20160829 CPF members should not confuse facts with PAP’s propaganda

I refer to ST’s propaganda by Joanna Seow dated 26 August, “Singaporeans don’t realise what a good deal the CPF is”. Singaporeans are in fact getting smarter and the headline should read “Singaporeans have realised what a bad deal the CPF is”.

How could any scheme which can suka suka shift its goalposts to another stadium every other year be a good deal?

Joanna: “..CPF system has its share of detractors among Singaporeans but, overseas, it attracts a lot of positive attention”.

But aren’t foreigners only armchair admirers of our system? And if they have been affected by PAP’s shifting goal posts as much as CPF members, won’t they also be detractors?

Joanna said this was a “puzzling fact” as if ST readers, many who could be her Ah Kong or Ah Ma, were born yesterday.

MSM is no longer in a position to, in Chee Soon Juan’s words, “frame the issue, set the parameters”. Isn’t she aware that the internet exists? Why is she insulting ST readers?.

Joanna quoted members of the CPF advisory panel but how objective is that when they are all PAP appointees?

Members of CPF Advisory Panel are all PAP appointees leh

Professor Benedict Koh, a member, was reported to have said foreigners wanted to invest in our CPF. But would the same foreigners, if they were CPF members, agree to CPF rules being continuously tweaked for no rhyme or reason, with the possibility of the withdrawal age increased to 80 and beyond?

CPF members should read up on the CPF issue and not be confused by tons of PAP propaganda.

CPF Facts:

1 What was the original objective of the CPF scheme?

CPF scheme started in 1955 as a compulsory savings scheme to provide for members’ retirement. Total 10% contribution split equally between employer and employee.

Mission before 2011

2 Why was the Mission amended after 2011?

When the majority of Singaporeans did not have the means to retire after 5 decades, PAP realised the CPF scheme was a failure. Instead of addressing the underlying issues, the government sneakily amended CPF’s mission, after 2011, to include self financing of healthcare and housing. With a tougher mission or Mission Impossible, failure might be excusable.

Mission after 2011

3 Why has the CPF scheme failed?

During the initial years of a member’s career, more than 80% of retirement savings is used to finance housing need or channeled into the Medisave Account. The balance of less than 20% is clearly too little for retirement.

4 What was the highest contribution rate?

Employer contribution rate increased from 5% to 25% in 1984. Likewise for employee.

5 Why were CPF contribution rates drastically increased?

This was to allow PAP to support its public housing programme and trumpet its high rate of home ownership. Increase construction activities contributed to high GDP growth.

6 Did frequent increases in CPF contribution rates affect the economy?

At one stage, employers’ labour cost increased by 20%, from 5% to 25%. (Ask Joanna if CPF was a good deal for businesses.) Although wages of employees were increasing, the disposable income had decreased by 20% after CPF contributions increased from 5% to 25%. (Ask Joanna if less spending is good for the economy.)

7 Is this shortsighted?

Which farsighted government has allowed its citizens to finance housing needs with 63% of savings meant for retirement? Even Malaysia’s EPF, split into 2 accounts, allows only 30% of retirement savings to finance housing. If one sets aside less for retirement and spends more on housing, a retirement shortfall is confirmed. This is common sense.

8 Did this contribute to the issue of retirement shortfall?

Yes. Together with the MA, 84% of retirement savings has been set aside to service 20- to 30-year mortgages and medical needs.

9 Why doesn’t the government address this issue which is really easy to resolve?

Billions in CPF retirement savings have been channeled into housing for at least 4 decades. A drastic reduction would cause a collapse in property prices. Since rent-seeking features prominently in our government, decreasing the value of real estate is not in the interest of a parasitic PAP. That’s why we see all sorts of attempts to maintain high property prices.

10 But isn’t owning a home more important than retirement?

There’s no point owning a home without the ability to enjoy the fruits of one’s labour but one also can’t retire without a home. There is a fine balance between both goals. But should one own a home at the expense of retirement? Are Singaporeans merely economic digits?

11 Is GIC doing a good job investing our CPF?

The problem with GIC is that no one, including almost every MP, really knows where or how our CPF is invested. Intelligent CPF members are somehow too fearful or reluctant to demand transparency and accountability from GIC. With MSM publishing only information selectively disclosed by GIC, no honest person can state with certainty that GIC has done a good job managing our CPF.

