20140217 Singaporeans’ retirement savings sucked into a CPF black hole

Singaporeans who had started working decades ago planned to rely on OUR CPF funds for retirement. However, the PAP government arbitrarily tweaked policies to the extent that most of us must have money in our CPF accounts after we are dead. Why?

The government did not consult us on the use of OUR money in high-risk investments in overseas properties and share markets. Worse, it takes OUR money and tells us we are not entitled to know where it is invested.

Without any transparency, the people’s trust of the government has been depleted. If indeed the government was given a mandate by CPF members to invest OUR money, would hundreds of thousands be presently demanding our money back?

Below are my thoughts based on publicly-available information.

1 The CPF system is inherently unstable because its objective is no longer to provide for retirement but includes housing, investments and educational needs. The biggest component is of course housing, with the majority putting in their entire life time savings. Understandably, retirees are asset-rich but cash-poor. The system has failed largely due the high property prices.

2 OUR CPF money used for 30 year mortgage installments was meant to generate income for retirement. After housing contributions hvae depleted our CPF accounts, the PAP has still not addressed the issue of housing over-investment. Instead it has continued to PAPer over long term issues with short cuts ie. continuously tweak CPF policies and force citizens to maintain an increasing amount in our CPF accounts.

3 Regular CPF savings housing installments provide a boost in real estate prices and create an illusion. This illusion is about to be shattered because of the impending withdrawal from the CPF to meet baby boomers’ retirement needs.

4 It appears our CPF policy has been tweaked to prevent the largest outflow in anticipation of all 470000 account members reaching retirement age in 12 years time. Legislating a higher retirement age will also prevent members from withdrawing.

5 Tens of thousands of foreigner have already renounced their PR during the last decade. There is nothing wrong to be here only for the money as the government treats both PRs and citizens as economic digits. Within the age profiles of 35 to 54, there lies a golden opportunity for as many as 200,000 PRs to cash out on their properties and retire very comfortably back home. (see chart above)

6 The forex reserves of a country are used to protect its currency against speculative attacks and not OUR CPF money which is invested in Singapore government securities and managed by GIC. http://thehearttruths.com/2013/05/22/how-is-your-cpf-money-being-used-and-taken-away/ CPF net balance amounted to about $230 billion managed by GIC. CPF Trends How does revealing GIC’s stake in all its foreign investments amount to a speculative attack defies logic.

7 “From 2003 to 2006, the amount of contributions for each quarter ranged from around $3 billion to $5 billion”. CPF Trends 2009
Fast forward to 2011 and 2012, the amount of contribution each quarter is only $3.25 billion and $3.5 billion respectively.

CPF Trends Oct 2013

8 About 200,000 residential units will be built from 2013 to 2016. Khaw 120,000 will be public housing to meet the huge pent up demand, no thanks to the epic failure of the HDB. CPF withdrawals for housing will pose an additional strain on available CPF funds.

9 At $40,500, the Medisave Minimum Sum earns an interest of $1,620 per year. (not every month as one minister claims to have received his statements ) The interest alone allows for a couple in their forties to purchase insurance policies with zero cash outlay in the event of hospitalisation. NTUC However, we are forbidden to use OUR CPF money to pay for the rider. The amount in the Medisave will only continue increasing until we meet our maker. Clearly, the intention is to retain OUR money.

10 To ordinary Singaporeans, the Minimum Sum (MS) amount simply means we have only the minimum amount in times of need. For those who have just entered the workforce, ‘don’t say the government din tell you how much it wants from your retirement savings’. (table below)

After housing obligations, ordinary citizens are unlikely to meet MS amount. The government is effectively locking up as much of OUR lifetime savings as it can. Parliament is dominated by yes men who do not represent our interests.

3% 4% 5%
2023 207600 228700 251700
2033 278900 338400 410100
2043 374800 500800 668000


11 Current stock market prices are supported by central banks printing trillions of dollars and has nothing to do with fundamentals. The government is also acutely aware of this.
Long-term chart pointing to a massive correction coming our way.


12 We have no say in how OUR money is invested and are really worried about how GIC Pte Ltd punts the market. How could its ‘due diligence’ lead to a total wipe-out in a single deal property deal? previous article
Can we trust a fund manager which took only 3 days to decide on investing $14,000,000,000 in UBS? Bloomberg article Are we not paying millions to fun(d) managers to punt? Why does the government deprive us of a choice and channel all OUR lifetime savings into only one fund which, like any other fund, could also go bust?


To the government, grandpa-aged citizens are all fools who will squander all our savings away and the only wise fund manager to assist us is GIC.

Without any transparency, the government cannot simply expect CPF members to believe in its track record. More often than not, its investment ‘strategy’ is to simply invest regardless of the phase of stock market/business cycle. Or worse, punting.

The government has anticipated an impending huge withdrawal by the retiring baby boomer generation, tens of thousands of foreigners renouncing their PR to retire back home comfortably with their CPF money and pent up housing demand. These appear to be the real reasons for CPF policy changes.

The government does not have the mandate to deprive us of increasingly lesser amounts of OUR savings after working 4 decades. The CPF black hole has left CPF members worried.

Although the PAP has taken credit, it was the British colonial authority which introduced the CPF in 1955. link

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