(Update: 28 Feb 11 - I wrote this one year ago. This SNSS is another type of CPF nomination. Thus to date we have 4 types of CPF nominations: CPF Minimum Sum nomination, CPF Enhanced Nomination System, CPF 'normal' Nomination and the CPF Special Needs Saving Scheme (SNSS). It appears to me that SNSS is not ready and so we shall wait for further details from CPF. The first thing I see is that there are going to be people who will make nominations in conflict with each other resulting in an unintended consequences. As I mentioned, I like CPF because their complex rules help to create jobs for people like me. It also mean that I can charge higher fees trying to help people optimise their CPF nominations or to unwind their CPF nominations position [something like unwinding complicated derivative positions] :) )

From 2011, there will be a new scheme called the Special Needs Saving Scheme (SNSS). In this scheme, parents of disabled children can nominate their children to be the beneficiaries of their CPF. Currently, any payout upon death of the CPF Member is made in one lump sum to the beneficiaries. Under the SNSS, the CPF Member can specify the payout in installment instead of lump sum. I find this to be interesting although I found it strange that it was not in the news (I might have missed it though).

However, I also found it rather strange that it is a kind of duplicate compared to the services offered by Special Needs Trust Company (SNTC). Details of the SNSS will be out in 2011. I hope that government will streamline the duplicate between SNSS and the services of SNTC because SNTC is essentially doing that – which is to work together with the guardian of the person with special needs (PSN) and disburse the money under trust for the maintenance and living expenditure of the disabled person. I have another concern that CPF Board is taking on many roles which it is exempted from many legislations. For example, CPF Board is exempted from Insurance Act (despite it running two insurance schemes namely Medishield and CPF Life). CPF Board is also exempted from Banking Act despite it taking large amount of deposits in the form of CPF OA, Special Account and Medisave.

It appears to me that the SNSS will be administered by CPF Board. If that’s the case, it will probably be exempted from the Trustee Act afterall the SNSS is basically a trust setup by the CPF Member (settlor) upon his death for the benefit of the beneficiaries.

A better way is to simply setup a trust with SNTC and then make a CPF nomination stating the living trust as the beneficiary. It is cleaner that way although I am unsure whether will this simple route be eventually be used. Sometime, the simplest solution is to do nothing at all. For such a case, making a CPF nomination to the trust setup by SNTC will require CPF Board not to do anything.