571 226,188 44,522 18,863

(b) Futures contracts sold 116,704 65,350 36,951 25,139

(ii) Forward foreign exchangecontracts 835,146 1,057,109 329,892 400,087

(iii) Interest-rate swaps 557,120 287,699 - -

(iv) Interest-rate options 910,050 2,881,512 - -



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8.3 Financial derivatives (continued)

(b) Fair Value

The fair value of the financial derivatives as at 31 December 2004 are as follows:

HOME PROTECTION FUND MEDISHIELD FUNDFavourable Unfavourable Favourable Unfavourable

fair value fair value fair value fair valueS$’000 S$’000 S$’000 S$’000

(i) Interest-rate futures contracts

(a) Futures contractspurchased 1,019 1,114 88 50

(b) Futures contracts sold 268 257 163 11

(ii) Forward foreignexchange contracts 12,317 10,807 5,094 5,215

(iii) Interest-rate swaps 6,988 4,642 - -

(iv) Interest-rate options - 1,106 - -

8.4 Risk management of insurance contracts

(a) Home Protection Fund

(i) The risks arising from Home Protection Scheme insurance policies are death and permanentincapacity risks of a relatively homogeneous portfolio of term insurance policies. Theserisks do not vary significantly in relation to the location of the risk insured by the Board. Theobjectives in managing these risks are:(a) to ensure that all legitimate claims of insured members are met;(b) to ensure that the Home Protection Fund is financially solvent at all times; and(c) to ensure that the Home Protection Scheme is operated in accordance with the Central

Provident Fund Act (Cap.36), the Home Protection Insurance Scheme regulations andthe operating policies of the Scheme.

(ii) The policies for mitigating insurance risks are:(a) to maintain a relatively large portfolio. Experience shows that the larger the portfolio

of similar insurance policies, the smaller the relative variability in the expected outcome;(b) to manage the fund and insurance portfolio in accordance with sound actuarial, financial

and accounting principles;(c) to adopt an underwriting strategy to recognise and select the insurance risks accepted

so that the claim experience is unlikely to deteriorate;(d) to review regularly its experience, adequacy of premiums and reserves by the Scheme’s

actuarial adviser; and(e) to retain sufficient surplus to allow for volatility of results.



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8.4 Risk management of insurance contracts (continued)

(a) Home Protection Fund (continued)

The insurance portfolio experience, fund solvency and premium adequacy are reviewedby the actuarial adviser of the Home Protection Scheme annually using the risk-basedcapital framework set out by the Monetary Authority of Singapore for the valuation ofliabilities. The actuarial adviser also projects the short and medium term solvency positionof the Scheme annually and reports the results to the Board.

(iii) The terms and conditions of insurance contracts that have a material effect on the amount,timing and uncertainty of the Home Protection Scheme’s future cash flows are:(a) the mortality risk for the older policies has been charged up front via single premiums.

The Board does not have the right to increase the premiums for these policies basedon its mortality experience. This increases its exposure if the mortality experience isworse than what was assumed; and

(b) epidemics such as Acquired Immune Deficiency Syndrome (AIDS) and Severe AcuteRespiratory Syndrome (SARS) or wide-spread changes in lifestyle could result in earlieror more claims than expected.

(iv) The following table presents the sensitivity of the value of insurance liabilities to movementsin the assumptions used in the estimation of insurance liabilities:

Variable Change in variable Change in liability (S$m)Worsening of mortality +10% + 65.3Shift in risk-free yield curve - 0.5% + 39.2Worsening of base expense level +10% + 6.9Changes in the lapse rate - 10% + 0.9

(v) The Home Protection Scheme has no great exposure to concentration of risks.

(b) MediShield Fund

(i) The risks arising from MediShield insurance policies are those of a relatively homogeneousportfolio of health insurance policies. The objectives in managing these risks are:(a) to ensure that all legitimate claims of insured members are met;(b) to ensure that the MediShield Fund is financially solvent at all times; and(c) to ensure that the MediShield Scheme is operated in accordance with the Central

Provident Fund Act (Cap.36), MediShield Scheme regulations and the operating policiesof the Scheme.

(ii) The policies for mitigating insurance risks in the MediShield Scheme are :(a) to manage the fund and insurance portfolio in accordance with sound actuarial, financial

and accounting principles;(b) to adopt an underwriting strategy to recognise and select the insurance risks accepted

so that the claim experience is unlikely to deteriorate;(c) to review regularly its experience, adequacy of premiums and reserves by the Scheme’s

actuarial adviser; and(d) to retain sufficient surplus to allow for volatility of results.

The insurance portfolio experience, fund solvency and premium adequacy are reviewed by the actuarial adviser of the MediShield Scheme annually using the risk-based capital framework set out by the Monetary Authority of Singapore for the valuation of liabilities and the actuarial adviser reports the results to the Board.



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8.4 Risk management of insurance contracts (continued)

(b) MediShield Fund (continued)

(iii) The terms and conditions of the MediShield Scheme that have a material effect on theamount, timing and uncertainty of the MediShield Scheme’s cash flows are:(a) the policies provide indemnity benefits covering specified medical and hospitalisation

conditions. The amount payable depends on the cost incurred by the policyholder in respect of any particular event or treatment and the specified upper limits;

(b) the renewal of each insurance policy is guaranteed until the policyholder reaches age 85, unless the policyholder decides to discontinue cover; and

(c) premium discounts are offered to policyholders between the age of 71 and 85 and theamount of discount depends on the age at entry to the MediShield Scheme.

(iv) The variability of insurance results will affect the value of insurance liabilities from year toyear. Such variations are normal and to be expected in an insurance portfolio. The materialvariables are:(a) average claim amount per claim;(b) claim frequency per person covered;(c) impact of inflation of healthcare costs on claim amounts;(d) recovery rates for patients with claims in payments;(e) long term impact of inflation of healthcare costs on premiums and hence on the cost

of future premium discounts given to members; and(f) the discount rate used for calculating the value of liabilities.

The other variable materially affecting the solvency of the MediShield Scheme is the returnon investments. Management expenses, while directly affecting the annual surplus of thefund, have a less material effect on the calculated liabilities and long term solvency.

(v) Insurance risks are concentrated on specified individual health risks applicable to residentsof Singapore. With the exception of continuing outpatient treatments, the amounts ofalmost all claims are known within one year of the event occurring. For outpatient treatments,each individual claim amount is known within a year, but liability to pay for further treatmentsmay continue for several years.