12 Why is GIC unsuitable to manage our CPF?

GIC’s stated goals:
1. Beat global inflation.
2. Preserve the international purchasing power of funds.

There is no mention of GIC serving CPF members’ retirement needs at all.

13 But GIC has done very well and that’s why it has grown so big?

Not true. In 1996, CPF balances stood at $72.5 billion. This amount has increased to about $314 billion, mostly through new contributions and not superior returns by GIC. The image of GIC as a superior fund manager is cultivated by PAP controlled MSM.

14 Does GIC need to commingle CPF funds with state reserves?

No. GIC could have managed CPF funds separately. For example, $314 billion (CPF) + $ x billion (Singapore’s foreign reserves) = Total reserves managed by GIC. GIC could still disclose only the CPF portion without publishing the value of total reserves to conceal the total size of our reserves.

15 Why does GIC insist on commingling CPF funds with state reserves?

The obvious reason is to mask its poor performance: our scholars are no Warren Buffet, only book smart. PAP can’t simply parachute some scholars into top positions in the fund management industry and expect superior performance. If scholars were cut out to be fund managers, why bother to become paper generals or helm ministries/ stat boards for more than 2 decades?

16 Is it true that speculators will attack the Singapore dollar during periods of volatility?

Many speculators with deep pockets are extremely intelligent investors, eg George Soros who crashed the British pound, and will never mount an attack on any currency that is fundamentally strong. It’s like banging one’s head against the wall to find out which is harder. Also, would anyone attack an enemy’s weakness or strength?

A currency which could fall after a speculative attack means it is fundamentally weak and would have fallen in due course. Is GIC implying there is some fundamental weakness in our currency? Is there material information withheld from the public?

Singaporeans should be mindful that some statements by GIC is not only ridiculous but self insulting to the point of stupidity.

17 But aren’t CPF interest rates a good deal?

While admittedly CPF rates are relatively high only recently, it should not be viewed in isolation. This is because CPF members have been shortchanged for decades; CPF Board has been using a flawed formula pegged to short term rates to determine long-term CPF rates.

18 Still, aren’t high rates good?

High rates are applicable only to the first $60,000 of CPF balances. The problem is high rates are used to placate members for their delayed withdrawal. High rates are like Khaw’s degree; see no touch, cannot be eaten. Tens of thousands of CPF members have died without enjoying the fruits of their labour.

19 Why does PAP hail our CPF scheme a success?

To admit the truth would be slapping its own face. Ordinary Singaporeans who retired 10 years ago, in all likelihood, would have been looking for supplementary income. CPF a success? Those who retired 2 decades ago would be in deeper shit. It’s therefore not surprising that more elderly citizens will be seen eking out a living in future. CPF scheme a success?

20 But this is not the failure of the government?

One of the main causes of our retirement shortfall is exorbitant housing prices. The PAP controls both the demand and supply of housing and is singlehandedly responsible for skyrocketing prices. To sustain high prices, PAP legislated more than 60% of total retirement savings for housing use over a 2 to 3 decade period. Without earning a return for a prolonged period, how is CPF to provide for retirement?

21 Low CPF rates are necessary because our savings are guaranteed?

That’s not true because Malaysia’s EPF members have been earning a return of 6% over 20 years without any government guarantee. Over the same period, each CPF member has been paying about 3% of returns to the government every year for a guarantee which really isn’t one.

22 How could a guarantee = no guarantee?

The government, a trustee, and the people are not 2 distinct entities. For the so called guarantee to take effect would mean adverse economic conditions are so severe that taxes may be raised to make good on the CPF ‘guarantee’. Since CPF members will ultimately be affected by such fiscal measures, it is akin to CPF members guaranteeing their own CPF, ie own self guarantee own self.


There are inherent flaws in our CPF scheme which requires a revamp, not tweaks.

GIC has the mandate to manage our nation’s reserves but not CPF savings. There has never been any mention by GIC about serving CPF members’ retirement needs.

PAP does not want GIC to manage CPF funds in a separate account because that would reveal the underperformance of our scholars.

How is it possible that 90% of MPs in a democratic country do not know where hundreds of billions in our reserves have been invested?

