In a significant move, the Central Provident Fund (CPF) Board has rolled out planned modifications to the CPF scheme, set to take effect in 2025. These adjustments are designed to bolster retirement savings while offering greater flexibility for CPF members.
Let’s dive into what’s changing in 2025:
One major update is the increase in the Ordinary Wage (OW) ceiling. This ceiling dictates the maximum monthly wage portion eligible for CPF contributions for every employee. By 2026, this ceiling will rise to $8,000. To ease the transition for both employers and employees, the increase is being implemented in four phases, which began on September 1, 2023.
Importantly, the CPF annual salary ceiling, which limits the total CPF contributions based on combined Ordinary and Additional Wages to $102,000 annually, will remain unchanged. Similarly, the ceilings for Additional Wage contributions and the CPF Annual Limit are staying put at $102,000.
These strategic adjustments by the CPF Board are expected to enhance financial planning for retirement, ensuring that members have more robust and flexible options going forward.
