20140717 No reason for MPs and GIC to be afraid of CPF transparency issue

GIC has been losing citizens’ trust in its management of our CPF monies. Although there are valid speculations about GIC’s solvency and huge investment losses, the government could have easily addressed this with more transparency. Instead, ministers and MPs prefer to beat around the bush in Parliament.

Keeping $252 billion of Singaporeans’ hard earned savings in total darkness might have gone unquestioned in the past. But not now.

Just what is GIC trying to hide from CPF members when it could have revealed where our money is invested?

The meaning of transparency could not be better illustrated with a comparison between the world’s largest pension fund, the Government Pension Fund Global (GPFG) of Norway, and GIC.

1 GPFG – Using state resources (oil) for investments to save for future generations of Norwegians in a totally transparent manner.
GIC – Using CPF members’ hard-earned savings for investments but says they cannot be revealed with crap reasons.

2 GPFG – Publishes the remuneration of its board of directors.
GIC – Remunerations are in the millions but are kept secret. Do ministers receive remunerations? Sorry that also cannot tell.

Norges Bank Annual Report 2013 (pg 50) Exchange rate $1 = 5 krone

3 GPFG – No politicians on its board.
GIC – 5 ministers, including the PM and 2 DPM, on its board.

4 GPFG – Directors serve a maximum of 2 terms/12 years.
GIC – Lee Kuan Yew was Chairman for 30 years from 1981 to 2011. PM Lee is the present Chairman.

5 GPFG – Discloses its total holdings.
GIC – Make up stories of likely attack by currency speculators during a crisis but discloses this to foreign publications such as SWF.
GIC – Discloses total assets of US$320 billion to SWF but continues to state “it manages well over US$100 billion” for over a decade. The government channeled more
than S$86 CPF funds into GIC during the last 5 years.

What is more interesting:

6 GPFG – Published a list of ALL (more than 30) its real estate holdings.
GIC – ZERO

7 GPFG – Published 6 pages of more than 1000 bonds in its portfolio.
GIC – ZERO

8 GPFG – Published 45 pages of its holding of more than 8000 equities.
GIC – ZERO

Conclusion

GIC is about 3 times smaller than the largest pension fund GPFG. The value of its individual investments are higher and that means there are less number of investments in its portfolio. If Norway’s pension fund can be totally transparent, why are CPF investments shrouded in secrecy? The logical conclusion for maintaining opacity is there are huge issues in GIC.

Does the PAP government want to regain the trust of citizens? Or does it want to continue treating citizens as fools? The ball is in the PAP’s court. If there is nothing to hide, providing transparency should not be an issue.

PS
The Norway government is managing state resources and yet it is transparent. The GIC is managing public’s money, treats OUR money like state resources but remains opaque. Maybe we are expected to believe it may take 56 man years?