PAP supports a non transparent GIC which has concealed material information from the public for decades. Members of the CPF Advisory Panel are all PAP appointees selected to convince the public to continue allowing the non disclosure of material information. It is a ‘Wayang’ Advisory Panel.

The ‘Wayang’ Advisory Panel is in no position to advise anyone because it has access to the same information, selectively-disclosed by GIC, as the public. It does not even know the actual performance of GIC.

In all likelihood, GIC is concealing many Arrium-type investments in its books. GIC could clarify this by publishing a proper set of accounts.

Thinking CPF members should demand transparency – our right – from GIC. The failure of CPF scheme needs to be urgently addressed.

20160828 Past reserves: PAP ‘jaga’ should disclose number of times/amount used

The majority of Singaporeans would agree that the most important role of our elected president is to ‘jaga’ the hundreds of billion$ in our past reserves.

Since DPM Tharman’s response to former NMP Lina Chiam’s question in 2013, billions have already left our reserves vault. But how come no sound, no shadow from President Tony Tan, our jaga? Is he serving his political party or Singaporeans?.

Besides land reclamation, SERS, redevelopment of Paya Lebar Air Base, etc the mother of all mega projects of this century is the construction of Tuas mega port. Billions will eventually be used: land reclamation of Phase 1 alone was reported to cost more than $2.4 billion**. Additional billions will add to the full cost of Phase 1 but so far, nothing has been heard from our jaga.

Hmm .. got time to wear other people’s gold medal but no time to disclose the use of billion$ in past reserves?

MPs, if they truly represent the people, should act responsibly and not be sleeping in bed with the jaga. Very unhealthy for the country. Just provide some simple facts and figures. Nothing as complicated as NAC’s rubbish centre.

The conversion of land assets back to financial assets, ie return of past reserves, will take probably a decade in the case of Tuas mega port. This is because reclamation will be only completed by the early 2020s.

Whether Tuas mega port will prove to be a runaway success remains to be seen. Should Thailand’s Kra Canal become a reality, our multi-billion project may just end up a white elephant.

Original image at Clipart

We should also be mindful of costs overrun, as has been confirmed by our scholars’ track record. There will be repercussions such as the misallocation of budget, eg for social causes. Some instances of PAP’s overspending, excluding $283 million on YOG:

– Sports Hub by $533 million
MCE by $1.8 billion
– Circle Line by $3.3 billion (ST deleted online article, no trace leow)
– Uncompleted Downtown Line by $8.7 million (in 2012)

Hmm … how come never heard of benefit overrun by MCCY?

After PAP was caught dipping into our reserves 55 times, not 27 times, from 2002 to 2011, I hope Jaga Tony will start to act responsibly. After all, he’s not paid $1.54 million for nothing.

Just a few questions for our jaga:

– How many times has PAP dipped into our reserves since 2011 (not 2002)?
a 50 times?
b 100 times?
c 150 times?

– How much was requested each time?

– Which other PAP member/s was in the loop?

– How much has been taken out?
a $20 billion?
b $30 billion?
c $40 billion?

– How much has been returned?
a $5 billion?
b $10 billion?
c $15 billion?

– How much will not be returned?

DPM Tharman has given the impression that past reserves will be returned in full after converting land assets back to financial assets. However, this is not possible in every case. For example, money could be returned after HDB flats are sold in the case of SERS but not possible in cases of cost overruns.

Where the Tuas mega port is concerned, payback is likely to take a decade or longer. After prime land has been freed up, it needs to be developed into residential/commercial property. The PAP also needs time to increase the population to above 6 million or there will be no occupants for the newly developed property.

It’s impossible for Jaga Tony not to have used his second key: he has handed billions in past reserves, numerous times, to PAP. However, I find it strange that he has conveniently forgotten his obligations to taxpayers, his real paymaster.

$875 million awarded to Daelim, a South Korean company
$1.6 billion awarded to Dredging International, a Belgian company

20160826 How many “Arriums” do CPF members/GIC own?

I refer to ST article “GIC keeping close tabs on cash-strapped Arrium” dated 26 August. Why is it keeping tabs on Arrium only after its shares have become worthless?

If GIC had been monitoring its investments, it would have been aware there were fundamental changes affecting the company, got rid of the lousy investment and at least recoup some losses. Now that its entire investment has been wiped out, what is there to keep tabs on?

