20140730 CPF questions and their ‘factual’ answers

The PAP government needs to come clean on the CPF issue which has been festering for decades. Millions of words have been spoken and printed but CPF members remain in
the dark. The PAP government will only lose more credibility and legitimacy in the eyes of citizens if GIC continues to operate in an opaque manner.

I strongly believe that the PAP government has gone all out to conceal factual information from the public because it knows the truth will hurt. The public has the right to know the facts. I believe the factual answers (FA) from GIC to all the CPF questions will go something like this:

Q1 Why does the government not invest our CPF directly in GIC when it could have easily done so?

FA If CPF is invested directly in GIC, the government would be held accountable with annual reports detailing its performance. Publishing the losses and poor performance of some of GIC’ investments is not in the interest of the PAP government. The managed perception of the PAP government will be dented.

Q2 Is CPF a Ponzi scheme?

FA The comparison is not totally wrong because we operate in an even more opaque manner ie. no regulatory oversight. As confirmed by Minister Lim, ”many investments had been lost during the global financial crisis”. As the public already knows, the biggest unrealised loss is of course the investment in UBS. Since this huge chunk of money is earning a derisory return of 0.2%, we have to take higher risks with the balance investment funds in order to pay CPF members. We have received almost $100 billion of CPF monies during the last 5 years. Some of these are from new members with the rest from retirees. The government helps to legislate the retention of retirees’ savings for our investments. The increased Minimum Sum amount is based on the whims of the government, there is no consistent yardstick and CPF members do not have any say.

Q3 But what about information already published on GIC’s website?

FA Most of the information is intended to confuse and maintain the public’s perception that GIC has the unquestioned right to invest CPF monies. It doesn’t. GIC FAQs Many of the questions have not been answered and our strategy to confuse the public has continued to work. Even for a simple question like “Does GIC invest money ffrom the CPF?”, we publish a lengthy answer when it could have been a simple ‘yes’ or ‘no’. Read the entire FAQ section and you will understand our obfuscation strategy. It’s the same with CPF and other government policies

The answers tell you basically nothing of importance and we expect you to simply accept our word at face value. We have operated in secrecy for 30 years and we are not going to change simply because the public demands for change. We did succumb to the pressure from Roy Ngerng and edited GIC’s webpage but we leave it to the public to decide whether we did the “right” thing.

Q4 Is GIC a conservative fund manager as stated by the government?

FA It is evidently not so as you can see from our investing strategy. The public cannot be that daft. Simple Maths – invest for 7% or 9% returns in preferred securities, profit from CPF members by paying them 2.5% to 4%. Profits then channeled into GIC again. We had based our investment on past performance and taken huge risks in an extremely volatile situation during the financial crisis. On hindsight, this is an epic mistake. Our present strategy is best described by a Reuters article “GIC bets big on Chinese debt” where our approach has been correctly described as “newly aggressive approach from GIC” and “it also contrasts with the liquidity-driven investment philosophy of other sovereign wealth funds which typically invest taxpayers’ money in high-rated and well-traded securities”.

Q5 How can GIC be concealing any information when it has news on its ‘Newsroom’?

FA For 2014, GIC has listed 9 news reports on its ‘Newsroom’. Just google ’GIC Singapore’ on Bloomberg or Reuters and see the difference in the number of news reports. We are being selective because we do not want to attract any attention to our investments. Public scrutiny will lead to more questions and more headaches for us as there are no logical explanations for some of our investments. Take for example our big bets on Chinese debts. How do we explain to the public we receive only 4.7% return on US$700 million worth of unrated bonds or 3.2% return from internet group Tencent Holdings? Any Ahmad and Ah Beng can see the GIC will profit 0.7% from the 4.7% and 3.2% paying respectively 4% and 2.5% to CPF members’ MA and OA. We are of course aware that there are exchange rate risks which may even wipe out all our returns and of course we do not want to entertain such questions.

Original image from The cartoon bank

Why are CPF monies used to fund Chinese companies for peanuts returns? Is there a secret deal between the two governments which Singaporeans are unaware?

Q6 Is GIC investing all CPF monies? What about HDB concessionary loans where flat buyers pay 0.1% above the returns of other CPF members’ 2.5%?

FA This is really a no brainer. The HDB/government does not take any risk, including interest rate risk. HDB charges 2.6% but government pays 2.5% confirms the use of CPF monies by the HDB. GIC does not invest in the CPF monies used for HDB concessionary loans. We are in fact investing a lesser amount than assumed and this is also one of the reasons for our opacity. Also, since we do not invest all CPF monies, we therefore cannot pay any higher returns as demanded by CPF members.

Q7 Since the largest SWF, Norway’s Government Pension Fund Global, has published its entire investment portfolio of more than 30 real estate holdings, 1000 bonds and 8000 equities, will GIC do likewise?
FA No. It will be a complete embarrassment because some of our equities are deeply underwater, somewhere in the Mariana Trench. We took high risks with CPF monies and ended up in the current situation which we are still trying hard to salvage.

Singaporeans should not expect GIC to publish such information.

YEAR 2007
AMOUNT INVESTED CHF 11,000,000,000
INVESTMENT DURATION 7 years 7 months

Q8 Is the government using CPF members’ funds to punch above its weight?
FA Of course. GIC would not be ranked the 8th largest SWF today without CPF monies.

Q9 Will the government be more transparent in future?
FA No. We have concealed too much for too long and there will be repercussions. What we will do is beat around the bush in parliament. Our repeated ‘clarifications’ in the media will exhaust the public.

No Singaporean should expect any transparency from our government. The PAP thrives on opacity, no accountability and total control of parliament. Why should it be transparent when it can afford not to be as it has been doing so for decades? No political party with absolute power has ever willingly ceded control simply for the good of citizens.


A list of 8 questions from a banker has been forwarded to Roy Ngerng and Leong Sze Hian by TR Emeritus for them to answer or get “the Government to answer”. It is unlikely our fellow concerned citizens have the answers and more unlikely will the government be upfront with their replies, if any.

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4 Responses to 20140730 CPF questions and their ‘factual’ answers

  1. Alan says:

    Notice one thing. Our PM has yet to come out to utter one single word in the whole sorry state of affairs regarding our CPF funds. Why ? Isn’t it strange ? Is it because of his wife’s ‘conflict of interests’ position ? Or is it because he is guilty conscious ?

    • Phillip Ang says:

      CPF has evolved into a scam. All the CPF tweaks and changes through the years is to support high PUBLIC housing prices and high healthcare costs. There will always be insufficient for retirement. Example: A person earns a total of $1 million working 35 years contributes 20% CPF = $230,000 for housing. (3% from employer) Can only buy a 3 rm new HDB flat. If he earns total of $1.5 million, his CPF contribution = $345,000. struggles to buy a $3 rm resale if include interest payments.
      In order to get a basic 4 rm for a family with 2 children, a dual income is a must. After paying off the house, there is hardly any CPF for retirement. It’s a fact majority of citizens do not have the Minimum Sum amount at 55.
      PM Lee should know the sums just don’t add up. So it’s better he doesn’t talk or else kena bombarded more.
      It’s not strange that our leaders remain silent on major issues. Just look Tony Tan!

  2. wongcheokwan says:


    (I noticed a blogger appended a foto/mentioned name and got sued.Lust for money is the root of all evil.)

    • phillip ang says:

      Yes. There is a big issue with this o.5% figure. But it’s not a loss. Converted to Singapore dollar, GIC has been making much less than in US$. So the reason why it prefers to state in US dollar is to hide the minute figure in Sing dollar. 0.5% is unacceptable and the government knows that.

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