9 DEPENDANTS’ PROTECTION FUND

The Dependants’ Protection Fund was set up under section 46 of the Central Provident Fund Act(Cap.36) to account for premiums received, claims paid for life insurance cover and operating expensesincurred under the Dependants’ Protection Scheme.

The Dependants’ Protection Scheme has been privatised on 17 September 2005. In accordance withthe Central Provident Fund Act (Cap.36), upon privatisation, the Dependants’ Protection Fund wasdissolved. Part of the dissolved fund was transferred to the appointed private insurers who have, sincethe privatisation, been responsible for the business continuity, operations as well as the financial solvencyof their respective parts of the Scheme. The Board retained such part of the moneys of the dissolvedfund that would be necessary for meeting any liabilities under the Scheme that have arisen prior to theprivatisation. The Dependants’ Protection Fund was audited by a commercial auditor Kong, Lim& Partners.



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9 DEPENDANTS’ PROTECTION FUND (continued)

Period from 20041 January 2005 to

16 September 2005Note S$’000 S$’000

Balance as at 1 January 557,307 516,398Effect of changes in accounting policy 3.1(a)(i) 68,641 -

As restated 625,948 516,398

Add:Insurance premiums 130,198 149,047Dividend income 18 -Interest from bank deposits 3,725 1,851Net income from funds with fund managers 9(a) 28,279 32,288

162,220 183,186

788,168 699,584

Less:Claims 158,916 137,722Agency fees and other professional charges 3,049 2,371Salaries and staff benefits 22 674 842Printing and postage 1,190 272Publicity and campaigns 2 9Computer software and supplies 4 1Depreciation 11 - 3Maintenance of buildings and equipment 1 1General and administrative expenditure 1,180 1,056

165,016 142,277

Less:Funds to be transferred to private insurers 9(b) 348,746 -

Balance as at 16 September 9(c) 274,406

Less:Funds transferred to Dependants’ Protection

Residual Fund 274,406 -

Balance as at 31 December - 557,307

Represented by:

CURRENT ASSETSInvestments - 562,131Sundry debtors - 1,324Accrued interest - 1,156Bank deposits - 85,400Cash and bank balances - 406

- 650,417

Less: CURRENT LIABILITIESAmount payable to private insurers - -Provision for claims incurred but not reported - -Claims intimated or admitted but not paid - 93,110Sundry creditors - -

- 93,110

NET CURRENT ASSETS - 557,307

TOTAL NET ASSETS - 557,307



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(a) Net income from funds with fund managers

Period from 20041 January 2005 to

16 September 2005S$’000 S$’000

INCOMENet fair value gain 19,697 -Dividend income 5,596 8,116Interest income 4,686 7,977Profit on sale of investments - 14,721Foreign exchange gain - 3,744

29,979 34,558

Less: EXPENDITUREFund management fees 1,519 2,270Foreign exchange loss 181 -

1,700 2,270

28,279 32,288

For this financial period, the net fair value gain includes both the realised and unrealised fair valuegain/loss and realised and unrealised foreign exchange gain/loss for investments classified as “fairvalue through profit and loss”. Foreign exchange gain/loss for investments that are not classifiedas “fair value through profit and loss” is separately disclosed under “Foreign exchange gain/loss”.

For last financial year, both the realised and unrealised foreign exchange differences for all assetsand liabilities in foreign currencies were classified under “Foreign exchange gain/loss”. “Profiton sale of investments” represented realised capital gain on sale of investment. This item isreported as part of the net fair value gain/loss in this financial period.



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(b) Amount payable to private insurers

In consideration of taking over the coverage for the policyholders, the private insurers shall bepaid an amount corresponding to the unexpired premium of the yearly renewable policies and asingle premium for the bonus sum assured and free cover.

16 September 2005 2004S$’000 S$’000

Single premium for bonus sum assured 243,694 -Single premium for free cover 18,013 -Unearned premium 87,039 -

348,746 -

Bonus sum assured is an additional coverage granted to Dependants’ Protection Scheme membersin June 2003 in recognition of their years of participation in the Scheme. It ranges from S$1,500to S$4,000 depending on the number of years the member has been insured.

Free cover is given in lieu of the premium discount enjoyed by eligible members, which wasremoved to simplify the premium structure and allow more flexibility for the private insurers toincrease the benefits. A single premium has been paid to the private insurers to take over theliability for the bonus sum assured and free cover provided to the members.

Unearned premium relates to that portion of the premium for which the risk has not expired asat the effective date of privatisation.

(c) Residual Fund

The residual amount of S$274.4 million was transferred to the Dependants’ Protection ResidualFund after privatisation of the Dependants’ Protection Scheme (Note 10). The details of theresidual amount are as follows:

Note S$’000

CURRENT ASSETSInvestments 9(d) -Sundry debtors 1,224Accrued interest 2,027Bank deposits 773,011Cash and bank balances 530

776,792Less: CURRENT LIABILITIESAmount payable to private insurers 9(b) 348,746Provision for claims incurred but not reported 9(e) 48,860Claims intimated or admitted but not paid 103,206Sundry creditors 1,574

502,386

NET CURRENT ASSETS 274,406

TOTAL NET ASSETS 274,406


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(d) Investments

16 September 2005 2004S$’000 S$’000

COSTFunds managed by fund managers - 562,131

Represented by:Fixed income securities - 282,598Equities - 291,859

- 574,457Add/(less):

Interest and other receivables - 11,475Accruals and payables - (33,059)Bank deposits - 8,727Cash balances - 531

- (12,326)

- 562,131MARKET VALUEFunds managed by fund managers

Fixed income securities - 295,070Equities - 349,368

- 644,438

The above investments were sold in anticipation of the privatisation of the Dependants’Protection Scheme.

(e) Provision for claims incurred but not reported

Provision for claims incurred but not reported is established for claims that have been incurredup to 16 September 2005 but which have not been reported to the Central Provident Fund Board.These claims may be admitted at a later date after 16 September 2005.

The amount of provision is in accordance with the actuarial report prepared by the Board’sindependent actuarial adviser.

(f) Expense reserves and contingency claims provision

Based on the actuarial report, a provision of S$6 million should be provided for expense reservesand S$1 million for contingent claims. No provision has been made in this fund statement as theexpenses and claims will be recognised in the Dependants’ Protection Residual Fund’s financialstatements as and when they occur.


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10 DEPENDANTS’ PROTECTION RESIDUAL FUND

The Dependants’ Protection Scheme was privatised on 17 September 2005. The remaining balanceof the moneys of the dissolved Dependants’ Protection Fund was retained in the Dependants’ ProtectionResidual Fund for meeting any liabilities under the Scheme that have arisen prior to the privatisation.The Board intends to distribute any remaining surplus to the Dependants’ Protection Scheme members.