Arrium did not go into voluntary administration yesterday, last week or last month but some four months ago. Despite massive losses of more than A$400 million, MSM was dead silent. And out of the blue, this became news today (26 August 2016).

Coincidentally, I posted “Another CPF/GIC investment gone ‘pock kai, more than A$400 million loss” yesterday (25 August). This was with reference to Arrium.

The ST report stated GIC held only 8.21% of Arrium. This needs some clarification.

GIC held 8.21% of Arrium in March 2015 …..

..but it had increased its shareholding to 9.33% by June 2015, according to its Form 604 submitted to the Australian Securities Exchange (below).

According to the filing, GIC had increased it stakes between 7 March and 29 May 2015 and 29 May 2015.

A favourite ‘strategy’ of GIC (and Temasek) is ‘bottom fishing’, ie anyhow buy when when prices have collapsed. GIC has been repeating mistakes made by novice investors.

Arrium was ‘cheap’, value for money, to GIC because it had fallen from a high of about $3.50 in 2010. Arrium is now cheaperer but CPF members are poorer.

The share price of any company doesn’t tank for no rhyme or reason and it’s about time GIC ceases to assume all other investors are stupid. Granted collapsed share prices may recover, GIC’s record speaks for itself, ie UBS and Citi are still near record lows after 8 years.

GIC must manage our CPF in a responsible manner, no more hoping for miracles or ‘tikam tikam’.

GIC should bear in mind that it is not investing PAP funds, Ah Kong’s money or on behalf of their directors’ families: $300 billion belongs to CPF members. Ordinary citizens slog a lifetime to enjoy our retirement: we do not want the PAP to continue tweaking CPF rules to delay CPF withdrawal due to heavy investment losses which could have been prevented.

What’s worrying is there are many other mini Arriums in China, India, etc which will make headlines during the next financial crisis. How many ‘Arrium” investments do CPF members own?

20160825 Prata or people’s president?

MSM, PAP’s in house newsletter, has expectedly gone into propaganda overdrive after former president Nathan had died.

It has engaged in outrageous half truths and lies. Was Nathan really the people’s president? Or a prata president? Most Singaporeans that I know never considered Nathan the people’s president for obvious reasons.

Nathan was never elected into office in 1999 and 2005. This was due to PAP’s constitutional criteria which easily disqualified non-PAP presidential candidates. Since no elections were held – nobody knew how popular or unpopular Nathan was – how could he have been the people’s president? MSM talking cock right?

To confirm this, Tony Tan won only by a whisker when a real presidential election was held on 27 August 2011. Tony Tan received only 35.2% of votes, a mere 0.4 % higher than runner up Tan Cheng Bock. Is Tony Tan a “people’s president”?

In death, Nathan has been recognised in ways he wasn’t when alive; nobody saw him as “A giant of our times”. If he were alive and watching, he would probably be laughing so hard at the comedy.

Respect can never be earned through propaganda. If Nathan wasn’t respected while he was alive, neither should respect be shown when he is dead. The real Nathan is not the same as portrayed by PAP controlled MSM.

Objective as I am, many will be quick to label me ‘disrespectful’. But it is the MSM that has been disrespectful because it shouldn’t elevate a human being to a state of perfection just because he is dead.

Talking about being disrespectful, recall the insincere ‘condolence’ letter written by PM Lee to Kenneth after his father JBJ passed on. Now, that was being disrespectful.

A lot of events regarding Nathan related by PAP are unverifiable and thinking Singaporeans should take them with a warehouse of salt. PAP has been known to rewrite its own history, ie in Social Studies textbooks, by withholding archived cabinet records, etc.

Nathan’s civil service career may have spanned 5 decades but ‘serving’ is synonymous with ‘self serving’ under the PAP. Top civil servants and ministers are merely million-dollar leeches in our system and over a lifetime, each is paid tens/hundreds of millions in tax dollars.

In a 2011 interview, Nathan clarified his position on his out-of-this-world $4.26 million salary. He said:

“I didn’t ask for it. That was the rate for the job, that’s what I accepted. You don’t like the rate, I can’t help it.”

The fact that the president’s salary has now been reduced by $2.7 million to $1.54 million is confirmation that Nathan had been overpaid by more than $15 million during his tenure as president. This amount could have gone to needy Singaporeans but instead went into the bank account of one man who was supposedly serving citizens.

