20140802 Huge increase in CPF Minimum Sum limit to prevent massive withdrawal by baby boomers, not acceptable

The CPF Minimum Sum and CPF Life schemes do not make any sense and have hurt the majority of CPF members. The PAP government is aware of this but since it has absolute power, it will not acknowledge its ‘error’. PAP MPs would of course have heard from thousands of their constituents but prefer to remain silent. MPs with this kind of attitude receiving $15,000 tax dollars monthly are correctly described as ‘jiak liao bee’.

The recent contributions to the total CPF balances are really huge when seen in the perspective of past contributions. Let’s take a look at the different 5-year periods.

1989 to 1993 (amount in millions)

1989 1990 1991 1992 1993 TOTAL
2,444.0 3,107.7 3,436.5 3,609.9 -522.2 12,075.9

1994 to 1998

1994 1995 1996 1997 1998 TOTAL
3,977.6 6,270.0 4,078.3 4,398.3 2,370.5 21,094.7

1999 to 2003

1999 2000 2001 2002 2003 TOTAL
14.7 -478.4 -566.5 1,304.1 4,001.7 $4,275.6

2004 to 2008

2004 2005 2006 2007 2008 TOTAL
4,959.0 4,238.2 2,089.5 6,555.1 9,265.1 27,106.9

2009 to 2013

2009 2010 2011 2012 2013 TOTAL
9,404.4 12,374.2 14,184.8 14,321.6 13,666.8 63,951.8

Source: MAS annual reports (see statistical index)

2009 to 2013 amount of increase same as preceding 20 years. Why?

Last 5 year increase = total amount of preceding 20 years!

From the table above, the PAP has increased CPF total contribution by about $64 billion from 2009 to 2013. This is almost similar to the $64.5 billion contributed in the preceding 20 years!

PAP was aware of massive baby boomers’ withdrawal

The biggest group of CPF members are those born between 1947 and 1964, known as baby boomers.

But before they could withdraw their retirement savings, the government legislated the increase of CPF Minimum Sum, doubling it from $40,000 to $80,000 within only 8 years from 1995 to 2003.

This appeared to be insufficient for GIC and yet another round of increase was legislated with the MS almost doubling from 2003 to 2014.

Total CPF balance stood at about $96 billion in 2002. If retirees had been allowed to withdraw, CPF balances would at most have remained the same or more likely reduced. Instead, the CPF balance has increased by $163 billion to $259 billion in March! The facts do not gel with every PAP ‘clarification’.

CPF = Ponzi scheme?

There are striking similarities between our CPF and a Ponzi scheme:
– There is zero transparency in how and where our CPF is invested.
– Not only is the base of new CPF ‘investors’ increasing, existing members’ funds are being trapped by ever-changing policy tweaks.

The government could have easily quashed such speculations with transparency but why doesn’t it?

For our retirement or GIC?

When the PAP says the increase is for our retirement needs, it appears to be trying to pull a fast one on us. If it was so caring and has acted responsibly, the logical action would be to increase salaries. Instead, salaries have not even kept pace with housing inflation and, worse, for low income citizens, they have remained stagnant for the past 15 years.

3 years ago, 55% of Singaporeans could not meet the CPF MS. By setting the MS limit higher, even more members will be unable to do so. So what is the real motive of the PAP?

Why is PAP channeling so much CPF monies into GIC?

The reasons given by the PAP really defy logic and common sense and will never be acceptable by CPF members. CPF monies do not belong to the PAP.

GIC has been the recipient of an ever-increasing amount of cheap funds from our CPF. Questions:

– Is GIC unable to generate sufficient returns to pay CPF members without more funds?
– Has GIC lost too many investments during the last financial crisis and requires more CPF monies?
– Is GIC solvent?


From a CPF member’s perspective, a lot of things are not quite right. The government has been forcing citizens to save into a low returns account for the GIC to use as and when it pleases. This also raises the question of GIC’s solvency.