Period from17 September 2005

Note to 31 December 2005S$’000

Balance as at 17 September 2005 9(c) 274,406

Add:Interest from bank deposits 3,096Claims overprovided 1,022Provision for claims incurred but not

reported written back 767Miscellaneous revenue 335Insurance premiums 2

5,222

Less:Agency fees and other professional charges 762Salaries and staff benefits 22 217Printing and postage 48Foreign exchange loss 7General and administrative expenditure 5

1,039

Balance as at 31 December 2005 278,589

Represented by: 31 December 2005S$’000

CURRENT ASSETSSundry debtors 559Accrued interest 1,257Bank deposits 345,900Cash and bank balances 406

348,122

Less: CURRENT LIABILITIESSundry creditor 5,222Claims intimated or admitted but not paid 24,356Provision for claims incurred but not reported 10(a) 39,955

69,533

NET CURRENT ASSETS 278,589

TOTAL NET ASSETS 278,589



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10 DEPENDANTS’ PROTECTION RESIDUAL FUND (continued)

(a) Provision for claims incurred but not reported

Provision for claims incurred but not reported is established for claims that have been incurredup to 16 September 2005 but which have not been reported to the Central Provident Fund Boardas at 31 December 2005. These claims may be admitted at a later date after 31 December 2005.

The amount of provision is in accordance with the actuarial report prepared by the Board’sindependent actuarial adviser.

11 FIXED ASSETS

Building DataConstruction- Renovation & Machinery & Furniture & Processing Other

Land Buildings in-Progress Improvement Equipment Fittings Equipment Assets Total

S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Cost

At 1 Jan 2005 54,756 138,272 297 11,181 57,687 899 31,555 310 294,957

Additions - - 5,339 2 678 244 2,598 - 8,861

Disposals - - - - (743) (3) (9,877) - (10,623)

Reclassifications - - (5,551) 5,288 263 - - - -

Adjustments - 240 - - - - - - 240

At 31 Dec 2005 54,756 138,512 85 16,471 57,885 1,140 24,276 310 293,435

AccumulatedDepreciation

At 1 Jan 2005 6,415 37,802 - 1,518 39,854 674 29,117 134 115,514

Depreciationfor the year 447 3,510 - 655 3,077 91 1,262 11 9,053

Disposals - - - - (543) (1) (8,705) - (9,249)

At 31 Dec 2005 6,862 41,312 - 2,173 42,388 764 21,674 145 115,318

Depreciationfor 2004 447 3,501 - 414 3,348 66 3,472 10 11,258

Net Book Value

At 31 Dec 2005 47,894 97,200 85 14,298 15,497 376 2,602 165 178,117

At 31 Dec 2004 48,341 100,470 297 9,663 17,833 225 2,438 176 179,443

Land includes freehold land and land with statutory grant of S$10,178,000.

Depreciation charges amounting to S$2,000 (2004: S$335,000), S$Nil (2004: S$3,000), S$Nil (2004:S$Nil) and S$2,000 (2004: S$11,000) were allocated to Home Protection Fund, Dependants’ ProtectionFund, Dependants’ Protection Residual Fund and MediShield Fund respectively. The remaining depreciation

charge of S$9,049,000 (2004: S$10,909,000) was accounted for under the Central Provident Fund.

Net book value of data processing equipment under finance lease is S$Nil (2004: S$388,000).



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12 INTANGIBLE ASSETS

Computer Intangible TotalSoftware Assets Under

DevelopmentS$’000 S$’000 S$’000

Cost

At 1 January 2005 3,349 5,027 8,376

Additions 94 1,759 1,853

Disposals - (4,950) (4,950)

Reclassification 522 (522) -

At 31 December 2005 3,965 1,314 5,279

Accumulated Amortisation

At 1 January 2005 1,360 - 1,360

Amortisation for the year 865 - 865

At 31 December 2005 2,225 - 2,225

Amortisation for 2004 738 - 738

Net Book Value

At 31 December 2005 1,740 1,314 3,054

At 31 December 2004 1,989 5,027 7,016

Intangible assets under development comprise software and development costs for various computerapplication systems.

The cost incurred for the information technology revamp projects of S$4.9m was written off and chargedto general and administrative expenditure during this financial year as there will be no future economicvalue for the work performed.



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13 LONG-TERM INVESTMENTS

2005 2004S$’000 S$’000

Special issues of Singapore Government securities 107,571,945 99,962,395

Advance deposits 4,615,991 3,765,451

112,187,936 103,727,846

The special issues of Singapore Government securities are floating rate bonds issued specifically tothe Board to meet its interest and other obligations. They do not have quoted market values. The interestrates for the securities are pegged to the rates at which the Board pays interest to its members.

The advance deposits are deposits placed with the Accountant-General through the Monetary Authorityof Singapore to purchase special issues of Singapore Government securities and meet members’withdrawal requirements. The interest rate for the advance deposits is pegged to the rate at which theBoard pays interest for the Ordinary Account.

Under the existing investment arrangement with the Government, the special issues of SingaporeGovernment securities and advance deposits placed with the Accountant-General through the MonetaryAuthority of Singapore are unique. The carrying amount of long-term investments approximates theirfair values.

14 STAFF LOANS

The total outstanding loans to staff are as follows:

2005 2004S$’000 S$’000

Amount receivable within 12 months 158 231

Amount receivable after 12 months 417 1,064

575 1,295

The amount receivable within 12 months is included in debtors and deposits. The staff loans arerepayable with interest at rates ranging from 4.25% per annum to 5% per annum by monthly instalmentsover a period of up to 25 years.

The carrying amount of staff loans approximates their fair values.



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15 INVESTMENTS

The investments comprise special issues of Singapore Government securities maturing within 12months. The interest rates for the securities are pegged to the rates at which the Board pays interestto its members.

The carrying amount of investments approximates their fair values.

16 DEBTORS AND DEPOSITS

2005 2004S$’000 S$’000

Debtors – scheme 7,586 31,178

Debtors – non scheme 4,343 6,655

Prepayments 2,161 2,197

Deposits paid 110 123

Staff loans 157 231

14,357 40,384

Debtors-scheme include all receivable amounts linked to the various CPF schemes.

Debtors and deposits other than prepayments are financial assets. The carrying amounts of thesefinancial assets approximate their fair values.

