Top-up $2.8m CPF to protect from creditors?

Photo: TODAYonlinePhoto: TODAYonline

Does transfer money to CPF an effective way to be protected from creditors?

With reference to my article “WHEN IN DEBT, JUST PUT EVERYTHING IN CPF” (allsingaporestuff, Sep 18) – my friends remarked that they liked the title of the article very much.

(Note: Like all my articles – the title of the articles are written by the editor of allsingaporestuff)

One of my friends asked: “If I expect to be sued, and I think I will end up having to pay a few million dollars – and I have 2.5 million in the bank and no other assets, other than my CPF and HDB flat – how much of my cash can I transfer to CPF so that it will be protected from creditors?

So, I did some research and found the following:-

According to the CPF website – “How much cash top-up or CPF transfer can a recipient receive?”

Maximum amount of top-up the recipient can receive

So, if you have a spouse, two siblings, parents, grandparents, parents-in-law’s, and grandparents-in-law’s (total of 11 persons and assuming all of them have no CPF at all and never had any CPF, and are over 55 years old – the maximum top-up per person is the Enhanced Retirement Sum (ERS) of $249,000 x 11 persons = $2,739,000.

Just for the purpose of illustration – if they are all below age 55, then the maximum top-up per person is the Full Retirement Sum (FRS) of $166,000 x 11 persons = $1,826,000.

And of course each of them can start withdrawal of their monthly CPF layouts immediately, under the old CPF Minimum Sum Scheme if they are above 64 years old, or wait until 65 to withdraw monthly under the mandatory CPF Life Scheme if they are born after 1954.

Leong Sze Hian

About the Author

Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.