CPF vs EPF

 CPF (Central Provident Fund) and EPF (Employees Provident Fund) are social security savings schemes implemented in Singapore and Malaysia, respectively.


While both CPF and EPF serve the purpose of providing retirement savings and social security benefits, there are some differences between the two schemes.

Here's a comparison of CPF and EPF:

1. Coverage and Eligibility:
   - CPF: All Singaporean and Permanent Resident employees are required to contribute to the CPF. Self-employed individuals can also contribute voluntarily.
   - EPF: All Malaysian employees earning below a certain income threshold (currently RM 5,000 per month) are required to contribute to the EPF.

2. Contribution Rates:
   - CPF: The contribution rates for CPF vary depending on the employee's age and wage level.

For example, as of 2021, the employer contributes 17% of the employee's monthly salary to the CPF, while the employee contributes 20% of their monthly salary.
   - EPF: The contribution rates for EPF are fixed.

Currently, the employer contributes 12% of the employee's monthly salary to the EPF, while the employee contributes 11% of their monthly salary.

3. Investment Options:
   - CPF: CPF savings are primarily invested in government bonds, which are considered low-risk investments. The returns on CPF savings are guaranteed and tied to long-term interest rates.
   - EPF: EPF savings offer a wider range of investment options, including fixed deposits, unit trusts, and equities. The EPF offers different investment schemes with varying risk levels, allowing members to potentially earn higher returns.

4. Withdrawal Policies:
   - CPF: CPF savings can be withdrawn at various stages of life, such as for housing, education, and healthcare purposes.

However, there are specific rules and limitations on the amount that can be withdrawn at each stage.

The bulk of CPF savings is preserved for retirement.

   - EPF: EPF savings can be withdrawn upon reaching the age of 55 or upon specific circumstances such as retirement, permanent departure from Malaysia, or severe health issues.

A portion of the EPF savings can be withdrawn earlier for housing, education, or medical expenses, subject to certain conditions.

5. Portability:
   - CPF: CPF savings are not portable, meaning they cannot be transferred to other countries' retirement schemes.
   - EPF: EPF savings can be transferred to other countries' retirement schemes, provided there is a bilateral agreement between Malaysia and the respective country.

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