17 CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statement comprise bank deposits, cash and bankbalances with the following carrying amounts:

2005 2004S$’000 S$’000

Bank deposits 197,800 94,600

Cash and bank balances 160,775 99,570

Cash and cash equivalents as at 31 December 358,575 194,170

The carrying amounts of cash and cash equivalents approximate their fair values. The bank depositshave maturities of six months or less.



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18 CREDITORS, ACCRUALS AND PROVISIONS

2005 2004S$’000 S$’000

Creditors – scheme 100,372 47,411

Creditors – non scheme 19,009 16,311

Security, renovation and rental deposits received 2,807 2,462

Accrued expenses 3,450 3,541

Provisions 7,586 7,254

133,224 76,979

Creditors-scheme include all payable amounts linked to the various CPF schemes.

Creditors and accruals other than provisions are financial liabilities. The carrying amounts of thesefinancial liabilities approximate their fair values.

19 CONTRIBUTION PAYABLE TO GOVERNMENT CONSOLIDATED FUND

The contribution to the Government Consolidated Fund is required under section 3(a) of the StatutoryCorporations (Contributions to Consolidated Fund) Act (Cap. 319A). The contribution is computed basedon the guidelines specified by the Ministry of Finance.

The carrying amount of contribution payable to Government Consolidated Fund approximates itsfair value.



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20 AGENCY, CONSULTANCY AND DATA PROCESSING FEES

The Board handles agency work on behalf of the Ministry of Manpower, Ministry of Finance and otherministries on a cost recovery basis. These income included in agency, consultancy and data processingfees are as follows:

2005 2004S$’000 S$’000

Ministry of ManpowerCollection of:

Foreign Workers’ Levy 5,334 5,243Skills Development Levy 350 286

Ministry of FinanceAdministration of:

Economic Restructuring Shares 2,716 5,595Government Top-Up Schemes 1,871 398SingPass 1,859 1,691New Singapore Shares 369 455

Ministry of HealthAdministration of Medisave Scheme 1,567 1,506

Ministry of Community Development, Youth and SportsAdministration of Government Paid Maternity Leave Scheme 1,008 139

Ministry of EducationAdministration of Edusave Pupils Fund 471 231

21 RENT, SERVICE CHARGES AND CAR PARK RECEIPTS

Rental income is derived from the leasing of space for office use and food businesses. Such leasesare generally for a 3-year term. Shorter leases are also granted. The lease agreements provide fortermination should the tenants fail to perform or observe any of their covenants.

Future minimum lease receivable under non-cancellable operating leases as of 31 December are as follows:

2005 2004S$’000 S$’000

Within one year 10,346 9,952

After one year but not more than five years 14,012 9,569

24,358 19,521


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22 SALARIES AND STAFF BENEFITS

Included in salaries and staff benefits are the following items:

2005 2004S$’000 S$’000

Staff administering Central Provident FundEmployer’s CPF contribution 7,033 7,738Staff welfare and training 3,749 4,048Board members’ allowance 95 98

Staff administering Home Protection FundEmployer’s CPF contribution 184 186

Staff administering Dependants’ Protection FundEmployer’s CPF contribution 66 99

Staff administering Dependants’ Protection Residual FundEmployer’s CPF contribution 22 -

Staff administering MediShield FundEmployer’s CPF contribution 153 156

23 GENERAL AND ADMINISTRATIVE EXPENDITURE

Included in general and administrative expenditure are the following items:

2005 2004S$’000 S$’000

Audit fees 371 506

Entertainment expenses 13 14

Overseas travelling expenses 10 3


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24 FINANCIAL RISK MANAGEMENT

(a) Market risk

There is no market risk exposure for the Central Provident Fund.

The Insurance Funds are exposed to market risk due to the investments in fixed income securities,equities and derivatives. In diversifying the market risk, the funds have been allocated to differentasset classes in various markets.

(b) Interest rate risk

(i) Central Provident Fund

In the management of the interest rate risk of the Central Provident Fund, the interest ratesof the investments in special issues of Singapore Government securities are pegged to therates at which the Board pays interest to its members (i.e. 2.5% and 4%). The interest ratefor the advance deposits is pegged to the rate at which the Board pays interest for the OrdinaryAccount (i.e. 2.5%). These interest rates are affected by changes in the market interest ratesand reset every quarter.

The long-term investments of the Central Provident Fund are invested in non-tradeable specialissues of Singapore Government securities and advance deposits maturing after 2006, whichamount to S$112,187,936,000 (2004: S$103,727,846,000). Investments in special issues ofSingapore Government securities maturing in 2006 amount to S$7,790,279,000 (2004:S$8,500,000,000).

The Central Provident Fund also make placement of bank deposits with maturities of less than6 months, which amount to S$197,800,000 (2004: S$94,600,000). The effective interest ratesrange from 3.2% to 3.4% per annum (2004: 1.5% per annum).

(ii) Insurance Funds

The Insurance Funds are exposed to both fair value and cash flow interest rate risks as a resultof investments in fixed and variable rate fixed income securities. The interest rates on theseinvestments are determined based on prevailing market rates. The fair value interest rate riskis the risk that the value of a financial instrument will fluctuate due to changes in marketinterest rates. The cash flow interest rate risk is the risk that future cash flows of a financialinstrument will fluctuate because of changes in market interest rates.



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24 FINANCIAL RISK MANAGEMENT (continued)

(b) Interest rate risk (continued)

(ii) Insurance Funds (continued)

The investments in fixed income securities are as follows:

Amount Percentage of totalinvestment of the fund

2005 2004 2005 2004S$’000 S$’000

At Fair Value At Cost % %

Home Protection Fund 1,672,819 1,674,840 77.2 81.4

MediShield Fund 354,397 300,168 48.9 53.7

The carrying amounts of fixed income securities are as follows:

Years to maturity

Less than 1 Between 1 and 5 More than 52005 2004 2005 2004 2005 2004

S$’000 S$’000 S$’000 S$’000 S$’000 S$’000At Fair At Fair At FairValue At Cost Value At Cost Value At Cost

Denominated in S$

Home Protection Fund 40,759 32,237 481,278 401,214 361,050 445,779

MediShield Fund 3,705 4,904 91,455 76,564 96,949 77,390

Denominated in US$


MediShield Fund 48,759 29,219 17,381 8,270 44,934 48,483

Denominated in other currencies


MediShield Fund - - 23,135 14,794 28,079 40,544



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(b) Interest rate risk (continued)

(ii) Insurance Funds (continued)

The Insurance funds also place deposits with banks. The carrying amounts and effectiveinterest rates of the bank deposits are as follows:

Months to maturityEffective interest rates Less than 6 months

2005 2004 2005 2004% % S$’000 S$’000

Denominated in S$

Home Protection Fund 1.1 - 3.4 0.1 - 2.5 83,540 43,944

Dependants’ ProtectionResidual Fund/Dependants’ Protection Fund 3.4 0.1 - 2.5 345,900 86,531

MediShield Fund 1.1 - 3.4 0.1 - 2.5 18,478 9,653

Denominated in US$

Home Protection Fund 2.8 - 4.2 1.2 - 2.1 14,013 16,330

Dependants’ ProtectionResidual Fund/Dependants’ Protection Fund - 1.2 - 2.1 - 7,596

MediShield Fund 2.8 - 4.2 1.2 - 2.1 8,609 6,528

(c) Foreign exchange risk

There is no foreign exchange exposure for the Central Provident Fund.

