CPF, SINDA, CDAC and MENDAKI Schemes – What Are They and How Do They Work?

Planning to set up a company in Singapore? Or are you working in Singapore? Here are the important schemes in place that you would need to know about:


The CPF Scheme

CPFAlso known as the Central Provident Fund (CPF), this scheme was established in 1955 as a social security savings system. The main objective of the scheme is to ensure that all Singaporeans are self-reliant individuals in society.

When it first started, the CPF scheme merely served as a retirement savings scheme for employees. Now, it has expanded to include even more aspects of social security functions which include home ownership, healthcare, family protection and asset enhancement.

All companies registered in Singapore are required to contribute to the CPF monthly for all employees. The rates to be contributed are stipulated in the Central Provident Fund Act. Under this act, both employers and employees are required to make their monthly contributions, MNCs and SMEs alike. These contributions are determined by the employee’s age, wage rate and – for Permanent Residents (PR) holders – their year of PR status.

Details of the CPF contributions specifics can be found on the CPF website for more information.

Once an employee has reached the age of 55, they will be able to withdraw their CPF savings, but a minimum sum would need to be set aside. This minimum sum is to ensure that the retired will still be able to afford all their basic necessities during their retirement.

The current drawdown age in Singapore is set at 63, and this is one a retiree will receive monthly pay-outs if they are CPF members. CPF members can also opt for the CPF LIFE scheme, where they will receive a monthly income for life, which begins from their drawdown age.

The branches of coverage under the CPF scheme are as follows:

  • Healthcare – Under this function, all employees in Singapore will hold a Medisave Account, which will help them accumulate the savings they need for healthcare purposes. These funds can be used to pay for hospital expenses and specialized outpatient treatment, including chemotherapy and radiotherapy for both employees and their dependents.
  • Home Ownership – CPF members can use the funds in their Ordinary Account to help them purchase a home, which can either be a HDB Flat or a purchase through the Public Housing Scheme, or a private property through the Residential Properties Scheme. They can also use these funds to make their monthly house payments.
  • Asset Protection – CPF members can invest their funds from their Ordinary Account to help purchase assets which include Fixed Deposits, Unit Trusts, Bonds, Treasury Bills, Shares and even Gold.
  • Family Protection – Under this plan, there is a Dependent’s Protection Scheme which is available to CPF members, ensuring that families can cope for the next few years in the event a member’s dependents face permanent incapacity or death.


The Skills Development Levy (SDL)

Administered by the Singapore Workforce Development Agency (WDA), the CPF Board in Singapore collects a levy through the SDL which will then be allocated as grants to help companies send their workers for training and development. Under this scheme, employers in MNCs and SMEs must contribute to the SDL at a rate of 0.25% of the employee’s monthly remuneration up to the first $4,500.

SMEs stand to benefit from this scheme which will enable them to obtain better qualified employees, which will in turn boost the company’s productivity.


The CDAC Fund

CDACThe CDAC Fund caters to the Chinese community in Singapore and is focused on meeting their needs. All Chinese employees in Singapore will need to make the necessary contributions according to their wage level, although employees can opt out of contributing if they want to.

The CDAC Fund is used for the CDAC Skills Training Award Scheme, which helps low-income and low-skilled Chinese workers learn industry-related skills which will help them find gainful employment in Singapore.

SMEs stand to benefit from such organizations as they will have a wider range of lower waged and skilled labour to choose from when recruiting suitable candidates to fit the vacant job functions.



MENDAKIThis scheme involves contributions by the Muslim community in Singapore, and they are used for educational purposes and social welfare programs for the Muslim community in Singapore.

Muslim Singaporeans, PRs and foreign workers who are working in Singapore will be required to contribute to this fund, and the contribution amount will depend on the contributor’s wage level.

MENDAKI functions to provide training for the Muslim workforce in Singapore through the MENDAKI Social Enterprise Network Singapore Pte Ltd, which ensures they will be ready for employment in the job market.

SMEs especially stand to benefit from such programs because these organizations will assist employers by helping them find suitable employees with the necessary and required sill set to meet the job roles.

The MENDAKI Scheme is similar to the CDAC Fund.


The SINDA Fund

SINDAThe SINDA Fund is similar to both the CDAC and the MENDAKI funds, this time catering to the Indian community in Singapore. All Indian employees in Singapore must choose (although it is not compulsory) to contribute to these funds based on their wage level.