What happens to unclaimed CPF savings after Singaporeans pass on?

There has been much discussion online after questions were raised in Parliament over what happens to unclaimed CPF monies and the Minister for Manpower Josephine Teo's clarifications on the issue.

Here's what we learnt about what happens procedurally to unclaimed CPF monies from the Minister's answers and CPF's website - and what we can do to ensure our hard-earned CPF monies go to our intended beneficiaries.

WHAT HAPPENS ONCE WE PASS ON — AS FAR AS CPF IS CONCERNED? 

According to the CPF Board, there is "no need to report the death to CPF Board unless the deceased is a foreigner with a CPF account", because the CPF Board will be notified by the relevant public agencies.

In the best-case scenario, the deceased would have made a CPF Nomination, and the CPF Board would disburse the remaining CPF monies (less any deductions to MediSave to settle outstanding medical bills) in accordance to the instructions laid out in the CPF Nomination - whether that's a Cash Nomination, Enhanced Nomination Scheme, or Special Needs Savings Scheme.

According to Minister Teo, the majority of CPF members who passed on had made nominations and their CPF monies were distributed according to nominations - usually within a month of the CPF Board being notified of the member's death.

In the absence of a CPF Nomination, your CPF savings would be distributed according to Singapore's intestacy laws or Muslim inheritance laws.

Within three weeks of being notified of the member's death, the CPF Board will transfer control of the deceased CPF monies to the Public Trustee's Office (PTO), which handles all CPF savings left by those who died without nominating a beneficiary, as well as assets of deceased individuals who did not make a will.

The CPF Board and PTO will then attempt to locate and contact the deceased's next-of-kin to invite them to apply to claim the un-nominated CPF monies. These efforts will continue for 7 years, and include making house visits to locate legally entitled beneficiaries of unclaimed monies, and publishing notices in the newspaper.

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It was shared in Parliament that through this process, the PTO has distributed around 88 per cent of un-nominated CPF monies it received over the past 5 years.

Interestingly, CPF monies in a deceased member's Ordinary Account (OA), MediSave Account, Special Account and Retirement Account will continue to earn the applicable interest for 6 months after their death.

Thereafter, all the monies will be transferred to the deceased's OA and earn the applicable OA interest rate, but not the bonus 1 per cent interest. All unclaimed monies will cease earning interest after 7 years.

HOW DO CPF MONIES END UP BEING UNCLAIMED? 

Despite the considerable and sustained efforts of the CPF Board and PTO to locate and disburse CPF savings to the rightful claimants, people do fall through the cracks.

If family members do not update their mailing address and contact details with the government (even though they are required to) then efforts to reach out to them would not be successful.

However, since there is no time limit for next-of-kin to claim CPF monies, the monies would remain with the PTO until the legal beneficiaries apply to receive the funds.

Another possibility is that the nominee that is supposed to receive the CPF monies has passed on. In this situation, the CPF monies could be paid to the Executor/Administrator of the nominee's estate, or if there is no Executor/Administrator appointed, the CPF savings may be paid to a proper claimant if the sum does not exceed $10,000.

WHAT HAPPENS TO CPF SAVINGS OF CPF MEMBERS WITH NO NEXT-OF-KIN? 

It is also possible that CPF member who has passed on has no surviving next-of-kin. It is important to note that this isn't the same as missing or uncontactable family members.

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If there is no CPF Nomination made, and in accordance with Rule 9 of Singapore's Intestate Succession Act, the government would be legally entitled to the entire estate if there are no surviving family members.

It is unclear if there is a moratorium to allow previously unknown family members to come forward, or what the government actually does when it takes control of someone's CPF assets.

WHAT TO DO TO PREVENT YOUR CPF FROM BEING UNCLAIMED? 

To ensure your hard-earned CPF savings get distributed in the way you wish, always make a CPF Nomination and ensure your beneficiaries keep their contact details up-to-date.

If you think you have CPF monies due to you, then you can always visit a CPF Service Centre to enquire, since there is no time limit for legal beneficiaries to make a claim.

This article was first published in Dollars and Sense.