The Insurance Funds are exposed to foreign exchange risks as a result of global investments. Where exposures are certain, these risks are hedged as appropriate.

8055/CPF AR 2005/GreenHouse/#133(270x270)/08.06.06/MAC E_M9 8055/C


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(d) Credit risk

The maximum exposure at the end of the financial year, in relation to each class of financial assets,is the carrying amount of those assets as indicated in the balance sheet.

(i) Central Provident Fund

Credit risk is minimised as the bulk of the Fund’s investments is in special issues of SingaporeGovernment securities.

(ii) Insurance Funds

Investments are in bonds, equities and cash equivalents of high credit ratings. There is nosignificant concentration of credit risk.

(e) Liquidity risk

In the management of liquidity risk, the Board monitors and maintains a level of cash and bank balances deemed adequate by management to finance its operations and mitigate the effects

of fluctuations in cash flows.

25 FUTURE CAPITAL EXPENDITURE

Capital expenditure approved by the Board but not provided for in the financial statements is as follows:

2005 2004S$’000 S$’000

Amount approved and contracted for - 31,838

Amount approved but not contracted for 92,725 29,368

92,725 61,206



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26 RELATED PARTY TRANSACTIONS

(a) Transactions with Government ministries

The Board is a statutory board established under the Central Provident Fund Act (Cap.36)(Note 1). As a statutory board, all Government ministries including statutory boards under theirpurview are deemed related parties to the Board.

Some of the more significant transactions between the Board and its supervisory ministry, Ministryof Manpower and other ministries are listed below:

(i) Agency fees

Agency fees are collected for agency work handled on behalf of the Ministry of Manpower,Ministry of Finance and other ministries. The details of these transactions are shown in

Note 20.

(ii) Placement of advance deposits and redemption of special issues of Singapore Government securities

2005 2004S$’000 S$’000

Placement of advance deposits 16,250,369 17,793,395

Redemption of special issues ofSingapore Government securities 8,500,000 9,490,000

(b) Balances due from/to Government ministries

The balances due from/to the Government ministries including statutory boards under their purvieware for different schemes and projects. These balances are not offset as there is no intention tosettle on a net basis.

2005 2004S$’000 S$’000

(i) Balances due from:Ministry of Finance 1,210 4,141Ministry of Manpower 1,130 1,054Ministry of Community Development,

Youth and Sports 137 633Ministry of National Development 131 28,602Others 512 613

(ii) Balances due to:Ministry of Finance 2,146 2,201Ministry of Manpower 1,367 1,912Ministry of National Development 15,874 1,164Others 715 761



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26 RELATED PARTY TRANSACTIONS (continued)

(c) Key management compensation

2005 2004S$’000 S$’000

Salaries and other short-term employee benefits 2,694 2,492

Post employment benefits 116 134

27 NEW ACCOUNTING STANDARDS

FRS 40 Investment property

The Board will adopt FRS 40 on 1 January 2007, which is the effective date of the Standard.

Currently, properties which are not owner-occupied are accounted for under FRS16, Property, Plant andEquipment as set out in Note 11. These properties will be reclassified from buildings to investmentproperties on 1 January 2007. The net book value of these properties as at 31 December 2005is S$16,568,000.

28 APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the Board on 28 March 2006.


10 Annexes 7/3/06 12:29 PM Page 1

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Annexes


Annex ARates of CPF Contributions, 1955 – 2005

Contribution Rate (%) Credited Into

Starting Employee’s By By Ordinary Special Medisave Total Ordinary Wage

Age Employer Employee Account Account Account Ceiling ($)

Jul 1955 – 5 5 – – – 10 500

Sep 1968 – 6.5 6.5 – – – 13 2,307.69

Jan 1970 – 8 8 – – – 16 1,875

Jan 1971 – 10 10 – – – 20 1,500

Jul 1972 – 14 10 – – – 24 1,500

Jul 1973 – 15 11 – – – 26 1,500

Jul 1974 – 15 15 – – – 30 1,500

Jul 1975 – 15 15 – – – 30 2,000

Jul 1977 – 15.5 15.5 30 1 – 31 2,000

Jul 1978 – 16.5 16.5 30 3 – 33 3,000

Jul 1979 – 20.5 16.5 30 7 – 37 3,000

Jul 1980 – 20.5 18 32 6.5 – 38.5 3,000

Jul 1981 – 20.5 22 38.5 4 – 42.5 3,000

Jul 1982 – 22 23 40 5 – 45 3,000

Jul 1983 – 23 23 40 6 – 46 3,000

Nov 1983 – 23 23 40 6 – 46 4,000

Apr 1984 – 23 23 40 – 6 46 4,000

Jul 1984 – 25 25 40 4 6 50 5,000

Jul 1985 – 25 25 40 4 6 50 6,000

Apr 1986 – 10 25 29 – 6 35 6,000

Jul 1988 55 years & below 12 24 30 – 6 36 6,000

Above 55 – 60 years 11 20 25 – 6 31 6,000

Above 60 – 65 years 9 19 22 – 6 28 6,000

Above 65 years 8 18 20 – 6 26 6,000

Jul 1989 55 years & below 15 23 30 2 6 38 6,000

Above 55 – 60 years 12 16 22 – 6 28 6,000

Above 60 – 65 years 8 13 15 – 6 21 6,000

Above 65 years 6 11 11 – 6 17 6,000

Jul 1990 55 years & below 16.5 23 30 3.5 6 39.5 6,000

Above 55 – 60 years 12.5 12.5 19 – 6 25 6,000

Above 60 – 65 years 7.5 7.5 9 – 6 15 6,000

Above 65 years 5 5 4 – 6 10 6,000


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Annex ARates of CPF Contributions, 1955 – 2005 (continued)

