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

CPF, SINDA, CDAC and MENDAKI SchemesPlanning to set up a company in Singapore? Or are you working in Singapore? Here are the CPF, SINDA, CDAC, and MENDAKI schemes in place that you would need to know about:


The CPF Scheme

Also known as the Central Provident Fund (CPF), this scheme was started 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.

Upon its establishment, 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. These include home ownership, healthcare, family protection, and asset enhancement.

All companies in Singapore must contribute to the CPF monthly for all employees. The contribution rates are in accordance with 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 according to the employee’s age, wage rate and – for Permanent Residents (PR) holders – their year of PR status.

You can find details of the CPF contributions 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.


Branches Under the CPF scheme

  • 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 are for hospital expenses and 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 an HDB Flat or purchase through the Public Housing Scheme, or 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. In turn, the latter will boost the company’s productivity.


The CDAC Fund

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

The CDAC Fund is for the CDAC Skills Training Award Scheme. This helps low-income and low-skilled Chinese workers learn industry-related skills and 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.


The MENDAKI Schemes

This scheme involves contributions by the Muslim community in Singapore. Mainly, it works for educational purposes and social welfare programs for the Muslim community in Singapore.

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

The MENDAKI schemes provide training for the Muslim workforce in Singapore. It comes from the MENDAKI Social Enterprise Network Singapore Pte Ltd, to ensure employees are ready for employment.

SMEs especially stand to benefit from such programs because these organizations will assist employers greatly. These schemes could help them find suitable employees with the necessary and required skillset to meet the job roles.

The MENDAKI Scheme is similar to the CDAC Fund.



The SINDA Fund

The SINDA Fund is similar to both the CDAC and the MENDAKI funds. However, the former caters to the Indian community in Singapore. All Indian employees in Singapore must choose to contribute to these funds according to their wage level. Take note that it’s not actually mandatory to do so.


Now that you’ve learned about CPF, SINDA, CDAC, and MENDAKI schemes, you can now determine which one’s for you.

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