Budget 2026: CPF Board to introduce new investment scheme in 2028

The Central Provident Fund (CPF) Board will be introducing a new investment scheme in 2028 for longer-term investors interested in a simplified and low-cost option, announced Prime Minister Lawrence Wong during his Budget statement. 

The scheme is a response to the CPF Advisory Panel’s recommendation in 2016 to introduce a Lifetime Retirement Investment Scheme (LRIS).

This new scheme will be an alternative investment option to the CPF Investment Scheme (CPFIS) that is currently available, according to a joint statement by the CPF Board and the Ministry of Manpower (MOM) on Thursday.

In particular, the new investment scheme will cater to CPF members with a longer runway to retirement, who are prepared to take more risk and generate potentially higher returns but have less expertise in navigating the numerous CPFIS offerings.

Additionally, the new investment scheme will be suitable for those who prefer not to actively manage their investments.

Scheme will be voluntary

Similar to CPFIS, participation in the new investment scheme will be voluntary.

The new investment scheme will feature a life-cycle investment product, that will automatically balance the investment portfolio's risk as investors age.

Such investment products are increasingly being adopted internationally, and have been used in government pension schemes in the United States and the United Kingdom, according to the joint statement.

For example, the portfolio will rebalance along a glidepath from higher-risk assets like equities to lower-risk assets like bonds over the years.

The investment portfolio will also be liquidated in phases, with funds being transferred to the investor's Retirement Account, up to the Full Retirement Sum.

CPF's new investment scheme will only feature two to three reputable product providers, offering individuals with a smaller number of options to simplify their decision process.

Additionally, fees for the investment scheme will be capped to minimise costs, and will likely be at a lower cap compared to CPFIS.

According to PM Wong, the CPF Board will begin engagements with the industry beginning in March to invite expressions of interest from potential providers.

The selected providers are expected to be announced in the first half of 2027, with the new scheme to be subsequently launched in the first half 2028.

The CPF Board and MOM will share more details on the investment scheme when they are ready, PM Wong said. 

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dana.leong@asiaone.com