Singaporeans’ CPF funds are invested in bonds – SSGS – which are fully guaranteed by the Government. CPF monies are therefore invested entirely in risk-free assets. The Government takes the investment risk in managing SSGS proceeds. This arrangement assures that the CPF Board will be able to pay its members all their monies when due, and the interest that it commits to pay on CPF accounts.
Ultimately, the investment returns that the Government expects to make over the long term by taking the risks of long-term investments are not hoarded away in the reserves.
Up to 50% of the net returns from the reserves flow back to Singapore’s Budget through the Net Investment Returns Contribution (NIRC). The long-term returns therefore help to fund spending which benefits Singaporean
