Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Sunday, 17 May 2015

Retirement Sum Top Up Versus Voluntary Contribution

Today's topic will be a more complex one because it covers 2 CPF schemes.
These 2 CPF schemes are complex because there weren't enough information on the CPF website that allowed me (or us) to understand it fully.
In fact, I must thank one of our readersla papillion, for pointing out that there are 2 different schemes for CPF top up, if not I would have assumed that "Voluntary Top Up" was a new scheme used to replace "Retirement Sum Top Up", so thank you la papillion.

This is the link to the article that lead to this post: LINK

We have emailed CPF Board to clarify the difference between the 2 schemes.
The difference were not very obviously shown on the CPF website.
As such, we have dedicated this post for it.

Topic Retirement Sum Top Up Scheme Voluntary Contribution Scheme
$ Goes To Special Account (age less than 55)
Retirement Account (age 55 and above)
Ordinary, Special & Medisave Account*
Uses Retirement only. Funds cannot be used
for investments etc
Funds can be used for other CPF schemes
Tax Contributions are tax deductible #Non-tax deductible except if all
contributions goes into Medisave Account
Interest SA 4% OA 2.5%, SA & MA 4%
Contribution Via Cash or CPF transfer** Via Cash
Contribution Limit Until you reach your minimum sum or
your NOKs reach theirs'
Annual CPF contribution Limit or
Medisave Contribution Ceiling

*Money goes into OA, SA & MA based on a fixed percentage that is determined by your age.
There is a Voluntary Contribution Calculator on the CPF website.
However, we have done the work for you, and the contribution rates are posted HERE

#There are 2 voluntary schemes, one is fixed contributions to 3 CPF Accounts (OA, SA & MA), which are non-tax deductible. Another is where all contributions goes into your MA, which is tax-deductible.
However, if you are a self-employed, there are other tax-related exemptions for you that are beyond the scope of this post.

**You may transfer your excess CPF funds to your next-of-kin if you have met the current prevailing Retirement Minimum Sum (RMS) if you are age below 55.
If you are age above 55, you may transfer your excess CPF funds above your RMS to your next-of-kin's CPF.
Next-of-kin are parents, spouse, siblings, grandparents, parents-in-law, & grandparents-in-law.

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  1. Hi,

    It is so not true that VC to 3 acct is not tax deductible! I've evidence, both from official website and empirical evidence (from me having actually getting tax rebates last yr) that contradicts your conclusions.

    I'm a self employed, btw. Check up your facts again pls.

    1. Hi la papillion,

      I have checked the information.
      Above is the link to IRAS. Under the 'Who can Claim' section, it states that "Voluntary contributions that you have made in excess of the compulsory contributions under CPF Act."
      Thus the VC to 3accounts are not tax deductible.
      This is also confirmed by the CPF website:
      However, the above information is for employees,

      If you have gotten information that shows different from the above, would you mind sharing with me the link so that I can read up and do more research onto this topic?
      I agree that this topic is very complicated and very misleading, which might make me show the wrong information - which I consistently try to avoid.
      So if you have any information that can help our readers, please do share :)

      I believe that employee or self-employed do not get tax deductible for VC.
      However, self-employed are also required to make compulsory CPF contribution - only to MA, if income hits a certain level.
      While the rest of the contributions to OA & SA is made usually via the Retirement Sum Top Up Scheme

  2. Hi Cheez,

    You're right. Those are for employers. For self employed without the compulsory CPF contribution (except for MS), this is the relevant link:

    You can look at example 1 for the self employed person. The tax relief is the lower of 36% of his net trade income in 2014 (37% in 2016) and the annual CPF contribution limit (30.6k for 2014, 31.45k for 2015). But you must satisfy certain conditions. I implore you to look at my link again:, under C: Voluntary contribution to CPF!!

    I might not know much about CPF regarding employed, but I better know my stuff for self employed because I'm one!