The structure of retirement scheme of Singapore Central Provident Fund (CPF): a Shariah analysis
Retirement is placed as one of the top three priorities in many peoples' lives to ensure financial stability as we enter the phase of elderhood. As Singapore moves into a greying population, retirement will be a focus area that concerns every individual. Most Singaporeans will be dependent on the retirement scheme under the care of the Central Provident Fund Board (CPFB) as one of their sources of retirement income. Being in a country with Muslims co-existing within the population, the permissibility of the retirement scheme may need to be assessed to address it's Shariah non-compliance and thus develop a Shariah complaint model to provide a halal source of retirement income for the Muslims in Singapore. Hence, this project paper aims to provide a comprehensive Shariah review of the Central Provident Fund (CPF) retirement scheme in Singapore addressing the different stages from depositing to withdrawal, understanding the awareness of the Muslims in Singapore on the permissibility of this scheme and their concerns, and finally to propose a Shariah compliant retirement scheme. This study will refer to secondary sources to explain a certain concept or to support the views that are laid forth in this research. In addition, primary data collection in the form of a questionnaire will be utilised to understand the awareness among the Muslims in Singapore on the Shariah compliance of the retirement scheme and their comprehension of the returns provided by the CPFB. An analysis of the retirement scheme does show some elements that are prohibited by the Shariah from the depositing, investment, returns and pay-out stage. On top of that, an analysis on the awareness of the Muslims in Singapore regarding the practices of the retirement scheme, many of the respondents were unsure of its Shariah compliance out of which 36% are concerned with its ruling while the other 64% are not. As of today, Majlis Ugama Islam Singapura (MUIS) has issued a fatwa to respond to the interest rate offered by the CPFB which rules it as a gift (hibah) and thus permissible.
Retirement scheme , Central Provident Fund (CPF) , Singapore
Mazlan, M. (2021). The structure of retirement scheme of Singapore Central Provident Fund (CPF): a Shariah analysis (Master dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/3758