I refer to CNA’s “CPF Board to distribute S$29 m of surplus from DPS”. link
CPF DPS was privatised on 17 September 2005. Great Eastern Life and NTUC Income were the appointed insurers. CPF news release
CPF Board had decided that life insurance is good for all its members so every CPF member will be automatically included. Where money is concerned, it does not seek members’ consent but instead offer members the choice to opt out. Since 2005, the 2 insurers have made enough money from members that they have decided to return $29 million of their net profits.
Question: Before privatisation of the DPS, 28,000 families were paid a total of about $1 billion. link However, the CPF Board did not disclose the amount of members’ contribution. Why was the 16-year surplus not returned to members? Where did the surplus go? (one must expect DPS to be a profitable scheme)
With regard to the Medishield scheme administered by the CPF Board, the accumulated Medishield reserves was reported to have increased from $205 million in 2008 to $530 million in 2010. link At this rate of increase, the reserves should be more than $800 million this year.
1 Not expecting every cent to be returned to members, CPF Board should at least distribute a portion of the surplus. Why has this not been done?
2 With such a huge surplus, why do premiums keep going up?
CPF Board should return the surplus to members. Otherwise, Medishield premiums should not be increased.