From next year onwards, the number of CPF Life annuity schemes will be reduced from four to two options.

This was announced by Manpower Minister Tharman Shanmugaratnam during Parliament today.

The simpler CPF LIFE scheme will be effective from January 1, 2013.

The new Standard Plan combines the best features of the two most popular plans (Balanced and Plus Plans), and will be the default CPF Life plan.

The Standard Plan provides members with higher monthly payouts while preserving flexibility to use their Retirement Account (RA) monies for housing until 65 years old.

Members also leave a bequest for their beneficiaries under the Standard Plan.

There will be no change to the Basic Plan. It will be retained for members who prefer a higher bequest and lower monthly payouts. This plan also provides flexibility for members who wish to use their RA savings for housing after 65 years old.

The Income Plan, the least popular plan (only 3 per cebt of members who opted into CPF Life selected this option) which does not leave a bequest for beneficiaries, will be dropped.

The Standard Plan, with higher monthly payouts and a bequest, should meet the needs of most members and will serve as the default plan.

The Basic Plan will continue to cater to members who prefer a higher bequest and are willing to accept lower monthly payouts.