Saving for Retirement ... Annexes / 81



Age Employer Employee Account Account Account Ceiling($)

Jul 1991 55 years & below 17.5 22.5 30 4 6 40 6,000

Above 55 – 60 years 12.5 12.5 19 – 6 25 6,000

Above 60 – 65 years 7.5 7.5 9 – 6 15 6,000

Above 65 years 5 5 4 – 6 10 6,000

Jul 1992 35 years & below 18 22 30 4 6 40 6,000

Above 35 – 55 years 18 22 29 4 7 40 6,000

Above 55 – 60 years 12.5 12.5 18 – 7 25 6,000

Above 60 – 65 years 7.5 7.5 8 – 7 15 6,000

Above 65 years 5 5 3 – 7 10 6,000

Jul 1993 35 years & below 18.5 21.5 30 4 6 40 6,000

Above 35 – 45 years 18.5 21.5 29 4 7 40 6,000

Above 45 – 55 years 18.5 21.5 28 4 8 40 6,000

Above 55 – 60 years 7.5 12.5 12 – 8 20 6,000

Above 60 – 65 years 7.5 7.5 7 – 8 15 6,000

Above 65 years 5 5 2 – 8 10 6,000

Jul 1994 35 years & below 20 20 30 4 6 40 6,000

Above 35 – 45 years 20 20 29 4 7 40 6,000

Above 45 – 55 years 20 20 28 4 8 40 6,000

Above 55 – 60 years 7.5 12.5 12 – 8 20 6,000

Above 60 – 65 years 7.5 7.5 7 – 8 15 6,000

Above 65 years 5 5 2 – 8 10 6,000

Jan 1999 35 years & below 10 20 24 – 6 30 6,000

Above 35 – 45 years 10 20 23 – 7 30 6,000

Above 45 – 55 years 10 20 22 – 8 30 6,000

Above 55 – 60 years 4 12.5 8.5 – 8 16.5 6,000

Above 60 – 65 years 2 7.5 1.5 – 8 9.5 6,000

Above 65 years 2 5 – – 7 7 6,000


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Annex ARates of CPF Contributions, 1955 – 2005 (continued)



Age Employer Employee Account Account Account Ceiling ($)

Apr 2000 35 years & below 12 20 24 2 6 32 6,000

Above 35 – 45 years 12 20 23 2 7 32 6,000

Above 45 – 55 years 12 20 22 2 8 32 6,000

Above 55 – 60 years 4.5 12.5 9 – 8 17 6,000

Above 60 – 65 years 2.5 7.5 2 – 8 10 6,000

Above 65 years 2.5 5 – – 7.5 7.5 6,000

Jan 2001 35 years & below 16 20 26 4 6 36 6,000

Above 35 – 45 years 16 20 23 6 7 36 6,000

Above 45 – 55 years 16 20 22 6 8 36 6,000

Above 55 – 60 years 6 12.5 10.5 – 8 18.5 6,000

Above 60 – 65 years 3.5 7.5 2.5 – 8.5 11 6,000

Above 65 years 3.5 5 – – 8.5 8.5 6,000

Oct 2003 35 years & below 13 20 22 5 6 33 6,000

Above 35 – 45 years 13 20 20 6 7 33 6,000

Above 45 – 55 years 13 20 18 7 8 33 6,000

Above 55 – 60 years 6 12.5 10.5 – 8 18.5 6,000

Above 60 – 65 years 3.5 7.5 2.5 – 8.5 11 6,000

Above 65 years 3.5 5 – – 8.5 8.5 6,000

Jan 2004 35 years & below 13 20 22 5 6 33 5,500

Above 35 – 45 years 13 20 20 6 7 33 5,500

Above 45 – 55 years 13 20 18 7 8 33 5,500

Above 55 – 60 years 6 12.5 10.5 – 8 18.5 5,500

Above 60 – 65 years 3.5 7.5 2.5 – 8.5 11 5,500

Above 65 years 3.5 5 – – 8.5 8.5 5,500

Jan 2005 to 35 years & below 13 20 22 5 6 33 5,000

Dec 2005 Above 35 – 45 years 13 20 20 6 7 33 5,000

Above 45 – 50 years 13 20 18 7 8 33 5,000

Above 50 – 55 years 11 19 15 7 8 30 5,000

Above 55 – 60 years 6 12.5 10.5 – 8 18.5 5,000

Above 60 – 65 years 3.5 7.5 2.5 – 8.5 11 5,000

Above 65 years 3.5 5 0 – 8.5 8.5 5,000



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CPF Interest Rate Per Annum (%)

Year Ordinary Account Medisave Account Special & Retirement Accounts

Jan – Jun 1996 3.52 3.52 4.77

Jul – Dec 1996 3.48 3.48 4.73

Jan – Jun 1997 3.48 3.48 4.73

Jul – Dec 1997 3.48 3.48 4.73

Jan – Jun 1998 3.48 3.48 4.73

Jul – Dec 1998 4.29 4.29 5.79*

Jan – Jun 1999 4.41 4.41 5.91

Jul – Dec 1999 2.50 2.50 4.00

Jan – Dec 2000 2.50 2.50 4.00

Jan – Sep 2001 2.50 2.50 4.00

Oct – Dec 2001 2.50 4.00** 4.00

Jan – Dec 2002 2.50 4.00 4.00

Jan – Dec 2003 2.50 4.00 4.00

Jan – Dec 2004 2.50 4.00 4.00

Jan – Dec 2005 2.50 4.00 4.00

Annex BCPF Interest Rates, 1996 – 2005

* From 1 July 1998, the Special and Retirement Accounts earn additional interest of 1.5 percentage points above the CPF interest rate paid for Ordinary and Medisave Accounts.** From 1 October 2001, the Medisave, Special and Retirement Accounts earn additional interest of 1.5 percentage points above the CPF interest rate paid for the Ordinary Account.


