Using a CPF nomination, you can decide whom you wish to appoint as your nominees, and the proportion of CPF savings you would like your nominees to receive when you are no longer around.
In the absence of a CPF nomination, the intestacy law will apply. The process for estate distribution under the intestacy law is usually slower than having CPF nomination, so making a nomination is usually recommended.
Under the current system, upon the demise of the member, the Board will distribute his CPF savings to the nominees in cash as a lump sum.
Starting from 2011, CPF members will be allowed to make a nomination that will transfer their CPF monies (upon their death) into their beneficiaries’ CPF accounts.
The official reason given for this new option is that it was introduced in response to public feedback requesting for CPF monies to be transferred to nominees’ CPF accounts to better provide for their dependents’ retirement and healthcare adequacy.
I’m quite surprised that there is feedback from the public for this option as I think most people would probably prefer to receive the money in cash. With cash in hand, they would then have the flexibility to do whatever they want with it, including topping up their own CPF account.
I suppose one reason they might want to do so is if they are afraid their beneficiaries might overspend the money too quickly.
Hopefully, we will not have a case of the cash nomination option being removed sometime in the future after this new nomination method is introduced.