Thursday, July 4, 2013

EPF vs CPF — who pays better returns?

The Employee’s Provident Fund (EPF), which was established in 1951 to provide for the retirement of its contributors, differs from the objectives of the Central Provident Fund (CPF) of Singapore which, on top of retirement of its contributors, also provides for housing, medical and education of its contributors.

The EPF’s dividend payment which is dependent on its investment income for a particular year also differs from the CPF’s interest payment which has been stable for the last 12 years.

If the returns of the CPF and EPF are compared, it would appear that the CPF offers better returns to its contributors even if inflation is taken into account. (Please refer to chart.)