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Year End Number of Members Total Contribution Total Balances

(‘000) ($’000) ($’000)

1996 2,742 14,623,003 72,566,560

1997 2,782 15,873,794 79,657,446

1998 2,803 15,999,822 85,276,838

1999 2,828 12,826,637 88,396,851

2000 2,880 14,092,833 90,298,251

2001 2,923 18,322,270 92,221,220

2002 2,963 16,165,738 96,422,614

2003 2,978 15,869,972 103,539,568

2004 3,018 15,320,105 111,873,821

2005 3,049 16,105,105 119,787,538

Annex CMembership, Contributions & Members’ Balances, 1996 – 2005


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Annex DCPF Contributions in respect of Private Sector Employees (From 1 January to 31 December 2005)

Age of Employee

50 Years & Below Above 50 – 55 Years Above 55 – 60 Years Above 60 – 65 Years Above 65 Years

Total amount of Contributions Amount recoverablethe employee’s payable by the from the employee’swages for the employer for the wages for thecalendar month calendar month calendar month

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Not exceeding $50 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil

Exceeding $50 but 13% of the Nil 11% Nil 6% Nil 3.5% Nil 3.5% Nilnot exceeding $500 employee’s total

wages for the month

Exceeding $500 but a. 13% of the a. Nil 11% Nil 6% Nil 3.5% Nil 3.5% Nilnot exceeding $750 employee’s total

wages for themonth; and

b. 0.6 of the b. 0.6 of the 0.57 0.57 0.37 0.37 0.22 0.22 0.15 0.15

difference between difference betweenthe employee’s total the employee’s totalwages for the month wages for the monthand $500. and $500.

Exceeding $750 a. 33% of the a. 20% of the 30% 19% 18.5% 12.5% 11% 7.5% 8.5% 5%

employee’s ordinary employee’s ordinary max max max max max max max maxwages, subject to a wages, subject to a $1,500 $950 $925 $625 $550 $375 $425 $250

maximum of maximum of$1,650; and $1,000; and

b. 33% of the b. 20% of the 30% 19% 18.5% 12.5% 11% 7.5% 8.5% 5%

additional wages additional wagespayable to payable tothe employee the employee

For employees in the above 50 – 55, above 55 – 60, above 60 – 65, and above 65 age groups, replace the figures underlined in columns (2) and (3) with the corresponding figures in column (4) to (11).



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Annex ECPF Contributions in respect of Government Pensionable Employees (From 1 January to 31 December 2005)

Age of Employee



(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Exceeding $0.01 a. 9.75% of the a. Nil 8.25% Nil 4.5% Nil 2.625% Nil 2.625% Nilemployee’s ordinarywages excludingthe non-pensionablevariable paymentand non-pensionablecomponent; and

b. 13% of the b. Nil 11% Nil 6% Nil 3.5% Nil 3.5% Nilnon-pensionable max max max maxvariable payment $550 $300 $175 $175

and non-pensionablecomponent for themonth subject to amaximum of $650; and

c. a further 15% c. 15% of the 14.25% 14.25% 9.375% 9.375% 5.625% 5.625% 3.75% 3.75%

of the employee’s employee’s ordinaryordinary wages wages excluding theexcluding the non-pensionablenon-pensionable variable payment andvariable payment non-pensionableand non-pensionable component; andcomponent; and

d. 20% of the d. 20% of the non- 19% 19% 12.5% 12.5% 7.5% 7.5% 5% 5%

non-pensionable pensionable variable max max max max max max max maxvariable payment payment and $950 $950 $625 $625 $375 $375 $250 $250

and non-pensionable non-pensionablecomponent for the component for themonth subject to month subject to aa maximum of maximum of$1,000; and $1,000; and

e. 33% of any e. 20% of any 30% 19% 18.5% 12.5% 11% 7.5% 8.5% 5%

additional additionalwages payable wages payable




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Annex FCPF Contributions in respect of Government Non-pensionable Employees, Employees in Designated Statutory Authorities andAided Schools (From 1 January to 31 December 2005)

Age of Employee



(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Not exceeding $500 a. 13% of the a. Nil 11% Nil 6% Nil 3.5% Nil 3.5% Nilemployee’s ordinary wages for themonth; and

b. 33% of any b. 20% of any 30% 19% 18.5% 12.5% 11% 7.5% 8.5% 5%

additional additional wages payable wages payable

Exceeding $500 but a. 13% of the a. Nil 11% Nil 6% Nil 3.5% Nil 3.5% Nilnot exceeding $750 employee’s

ordinary wages;

b. 0.6 of the b. 0.6 of the 0.57 0.57 0.37 0.37 0.22 0.22 0.15 0.15

difference between difference betweenthe employee’s the employee’sordinary wages and ordinary wages and$500; and $500; and

c. 33% of any c. 20% of any 30% 19% 18.5% 12.5% 11% 7.5% 8.5% 5%


Exceeding $750 a. 13% of the a. Nil 11% Nil 6% Nil 3.5% Nil 3.5% Nilemployee’s ordinary max max max maxwages, subject to a $550 $300 $175 $175

maximum of $650;

b. a further 20% of b. 20% of the 19% 19% 12.5% 12.5% 7.5% 7.5% 5% 5%

the employees’ employee’s ordinary max max max max max max max maxordinary wages, wages, subject to a $950 $950 $625 $625 $375 $375 $250 $250

subject to a maximum maximum ofof $1,000; and $1,000; and

c. 33% of any c. 20% of any 30% 19% 18.5% 12.5% 11% 7.5% 8.5% 5%





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Annex HDistribution of CPF Members’ Balances by Age Group and Sex as at 31 December 2005

Male Female Not Specified Total

Age Groups Balances Balances Balances Balances

(Years) Number ($’000) Number ($’000) Number ($’000) Number ($’000)

Up to 20 40,971 32,244 43,438 51,780 – – 84,409 84,023

>20 – 25 99,474 490,088 101,339 955,587 13 135 200,826 1,445,810

>25 – 30 123,146 2,638,516 126,161 3,580,288 58 1,361 249,365 6,220,165

>30 – 35 150,973 6,287,034 151,842 6,869,254 37 410 302,852 13,156,698

>35 – 40 175,856 9,184,559 169,735 8,228,565 50 388 345,641 17,413,512

>40 – 45 228,109 11,860,255 194,348 9,256,924 208 1,426 422,665 21,118,605

>45 – 50 216,102 13,231,883 186,486 9,383,994 192 1,384 402,780 22,617,261

>50 – 55 172,324 12,752,755 149,447 7,802,476 152 690 321,923 20,555,921

>55 – 60 124,464 6,828,804 113,237 4,127,146 115 159 237,816 10,956,109

Above 60 219,478 4,041,390 233,499 2,125,034 87 235 453,064 6,166,659

Unspecified 17,571 35,082 4,279 10,031 5,361 7,662 27,211 52,774

All Groups 1,568,468 67,382,610 1,473,811 52,391,079 6,273 13,850 3,048,552 119,787,538

Figures include self-employed persons.Total may not add up due to rounding.

