CPF Board has advised all insurers to send a letter to all customers who has a Recurring Single Premium (RSP) policy purchased under the CPF Investment Scheme – Ordinary Account (CPFIS-OA), to remind them about the possibility of a penalty charge, should it fail the minimum investment amount criteria set by CPF Board. A sample content of the letter is as follows: (It is important to take note, especially the penalty. )
You have a Recurring Single Premium policy (RSP) purchased under the CPF Investment Scheme – Ordinary Account (CPFIS-OA), whereby the monthly/quarterly/semi-annual/annual contribution to the RSP is $X (to be filled in by company).
CPF Board has announced that from 1 April 2008, you will not be able to invest the first $20,000 in your Ordinary Account (OA). To invest under CPFIS-OA, you will have to set aside $20,000 in your OA before the remaining savings in your OA can be used for investments. (This restriction is in place because of the extra 1% interest that you will earn on the first $60,000 of your combined CPF accounts from 1 January 2008.) However, this restriction does not apply to balances in your Investment Account (IA) with your agent bank.
Please check your OA and IA balance and consider whether you have sufficient funds for not only the next RSP deduction, but also for future RSP deductions. In particular, if your RSP contribution exceeds your IA balance, and if your OA balance is below $20,000, the application for withdrawal of funds from your CPFIS agent bank will be rejected and your agent bank, at its discretion, will charge you $5.35.
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