Even if Nathan had not wanted to fight the parasitic system, he could have been exemplary by donating excess tax dollars, money which he knew could not be used in the afterworld. Nathan was already 87 years old.

Nathan merely followed PAP’s script to the letter by helping to raise funds glamorously at President’s Challenge charity events. Shame on him for first taking from the people and then making use of the people to raise funds by milking public sympathy.

Nathan was also supposed to hold the ‘second key’ to prevent our reserves from being squandered by future rogue governments. In reality, PAP’s first key and prata president’s second key moved in tandem. All these keys are just wayang and it makes no difference even if we had 100 keys: PAP has the master key to the nation’s vault.

Prata president was unaware that our reserves were used more than 27 times from 2002 to 2011. Not only was he unaware that tens of billions were taken out from our vault an additional 28 times by PAP, he could not even state the amount taken out. Safeguarding our reserves or sleeping on the job?

Was he even aware that since our first elected president, our reserves were used probably 100 times when he stepped down?

One should not forget an important chapter in Nathan’s history: he worked as a Japanese translator during the Second World War. The Japanese were committing atrocities everywhere and Nathan was in fact aiding them instead of fighting against them to free his country. Should such a person deserve any respect?

MSM should paint a balanced picture of Nathan; a perfect man Nathan was not. Dead or alive, a person should be accorded the same amount of respect. Hopefully, MSM will tone down the propaganda when Tony Tan meets his maker.

Nathan was, and will always be, a prata president to me.

RIP ex fellow human being.

20160825 Another CPF/GIC investment gone ‘pock kai’, more than A$400 million loss

I refer to a May 2015 post, “GIC investing our CPF using ‘tikam tikam’ model, based on hope”, where I had highlighted “Arrium Ltd”, an Australian company with business interests in mining, mining consumables and steel.

Sadly, Arrium recently went into Voluntary Administration in April and the chances of shareholders getting back a single cent is as good as NIL. (see email from Arrium Ltd Administrators below post **, thanks to Steven Dahlin)

Last year, I had estimated the unrealised loss of more than A$300 million based on GIC’s 241 million Arrium shares trading at A$0.18.

GIC’s shareholding as of March 2015

GIC subsequently increased its shareholding and is currently the biggest shareholder


(Instead of cutting loss, as Allan Gray Australia Pty Ltd, Arrium’s then largest investor did, GIC increased its shareholding by another 34 million shares. Even Highlere, then 3rd largest shareholder, had trimmed its shareholding.)

Based on GIC’s increased shareholding of 274 million shares which are now worthless, it is likely that GIC has lost more than A$400 million on behalf of CPF members and taxpayers.

Just how many “Arriums” are there in GIC’s books will never be known. But rest assured, judging from GIC’s recklessness, many of our CPF investments are in ICU.

Email from Arrium Administrators
24 August 2016
Dear Charles
Arrium Limited (Administrators Appointed) (‘Arrium’)
Thank you for your email of 19 August 2016.
The Arrium companies were placed into Voluntary Administration April 2016 because they were considered unable to meet their debts when they became due. Those debts included repayments and other obligations towards about $4 billion of debt. That position remains unchanged, even though some parts of Arrium may be trading profitably at an operational level. The cash generated from operations is not enough to service the debts. The difference under Administration is that debts are frozen while the Administrators try to find a future for the company.
Our statutory role is to act in the interests of creditors as a whole and to maximise the chances of a company – or as much as possible of its business – continuing in existence. The Administrators explored all options before embarking on the current strategy described in our bulletin of 4 July 2016 (see http://www.kordamentha.com). This was after consultations with the Committee of Creditors elected at the First Meeting of Creditors. Alternative strategies, in our view, would not have helped achieve our obligations and would have exposed the Arrium group of companies to alternatives that may not have been in the interests of creditors as a whole.
Under insolvency law, shareholders are not entitled to participate in creditors’ meetings and rank behind employees and unsecured creditors and other parties owed money. While we sympathise with the position of shareholders, we must act in accordance with our legal obligations and in the interests of creditors as a whole. Unsecured creditors are not likely to be repaid in full, but we must aim to achieve the best possible outcome for them.
Yours sincerely
Mark Mentha