Annex GWithdrawals under Section 15 and Section 25 of the CPF Act – 2005


2005

Ground for Withdrawal Number Amount ($’m)

55 Years and Above 357,255 1,837.7

Leaving Singapore and West Malaysia 3,092 216.1

Physical Incapacity 646 18.6

Unsound Mind 90 2.8

Death 25,225 245.7

Malaysian Citizen (Leaving Singapore) 6,773 119.4

TOTAL 393,081 2,440.3


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Annex IDistribution of Active CPF Members by Regrossed Balances* and Age Group as at 31 December 2005

Figures exclude all self-employed persons.Total may not add up due to rounding.*Balances include amounts withdrawn under Investment, Education, Residential Properties, Non-Residential Properties and Public Housing Schemes as at end of period.

AGE GROUP (YEARS) TOTAL

Balance Group Above Not Active Balance

($) Up to 20 >20 – 25 >25 – 30 >30 – 35 >35 – 40 >40 – 45 >45 – 50 >50 – 55 >55 – 60 60 Specified Members ($’000)

Below 1,000 20,095 6,850 3,379 2,603 1,512 873 388 158 206 1,269 1 37,334 14,500

1,000 to below 2,000 5,389 6,562 2,946 2,217 1,278 717 303 167 363 1,920 3 21,865 32,414

2,000 to below 3,000 2,949 6,465 2,421 1,823 1,107 606 264 168 406 1,804 5 18,018 44,721

3,000 to below 4,000 1,711 6,146 2,235 1,411 832 455 288 181 429 1,645 – 15,333 53,458

4,000 to below 5,000 1,121 5,318 2,244 1,090 681 436 286 212 396 1,570 2 13,356 59,981

5,000 to below 6,000 745 4,655 2,129 897 564 375 281 219 397 1,345 4 11,611 63,764

6,000 to below 7,000 573 4,224 2,010 893 507 362 292 248 336 1,129 – 10,574 68,656

7,000 to below 8,000 363 3,932 2,139 781 564 387 312 250 341 1,114 – 10,183 76,239

8,000 to below 9,000 283 3,754 2,076 816 502 326 291 269 332 996 – 9,645 81,932

9,000 to below 10,000 179 3,412 2,050 731 492 358 346 266 281 901 – 9,016 85,610

10,000 to below 20,000 524 25,578 21,447 6,860 4,648 3,880 3,679 3,049 3,303 7,301 1 80,270 1,189,875

20,000 to below 30,000 24 13,494 22,548 6,992 4,871 4,419 4,095 3,368 3,341 6,373 – 69,525 1,734,646

30,000 to below 40,000 4 7,838 21,664 7,365 4,974 4,849 4,568 3,429 3,677 5,595 – 63,963 2,232,741

40,000 to below 50,000 – 3,800 20,599 8,198 5,074 5,131 4,704 3,533 3,243 4,684 – 58,966 2,651,495

50,000 to below 60,000 2 1,499 18,856 9,346 5,323 5,216 4,696 3,563 3,200 4,137 – 55,838 3,068,264

60,000 to below 70,000 1 563 16,105 10,602 5,429 5,145 4,586 3,492 3,193 3,733 – 52,849 3,432,912

70,000 to below 80,000 1 203 12,886 11,930 5,942 4,937 4,473 3,498 3,326 3,099 – 50,295 3,769,567

80,000 to below 90,000 1 76 10,132 13,541 6,181 5,190 4,330 3,362 3,298 2,386 – 48,497 4,122,185

90,000 to below 100,000 – 22 7,188 14,241 6,563 5,065 4,359 3,208 3,212 2,105 – 45,963 4,365,249

100,000 to below 150,000 – 21 12,905 63,118 41,016 28,964 21,322 14,772 15,896 5,551 – 203,565 25,210,676

150,000 & above 1 2 1,073 44,609 97,423 115,425 110,283 84,026 35,712 5,848 – 494,402 148,405,172

All Groups 33,966 104,414 189,032 210,064 195,483 193,116 174,146 131,438 84,888 64,505 16 1,381,068 200,764,059



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Annex JDistribution of Active CPF Members by Monthly Wage Level and Age Group as at 31 December 2005

Figures exclude all self-employed persons.

AGE GROUP (YEARS)

Monthly

Wage Level Above Not

($) Up to 20 >20 – 25 >25 – 30 >30 – 35 >35 – 40 >40 – 45 >45 – 50 >50 – 55 >55 – 60 60 Specified Total

<200 7,736 2,862 986 890 931 1,053 1,047 766 608 646 – 17,525

200 - 299 4,699 1,779 618 464 588 805 946 843 578 900 – 12,220

300 – 399 3,962 1,767 693 628 790 1,100 1,282 1,054 814 1,131 – 13,221

400 – 499 3,172 1,830 774 683 910 1,457 1,612 1,658 1,293 1,956 – 15,345

500 – 599 2,789 2,881 1,837 1,932 2,650 3,872 4,601 4,477 3,928 5,503 4 34,474

600 – 799 3,869 4,864 3,852 4,652 6,488 9,264 10,255 8,545 7,135 12,295 11 71,230

800 – 999 2,692 5,389 4,014 4,395 5,778 8,310 9,303 8,073 5,949 8,972 1 62,876

1,000 – 1,499 3,749 23,780 20,296 17,260 18,058 22,510 23,832 20,230 14,329 11,878 – 175,922

1,500 – 1,999 1,036 28,948 35,216 26,682 22,850 23,478 21,071 15,955 10,398 5,827 – 191,461

2,000 – 2,499 189 18,195 37,889 29,047 23,567 22,055 19,077 13,821 7,980 3,881 – 175,701

2,500 – 2,999 24 7,305 32,385 26,815 20,623 17,885 15,133 10,781 5,956 2,442 – 139,349

3,000 – 3,499 18 2,457 20,591 23,235 17,248 14,736 12,021 8,380 4,421 1,833 – 104,940

3,500 – 3,999 11 1,073 11,637 17,890 13,244 10,779 8,285 5,701 3,011 997 – 72,628

4,000 – 4,499 3 481 6,834 13,896 11,121 9,154 7,082 4,563 2,623 877 – 56,634

4,500 – 4,999 1 251 3,709 10,486 8,549 6,569 5,383 3,568 1,936 725 – 41,177

>4,999 4 552 7,700 31,108 42,086 40,088 33,216 23,023 13,929 4,642 – 196,348

Unspecified 12 – 1 1 2 1 – – – – – 17

All Groups 33,966 104,414 189,032 210,064 195,483 193,116 174,146 131,438 84,888 64,505 16 1,381,068




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