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EPF vs CPF 2025: The Retirement Fund Face-Off

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The Tale of Two Titans: System Overviews

Malaysia's EPF: The High-Yield Heavyweight

The EPF stands as one of Asia's largest pension funds, managing RM1.25 trillion in assets for 16.22 million members as of December 2024. The fund's investment strategy has proven success, with the recent announcement capturing headlines across the region.

"The EPF is pleased to announce higher dividends for 2024, driven by recovering global and domestic markets, resilient economic growth, and sound portfolio management. Our diversified investment strategy allowed us to capitalise on growth opportunities, optimise returns, and reinforce the long-term financial security of our members," stated EPF Chairman Tan Sri Mohd Zuki Ali.

The EPF's 2024 performance reflects a sophisticated asset allocation:

  • 43.5% in equities (generating an impressive 9.90% ROI),
  • 46.2% in fixed income instruments (4.27% ROI),
  • 6.3% in real estate and infrastructure (5.13% ROI), and
  • 4% in money market instruments. 
This diversified approach delivered RM74.46 billion in total investment income, representing an 11% increase from 2023.

CPF accounts of 300,000 foreigners will close from April 1, 2024

Singapore's CPF: The Structured Stalwart

Singapore's CPF operates on a fundamentally different philosophy, prioritising capital preservation with guaranteed returns.

The 2025 structure maintains the:

  • Ordinary Account (OA) at 2.5% per annum, whilst
  • Special, MediSave, and Retirement Accounts earn 4% per annum through to 30 September 2025.

The CPF's contribution ceiling increased to S$7,400 monthly in January 2025, with the annual ceiling remaining at S$102,000. For professionals aged 55 and below, the total contribution rate stands at 37% (17% employer, 20% employee), representing one of the world's highest mandatory savings rates.

Contribution Structures: 

Aspect Malaysia EPF Singapore CPF
Employee Contribution 11% (fixed) 20% (age ≤55)
Employer Contribution
  • 13% for those earning RM5,000 or less/ monthly
  • 12% for those earning greater than RM5,000
 17% (age ≤55)
Total Contribution Rate   23%-24%   37%
Monthly Ceiling/ Salary Cap for Contributions  N/A CPF cap at S$7,400/month 
Annual Ceiling Contribution
  • Self contribution: RM100,000
  • Employer & Employee contribution is not capped
  • CPF OW ceiling: S$88,800
  • CPF annual salary ceiling: S$102,000
Account Structure
  • Retirement; Account 1: 75%
  • Sejahtera; Account 2: 15%
  • Flexible; Account 3: 10%

  • OA: 2.5%

  • SA/MA/RA: 4%

  • Extra 1–2% interest depending on age and balances

Historical Performance Comparison

Over the past decade, EPF's annual dividends have ranged from 5% to 6.7%, with the 2024 dividend of 6.30% marking the highest return since 2017.

Meanwhile, CPF's structured approach provides certainty: members earn up to 6% on the first S$60,000 of combined balances (capped at S$20,000 for OA), with additional interest channelled to retirement accounts.

EPF step-up, but gaps remain | The Star

Case Study: The S$10,000 Monthly Earner

Category Scenario A: Malaysia (RM33,000/month) Scenario B: Singapore (S$10,000/month)
Monthly Salary RM33,000 S$10,000
Employee Contribution RM33,000 × 11% = RM3,630 S$7,400 × 20% = S$1,480
Employer Contribution RM33,000 × 13% = RM4,290 S$7,400 × 17% = S$1,258
Total Monthly Contributions RM3,630 + RM4,290 = RM7,920
(23% of salary)		 S$1,480 + S$1,258 = S$2,738
(37% of contributable income)
Annual Contributions RM7,920 × 12 = RM95,040 S$2,738 × 12 months = S$32,856
 CPF (10 years) compounded

Using ~6.3% (2024) annual return with monthly compounding:

  • RM95,040 × 10 years = RM1,445,574

Using ~3.5% blended annual return with monthly compounding:

  • S$32,856 × 10 years = ≈ S$392,700

Note: The table only calculates basic CPF, and does not include CPFIS or CPF + Investment comparisons.

Withdrawal Flexibility: The Accessibility Factor

EPF Withdrawal Framework

Malaysia's system offers greater pre-retirement flexibility. Members can withdraw from Account 2 for housing, education, and healthcare from age 50. Full withdrawal becomes available at 55, providing complete control over retirement funds.

