What Is the CPF SA Closure?

The CPF Special Account (SA) closure refers to the legislative change that took effect on 1 January 2025, under which the SA of CPF members aged 55 and above was permanently closed. Prior to this, the SA earned 4% per annum — one of the best guaranteed returns available to Singapore residents. The closure was part of CPF reforms announced by Deputy Prime Minister Lawrence Wong at Budget 2024.

Members below age 55 retain their SA as normal. Only those who had already reached 55 by 1 January 2025, or who turned 55 on or after that date, are affected by the closure. As at Q1 2025, this change affects approximately 900,000 CPF members aged 55 and above.

Why Was the SA Closed?

The government’s rationale was to simplify the CPF structure for retirement-age members. Once a member reaches 55, their Retirement Account (RA) is created and funds from the SA (and OA) are transferred to meet the applicable retirement sum. The SA’s original purpose — to accumulate long-term retirement savings at higher interest — is considered fulfilled at this stage.

Another reason cited was to prevent “CPF SA Shielding”, a strategy where members invested SA funds in low-risk instruments like endowment plans just before age 55 to prevent the savings from being swept into the RA. The CPF Board estimated this loophole reduced effective retirement payouts for members who used it.

What Happens to Your SA Savings?

Upon SA closure, all SA balances were transferred to the member’s Retirement Account (RA) up to the Full Retirement Sum (FRS) for 2025 (S$213,000 for those turning 55 in 2025). Any excess beyond the FRS was transferred to the Ordinary Account (OA), where it earns 2.5% per annum.

Key points about the transfer (as at Q1 2025):

• RA balances earn a higher interest rate than OA — 4% p.a. floor plus additional interest for balances up to S$30,000
• Members can still top up their RA under the Retirement Sum Topping-Up Scheme (RSTU) for tax relief
• CPF Investment Scheme (CPFIS) investments held under SA are unaffected — they remain in the CPFIS-SA sub-account and continue earning their respective investment returns

Impact on CPF LIFE Payouts

The SA closure does not reduce your CPF LIFE payouts if your RA is fully topped up to the Enhanced Retirement Sum (ERS). In fact, higher RA balances result in higher monthly CPF LIFE payouts. For 2025, the ERS is set at S$426,000 — members who top up to this level receive the maximum monthly CPF LIFE payout (estimated S$3,300–S$4,400/month depending on plan and age at commencement).

Members who relied on SA balances earning 4% to boost their retirement pot may need to reconsider their strategy. The OA earns only 2.5%, so there is an effective interest rate reduction on the excess SA funds transferred to OA.

Strategies After SA Closure

Singapore investors and retirees have several options to optimise their CPF position after the SA closure:

• Top up RA under RSTU: Cash top-ups to your own or a loved one’s RA attract dollar-for-dollar tax relief of up to S$8,000 per year (as at 2025 rules). Explore CPF Retirement Sum Top-Up (RSTU) for full details.
• CPFIS investing: SA balances already invested in CPFIS-SA remain invested. New funds in OA can be invested via CPFIS-OA in approved instruments including Singapore dividend stocks and ETFs.
• SRS contributions: Members seeking a 4%+ return on retirement savings can consider the Supplementary Retirement Scheme (SRS), which defers income tax and allows investment in SGX-listed securities.
• Fixed deposits and SSBs: For members who want capital-safe returns outside CPF, Singapore Savings Bonds (SSB) and fixed deposits remain options.

For further background on how CPF structures fit into retirement planning, see the TKN Retirement Calculator.