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● If you are a newly minted Singapore Permanent Resident (SPR) or an employer hiring one, take note. Aside from all the perks you will enjoy as a newly minted SPR, like immigration and job stability and access to low-cost education and housing, you will get access to the Central Provident Fund (CPF). Although you may feel the pinch of a lower take-home pay due to mandatory CPF contributions, you will actually be better off monetarily. Why you may ask? Read on to learn more about CPF fundamentals, contributions rates and more. CPF is a social security system in Singapore managed by the CPF board. According to a  on the financial planning attitudes of Singaporeans, about three out of ten, aged between 30 and 39, had not started planning for future financial needs! We have CPF in place because it helps us and reduces our nation’s risk of depending on a shrinking working population to support a growing number of elderly residents. CPF, among other things, helps to maintain homeownership rates in Singapore, as these funds can be used to pay for home purchases. Lastly, CPF helps us such as medical insurance, hospitalisation expenses, etc. CPF contributions go into three accounts, but when you hit 55, the fourth account, the Retirement Account, is opened. CPF is Singapore’s compulsory social savings program designed to help Singapore Citizens (SC) and Singapore Permanent Residents (SPRs) ensure a secure retirement and cover essential costs like housing, children’s education, and medical expenses. Currently, as follows: Upon completing the application process for your SPR status, Form 5/5A will inform you of your successful application. The date on the form marks the start of your PR status in Singapore. If you are currently employed, this date also signifies when your employer must start making CPF contributions. Consequently, you will notice a significant portion of your salary being directed into your newly established CPF accounts, with up to 20% of your earnings contributed by you as an employee. Adapting to an immediate reduction of up to 20% from your take-home pay may be painful. However, you will also benefit from an overall increase in your total salary due to employer CPF contributions, which can be as high as 17% of your salary. On the other hand, employers will face an additional cost of up to 17% for hiring the same employee. Functionally, there is little to no difference in CPF for SCs and SPRs, except for the difference in contribution rates at the start. There is a two-year acclimatization period for both employees and employers, during which CPF contribution rates start lower and gradually increase to the standard rates by the third year. The first full year begins on the date of PR approval and concludes on the last day of the anniversary month of the PR approval. The second and third years follow this timeline, starting on the first day of the anniversary month of SPR approval. For instance, if your PR status is approved on 6 June 2024, your first year of CPF contributions will commence on that date and end on 30 June 2025. The second year will begin on 1 July 2025 and end on 31 June 2026. Finally, standard CPF contributions will start from the third year, beginning 1 July 2026. If you are a new PR, both employers and employees contribute to CPF at a lower rate, known as the graduated employer/graduated employee (G/G) rate: If your employer wants to contribute at a higher CPF rate for you, referred to as the full employer / graduated employee rate, both parties must submit a joint application. If you want to contribute at a higher CPF rate, referred to as the full employee/graduated employer rate (F/G), you can voluntarily top up your CPF through the Retirement Sum Top-Up Scheme (RSTU). Suppose both you and your employer decide to contribute at a higher CPF rate, known as the full employee / full employer rate (F/F) from the first year. In that case, you will need to apply jointly for the full employer contribution and top up your CPF through the RSTU for the full employee contribution. As previously mentioned, once you have fully transitioned by your third year, you will no longer be considered a newly initiated Permanent Resident. At this point, you will be required to pay the full contribution rate applicable to all PRs and Singapore Citizens. Unfortunately, as a Singapore Citizen or permanent Resident, you cannot legally reduce your CPF contributions. But do note that there is a employers and employees can contribute. You can read about it here: If you were wondering, you could use this to calculate the monthly CPF contributions applicable for employees in the private sector and for government employees who are not eligible for pensions: If you intend to permanently leave Singapore and West Malaysia and give up your PR status, you can apply to the CPF Board to withdraw your savings. This application can be submitted either by post or in person. Upon approval, your funds will be transferred via interbank GIRO to your Singapore bank account or an overseas bank account. Be aware that any outstanding tax liabilities will be deducted from your CPF savings before the withdrawal. If you have investments under the CPF Investment Scheme (CPFIS), your CPFIS Account will be closed, and the investments will be transferred to your Central Depository (CDP) account and liquidated. You have the option to terminate your CPF LIFE plan and receive the remaining unused premiums or continue in the CPF LIFE Scheme to receive monthly payouts to your Singapore bank account. If you miss Singapore and decide to return and regain your PR status, you must refund the full amount withdrawn, including accrued interest, to CPF.