CPF's Structured Approach

Singapore's system prioritises retirement adequacy through structured withdrawals. At 55, members must set aside the Full Retirement Sum (S$213,000 in 2025) before accessing excess funds. The CPF LIFE scheme then provides lifelong monthly payouts from age 65.

"Members turning age 55 in 2025 can receive CPF LIFE monthly payouts of more than S$3,000 for life from age 65, if they choose to set aside the Enhanced Retirement Sum."

 NSTviral: Malaysians sitting on EPF 'gold mine', says Singaporean finance guru [WATCH]


Tax Implications: The Hidden Variables

Both systems offer tax relief on contributions, but with different mechanisms. Malaysia provides personal tax relief of up to RM7,000 for EPF contributions, whilst Singapore treats CPF contributions as tax-deductible, effectively reducing taxable income by the full contribution amount.

For high earners in Singapore's progressive tax system (reaching 24% for income above S$320,000), the CPF tax shield becomes particularly valuable. Malaysia's relatively lower tax rates (maximum 28% for income above RM100,000) reduce this advantage.

Strategic Considerations for High-Net-Worth Professionals

The Portfolio Approach

Sophisticated investors should view these systems as components of broader wealth strategies rather than standalone solutions. Singapore's contribution ceiling allows greater flexibility for alternative investments—private equity, real estate investment trusts, or offshore structures that may outperform both EPF and CPF returns.

Currency Hedging Strategies

For professionals maintaining assets in both currencies, the systems offer natural hedging. Malaysian-based professionals with Singapore property investments benefit from EPF's RM-denominated growth, whilst Singapore residents with Malaysian business interests gain from CPF's SGD stability.

Succession Planning Implications

Both systems allow nomination and inheritance, but with different structures. EPF provides more straightforward inheritance mechanisms, whilst CPF's integrated healthcare (MediSave) component offers family protection benefits that extend beyond pure retirement savings.

The Verdict: Context-Dependent Optimisation

The EPF versus CPF debate defies simple conclusions. For young professionals prioritising growth and comfortable with market volatility, EPF's higher historical returns and unlimited contribution potential present compelling advantages. The 6.30% dividend significantly outpaces inflation and provides real wealth accumulation.

Conversely, professionals valuing certainty, structured retirement planning, and integrated healthcare provisions may prefer CPF's comprehensive approach. The system's contribution ceiling, whilst limiting forced savings for high earners, enables sophisticated portfolio diversification.

Would Malaysia's EPF benefit from Singapore's strict approach to CPF withdrawals?

Both systems continue evolving. Singapore's recent contribution rate increases for senior workers reflect ongoing adequacy concerns, whilst Malaysia's EPF explores new investment avenues including ESG-focused strategies and infrastructure development.

The competitive dynamic between these systems ultimately benefits members, driving innovation in retirement fund management across Southeast Asia. For high-earning professionals, the optimal choice depends on individual risk tolerance, career trajectory, and broader wealth management objectives.

"The EPF's commitment is to deliver strong and consistent returns while maintaining its role as a trusted retirement savings institution. As the economy evolves, we carefully manage risks to ensure both short-term gains and long-term stability," concluded EPF Chairman Tan Sri Mohd Zuki Ali.

In an era of increasing cross-border mobility and sophisticated investment options, both EPF and CPF serve as foundational elements of retirement planning rather than complete solutions. The savvy professional leverages each system's strengths whilst building complementary investment portfolios that transcend geographical and currency boundaries.

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References

  • Employees Provident Fund Malaysia. "EPF Declares 6.30% Dividend For Simpanan Konvensional And 6.30% For Simpanan Shariah." Press Release, 1 March 2025.
  • Central Provident Fund Board Singapore. "CPF Interest Rates from 1 July to 30 September 2025." Official Announcement, 2025.
  • Ministry of Finance, Singapore. "Budget 2025: CPF Changes and Enhancements." Budget Documentation, 2025.
  • EPF Malaysia. "Summary of EPF's 2024 Investment Performance." Annual Report 2024.
  • CPF Board Singapore. "What are the Basic Retirement Sum, Full Retirement Sum and Enhanced Retirement Sum applicable to me?" Member Information, 2025.
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