CPF Board ‘exploring’ electronic nomination of CPF beneficiaries: Josephine Teo
SINGAPORE — A person may soon be able to electronically nominate a beneficiary to receive his Central Provident Fund (CPF) monies when he dies, in a bid to encourage nominations and reduce the incidence of unclaimed CPF monies, Manpower Minister Josephine Teo said in Parliament on Monday (Nov 4).
SINGAPORE — A person may soon be able to electronically nominate a beneficiary to receive his Central Provident Fund (CPF) monies after he dies, in a bid to encourage nominations and reduce the incidence of unclaimed CPF monies, Manpower Minister Josephine Teo said.
In Parliament on Monday (Nov 4), she said that the CPF Board was “exploring” the proposal, which would make nominating a beneficiary easier. Such a system could come in by March, she added.
The possible move follows media reports which said that those who have died without nominating a beneficiary have left behind S$211 million of unclaimed monies as of the end of 2018. Five Members of Parliament (MPs) filed questions over how to ensure that unused CPF funds are disbursed to people who are entitled to inherit them.
Mrs Teo said that out of the pool of CPF monies unused by deceased members, only about 2 per cent was unclaimed as of end-2018. The Public Trustee’s Office (PTO) is tasked with disbursing these funds to beneficiaries nominated by the deceased members.
She explained that those who died under the age of 45 were much less likely to have made a nomination. An electronic system would make the nomination process easier for this demographic, she added.
“What we intend to do is to make this nomination process even easier for a younger person who is tech-savvy. Through a technology platform, perhaps if they made a nomination today or tomorrow, and they change their mind, (they will find that it) is not so difficult to do as well,” Mrs Teo said in response to a question by Mr Chong Kee Hiong, MP for Bishan-Toa Payoh Group Representation Constituency (GRC).
Even if a member did not nominate anyone to receive his unused CPF monies, it may still be distributed to his next-of-kin in cases of intestacy (where someone dies without leaving instructions about who should be given their property) and based on Muslim inheritance laws, she added. This typically happens within three weeks of the death.
However, as of the end of last year, more than half of the unclaimed S$211 million — or about S$132 million — were CPF monies. Mr Edwin Tong, Senior Minister of State for Law, said that they were not disbursed because the CPF member did not nominate a beneficiary and their next-of-kin could not be traced by the authorities in order to receive these monies despite being legally entitled to do so.
The rest was unclaimed for various other reasons, such as if the member had no next-of-kin or if named beneficiaries could not be located.
Mr Tong added that in such cases, the PTO would have attempted to contact people who may have an interest in the deceased member’s unused CPF monies, such as the informants who notified the CPF Board about the death, or people listed in the records of the Immigration and Checkpoints Authority.
Letters, phone calls or home visits are some of the methods used by the PTO to reach out to the next-of-kin.
“The PTO continues to make efforts to locate legally entitled beneficiaries of unclaimed monies, including making house visits. We would like to encourage individuals who may be legally entitled to the monies to submit their application,” Mr Tong said, adding that there is no time limit for making a claim.
Mr Seah Kian Peng, MP for Marine Parade GRC, then suggested that the process of nomination could be made automatic considering that most younger, unmarried CPF members have not nominated anyone. He proposed that their parents could be the default beneficiary and the person can easily change his nominee at any time if he or she so wishes.
In response, Mrs Teo said that this would not reduce the incidence of unclaimed CPF monies since that relates to the issue of tracking down the beneficiary, and added that this concerns only a small group of people.
“The most difficult (issue) is where there is a next-of-kin, but we have difficulty tracing them. The correct thing to do is to make sure the monies are never forfeited. The person could be overseas, the next-of-kin may have lost touch with the deceased, not even be aware that the person has passed away and that there are CPF monies to be distributed,” she said.
Addressing another question by Mr Chong on a scenario where there is no next-of-kin, Mrs Teo urged older CPF members to opt for the CPF Life annuity scheme which gives higher payouts for life.
“After all, they have no next-of-kin to fall back on if they outlive their savings. At the same time, we focus on helping every member get their nominations done well in advance,” she said.