Are you paying more for less?

In the course of reviewing insurance and helping clients with their estate planning, I had seen a handful of CPF Members not nominating any beneficiaries. This is even though it is much easier to make a nomination these days. CPF Members can make nomination online now. In most cases, those members who did not make any nomination because of the following common reasons.

• I have a Will in place. It will take care of everything
• I don’t need to make a nomination since it will be distributed under the Intestate Succession Act (ISA) or an Inheritance Certificate (for Muslims).

Each of our CPF account has an Ordinary Account, Special Account, Medisave Account (Retirement Account for some). On top of that, some may have ST Shares issued by Government way back in the good ol’ days. Some of use might had used our CPF funds to invest in unit trust, shares or other CPF-Approved investments so before any further, it is good to know what is covered by CPF Nomination and what is not.

There can be thousands and one reason not to do a CPF Nomination and if I can share with you one good reason, it will be cost of distributing your CPF monies to the beneficiaries.

As we can see, without a CPF Nomination, the process of our love ones getting the money after we had passed on is a more lengthy process even if the time to apply for a Letters of Administration or Grant of Probate is not considered.

On top of a slower process for the PTO to distribute the CPF money, it also cost more. For the PTO to distribute the money, an administrative fee will be charged and deducted from the CPF money. The administrative fee will depend on the sum of un-nominated CPF monies left behind subject to a minimum fee of $15.

The fees are shown below: