20140412 MOM’s ‘clarification’ a rehash of CPF FAQs, CPF policy flaws glaring

It is strange that the MOM has attempted to clarify ‘misperceptions about CPF’ instead of CEO Yee Ping Yi of CPF Board. CEOs of government agencies should learn how to handle issues concerning the public instead of hiding behind ministries and ministers or else this will lend credence to “jiak liao bee”.

MOM attempts to explain the need to pay back interest for the use of OUR CPF savings after the property is sold:

– MOM states “When we withdraw our CPF savings to pay for a property, we are actually taking out money meant for our own retirement”. This begs the question – why are we allowed to use our retirement savings for housing (consumption, interest payments to banks) in the first place?

– MOM says “if the sale proceeds are not enough to cover the amount we need to put back, there is no need for us to top up the shortfall”. You only need to have average intelligence to ask “where is the logic”?

In short, Singaporeans were initially told we need to save for retirement. To temporarily ‘resolve’ exorbitant housing prices, the government allows our CPF to be used. This policy also led to property prices spiraling out of control. But if there is a shortfall ie. not enough for retirement, MOM says ‘never mind’!

– MOM further contradicted itself by saying that “In short, the money being required to be put back into our CPF goes towards our own retirement savings, so that we are comfortable in our retirement”. For cases where there is a shortfall, can MOM please explain how are we expected to be “comfortable in our retirement”?

The next question it attempts to answer is the use for the Minimum Sum (MS) scheme and why the amount keeps increasing. But MOM is simply rehashing CPF FAQs, something we’ve probably heard a thousand times. The government is not bothered that our plans to rely on CPF funds after retirement are screwed. Many Singaporeans also need to fund their children’s tertiary education overseas because the government has prioritised foreigners over locals in education.

The real reasons MS scheme was introduced:

1 The government wants cheap funds for its investments in Temasek and GIC.
2 It is not contented with having the use of $65 billion of our savings in the Medisave Account. By introducing the Minimum Sum, the government also gets to use $60 billion in the Special Account and $29 billion in the Retirement Account.

Citizens do understand the failure of CPF and HDB:

1 HDB flats, including resale, are unaffordable. This is due to policy failure.
2 Because public housing is unaffordable, the government abuses the CPF system to create the illusion of affordability.
3 The CPF issue arises because of the PAP government failed to tackle the issue of high housing prices.

In short, HDB failure has led to CPF’s failure. Two failures don’t make one success.

MOM considers its rehashing CPF’s FAQs a clarification. It has yet to address the flaws in our CPF policy.


The MS amount was $45,000 in 1996 and $90,000 in 2006. The percentage of active CPF members who met the MS declined from 57% to 36% during the same period. As the MS increases, more Singaporeans are unable to meet the requirement. Instead of addressing the cause of insufficient CPF retirement funds, the government simply implemented a policy to trap our retirement savings and channel them into Temasek and GIC until we die. What is the objective?

Since the use of our CPF retirement savings has resulted in exorbitant housing prices, why are we still allowed to use the entire monthly CPF contribution for mortgage installments? Why did the government not address the issue of high property prices but instead maintains the CPF policy?

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One Response to 20140412 MOM’s ‘clarification’ a rehash of CPF FAQs, CPF policy flaws glaring

  1. Pingback: Daily SG: 14 Apr 2014 | The Singapore Daily

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