CNA Explains: How does CPF nomination work and what happens if you don’t make one?

CNA Explains: How does CPF nomination work and what happens if you don't make one?

SINGAPORE: The issue of CPF nomination has been put in the spotlight after the recent case of an elderly man who assumed that his only daughter – and not his estranged ex-wife – would inherit his CPF savings.

A High Court judge said on Wednesday (Mar 8) that it was “puzzling” that divorce did not automatically revoke a pre-existing nomination, even though a pre-existing nomination would automatically be revoked upon marriage.

The judge ordered that the CPF savings of the elderly man, Mr Toh Kim Hiang, be released to his daughter, even though he twice failed to nominate her as the beneficiary.

He died shortly after his second nomination attempt. It was later discovered that the man had keyed in the wrong identity card number of his second witness, which was likely why the new nomination could not be completed.

If you are planning to make a CPF nomination, here’s what you need to know about the process.

What happens to my CPF savings when I die? 

The CPF, or Central Provident Fund, is a national savings scheme that is a key pillar of Singapore’s social security system. Its core objective is to help Singaporeans and permanent residents with their retirement, housing and healthcare needs.

When a CPF member dies, any remaining money in the accounts will be transferred to legally entitled beneficiaries such as spouses, or people who were nominated to inherit the funds.

These include CPF savings, unused CPF LIFE premiums and discounted Singtel shares.

Upon death, the CPF Board will get in touch with the nominees to facilitate the distribution of the CPF money. 

If there is no valid CPF nomination, the money will be transferred to the Public Trustee’s office to be distributed via intestacy laws to legally entitled beneficiaries – usually family or next-of-kin.

Why make a nomination?

As CPF funds cannot be distributed through a will, making a nomination will allow you to decide who will receive your CPF savings according to your wishes – and how much each person should receive.

It would also avoid potential disputes among family members over your CPF savings.

Also, nominations would allow your loved ones to claim your CPF savings quickly. If the money is distributed via intestacy laws, it would take time to locate the legally entitled beneficiaries.

There could also be changes to one’s circumstances – for instance, if a couple divorces, if a nominee dies, or if you want to include your child as a nominee.

Note that while it is not necessary to notify the CPF Board of your marriage, any CPF nomination you had made previously will be revoked upon your marriage.

“You are strongly encouraged to make a new CPF nomination so that your CPF savings will be distributed according to your wishes,” the agency said.

What happens in the event of divorce or the death of a nominee? 

The case involving Mr Toh has prompted questions about whether CPF procedures should be reviewed when it comes to divorce, with the judge saying it “could be a matter for the CPF Board to consider”.

According to the CPF website, the treatment of CPF nomination is similar to that of wills, which are not revoked upon divorce.

“Some members may still wish to bequeath their CPF savings to their ex-spouse and/or children via their existing nominations, and therefore, it is best for members to review their latest personal circumstances and update their nomination accordingly,” the agency stated.

In the event your nominee dies before you, the share will be given to the surviving nominees in the same proportion you have specified. 

However, if there are no surviving nominees, the nomination is considered revoked. The person’s CPF savings will be transferred to the Public Trustee’s Office for distribution under Singapore’s intestacy laws or Muslim Inheritance laws.