20131122 CPF savings belong to members, not for PAP to determine when we spend

There has been recent online discussion and confusion over the CPF Retirement Account (RA). The RA needs some clarification and CPF members cannot be totally faulted for their ignorance. The PAP government’s frequent tweaking of policies without public consultation has also been a huge contributing factor to the confusion.

CPF Retirement Account

The RA was created in 1987, a separate account to ensure Singaporeans have ‘sufficient’ income during our golden years. This is not an overnight development as have been suggested from many recent online feedback. More information @ BT article, 13 May 2013

Tweaking all the way until members cash withdrawal drops to…. ZERO

The RA started with a Minimum Sum (MS) of $30,000 in 1987, increasing at a rate of about 3 per cent to $35,400 in 1994. It suddenly jumped to $40,000 in 1995 and increased by $5,000 per year to $90,000 in 2005. http://mycpf.cpf.gov.sg/NR/rdonlyres/27ACA8E5-7D0D-431F-B74B-D8D3A3E43463/0/CPFTrends_MSS.pdf

Between 2006 and 2013, it soared from $94,600 to $148,000. (averaging $7,600 per year). CPF MS table

1987 $30,000
1994 $35,400
1995 $40,000
2005 $90,000
2010 $123,000
2011 $131,000
2012 $139,000
2013 $148,000

MS bordering on insanity, ALL members MUST reject
(White line shows increasing MS, orange bar shows decreasing number of CPF members ability to meet the required (increasing) MS)

In 2009, the CPF Board had acknowledged the percentage of members who met the required MS had dropped from 57.1 per cent in 1996 to 33.8 per cent in 2008. CPF Trends, June 2009 (pg 2) The contributing factor was the huge increase in MS from $45,000 to $106,000.

The current MS of $148,000 is a huge increase of $42,000 from just 5 years ago; averaging $7,000 a year. The increase of $42,000 during the last 5 years would also have reduced the percentage of members who meet the required MS.

Minimum Sum
Year From To From (%) To (%)
1996 to 2008 $45,000 $106,000 57.1 33.8
2008 to 2013 $106,000 $148,000 less than 33.8 %??

Knowing full well that a lesser number of CPF members are meeting the required MS, why does the government allow the MS to continue skywards? Why does the government insist on locking up even more CPF members’ savings in the RA until we die? Is the CPF really short of cash as many have speculated?

(Please read blog @ Furry Brown Dog for past articles on CPF)

Projected insanity

Another blogger projected the MS under different inflation rate scenarios.

Inflation rate 3% 4% 5%
Year 2020 $190,000 $ 203,000 $217,400
Year 2025 $220,200 $247,300 $277,500
Year 2030 $255,200 $300,900 $354,300
Year 2035 Afterpaying mortgage ordinary
Year 2040 citizens NO money leow

(The above figures are taken from this blog http://madstranger.blogspot.sg/2013/05/cpf-minimum-sum-for-jul-2013-and.html)

Come 2030 when our population reaches about 6.9 million, the MS would have increased to $300,000! (assuming 4 per cent inflation)

What is the PAP government’s objective?

Any ordinary working couple servicing a mortgage loan during their working years certainly won’t have $300,000 in their CPF OA and SA at 55.
Even if half the amount is pledged with property, the majority of members will still have a shortfall. It has already been confirmed by the above example where only 33.8 per cent of CPF members had met required MS when it was only $106,000.

Does the government expect members to raise a family in a 2 room flat until retirement, forever eating three meals in a hawker centre with the occasional treat at a food court?

CPF savings belong to members, not for PAP to determine when we spend

It is only logical, and also our right, to question the PAP government because the hard-earned money belongs to individual members. How can any government serve the people:
– by taking their hard-earned savings to invest/speculate without consultation?
– during the period (after working for 35 years) they need most?
– keeps changing policies to ensure an increasing amount cannot be withdrawn?
– insist on keeping our money (for investment/speculation until we are dead?

Members who were told a decade or 2 ago that their money would be available upon reaching 55 are now forbidden to do so. A government which locks up the people’s savings in a ‘cannot-tell-you-where-the-money-is’ account has lost the trust of its citizens. The government’s short-sighted planning (frequent tweaks) has also affected citizens’ long term planning.

MS is discriminatory

While the rich are not affected by any increase in the MS amount, ordinary folks and the lower income will be screwed big time.


Grandpa/grandma aged CPF members do not need any PAP nanny to control when/how we spend OUR money. The PAP government has a bad habit of perpetually tweaking its policies (not just CPF). Due to a complete lack of transparency, there is much anxiety among citizens who fear our money has already been lost in bad investments.

The PAP government is effectively forcing CPF members to lend its investment arm to invest/speculate, paying us in installments (with peanuts returns) till the day we die. Presently, those who die between the age of 55 and 65 will not be able to enjoy the fruits of their lifelong labour.

By freezing the use of our CPF savings during this period (55 to 65), the government guarantees the increase in the number of “dead poor”, which PM Lee has denied its existence. Perhaps he is right there may not be such a category of “dead poor” in Singapore because the poor would have already been dead. The policy is discriminatory.

The PAP government has a track record of not consulting citizens when it comes to policies which hurt ordinary folks. This looks set to worsen.

Phillip Ang

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