No more ‘shielding’ of CPF soon?

I found out that people were exploiting a loophole in the CPF system back in 2017 and at the time, some people told me it wasn’t a loophole and that it was working as intended. 

I am referring to what is popularly known as “CPF Shielding” where members who have ample funds in their CPF OA drain their CPF SA funds just before turning 55 years old so that their CPF RA will be made up of money from their CPF OA instead. 

Shortly after turning 55, they will refund money to their CPF SA so that they will enjoy higher interest income from their CPF savings overall. 

This to me has always sounded like a loophole as the CPF is meant to help the masses and in particular poorer CPF members. 


This is why there is a limit on CPF annual contribution. 

This is why we cannot do CPF SA top ups once the prevailing FRS is hit. 

This is why upon turning 55 years old, the first 30K of our CPF savings enjoys additional 2% interest and the next 30K of our CPF savings enjoys additional 1% interest. 

This is to help members who have lower CPF savings with retirement funding.

The CPF system is not meant to make the rich richer. 

CPF members who are able to do “CPF Shielding” are those who are better off financially and they should not be overly reliant on the CPF to fund their retirement. 

I know many rich people who would like to park more money in their CPF accounts but they are not allowed to. 

Rightly so. 

Let the CPF system help those who need the help most. 


Unfortunately, very often, people who need the help most are the most stubborn.

They would resist the CPF system instead of making use of the system to help themselves. 


I said this in 2018 in reply to a reader’s comment on “CPF Shielding” here: 

“The more people talk about this, the more people do this, the more this loophole could be plugged.” 

AUGUST 17, 2018 AT 5:44 PM 

It seems that this is finally happening. 

“The days of exploiting loopholes in the national retirement scheme could be over soon, after the Central Provident Fund (CPF) Board posted a warning on its website. 

“In particular, it is taking aim at the act of “shielding”, which is promoted by some financial advisers to circumvent the transfer of funds from members’ Special Account (SA) to their Retirement Account when they hit 55.” 


The last time I blogged about “CPF Shielding” was in December 2019. 


I still think that the CPF can be our best friend in our golden years but our best friend does not appreciate being exploited. 😉 


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