If the PAP was really concerned about our retirement shortfalls, the logical thing it would have done was to increase salaries or supplement retirement shortfalls with Temasek Holdings’ profits. It did neither. The huge increase in CPF MS is clearly to prevent the massive withdrawal of baby boomers. This is not acceptable and the PAP therefore needs to return us our CPF.


I should have used these charts below instead of “CPF 5 year contributions”.  It shows the yearly withdrawal under CPF Act section 15 ie. at age 55, including leaving Singapore and West Malaysia permanently, etc. Baby boomers form a large segment as well as they have substantial amounts of CPF after paying off housing bought during the 80’s when it as truly affordable.

But the sums withdrawn have not increased proportionately to the huge number of retirees.


According to 2011 CPF data, members aged between 45 and 55 had about $71 billion in 2011.  With the MS effectively at $198,500, only a very small amount will be able to leave GIC upon members reaching 55.




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13 Responses to 20140802 Huge increase in CPF Minimum Sum limit to prevent massive withdrawal by baby boomers, not acceptable

  1. James says:

    What you’ve written about the PAP’s intentions is spot on! Even fools will struggle to deny it. But Singaporeans are selfish and self-centred and lack the wisdom to make the right choices. So they will continue to suffer instead of standing up and will only regret it when it’s too late.

  2. phillip ang says:

    🙂 The effects of propaganda are undeniable. Most PAP policies are flawed for the simple fact they are ALL profit-based.

  3. Isupportyou says:

    I supposed it is for the simple reason that their take home pay is pegged to certain kpi. The most obvious quantitative measurement for kpi is how much each policy can increase the $$$$……
    In other word, profit, profit and still profit.

    • phillip ang says:

      The only check on the government is the people. Parliament is a walk over for PAP and if we remain silent, our country will soon fall over the cliff. Citizens may take a long time to wake up from political apathy due to fear, decades of conditioning and propaganda. Patience is needed.

  4. Anonymous says:

    I do not have the time or resources to look into this. But I thought that you might do be able to do it. If you assume that all the CPF funds have been channelled into GIC and add the gains derived from them as they claimed in their annualised returns the total should exceed the total funds in the GIC today. It would therefore appear that the losses incurred were massive, thereby reducing the total assets of GIC to what they are today. This also brings out the issue whether other assets were indeed added to the CPF funds injected into GIC as claimed by Tharman

  5. Isupportyou says:

    I understand where you are coming from, your method will work best if the returns have been fairly uniform. However, you may wish to know that the returns have been erratic if I may say. In 2013, the loss is about 10B.
    We all know that mathematically, if the exact values of parameters are not known, the results can be anything you want and this could be reasons. If all the actual datas were provided, we know for sure what is the correct answer although one can argue that this is not a simple linear equation and therefore the answers maybe 2, 3 or 4…..??
    But, we can eliminate them 1 by 1 if they are indeed logical answers.

    • phillip ang says:

      GIC has avoided providing any meaningful data. DPM Tharman’s and other ministers’ clarifications are testament to this. It is frustrating for people like Leong Sze Hian and others but even with the lack of data, Roy has managed to elicit a response from the government. Presently, we can only infer from available data. But no one can say its speculation because they are just as in the dark. Only GIC can but is unlikely because it will need to disclose all the data which they are presently trying to conceal. Who knows, we may soon reach a point where disclosure is necessary.

  6. Xmen says:


    The last financial crisis could have wiped out gains from previous decades combined. Also, in accounting, you may avoid marking assets to the market by “holding” them to maturity. Banks are notorious for such manipulations. That’s why a seemingly sound bank can collapse overnight. I hope there is not a whole lot of accounting shenanigans going on. I always find it amusing when they claim they are investing for the long term – 30+ years. Yet some of those long term investments were sold within years. LOL.

    • phillip ang says:

      The way GIC is investing is no different from any fund. Once the amount is raised, just buy something from the market, charge a management fee and hope for the best.
      2 days ago, GIC sounded a warning on the investment climate and said “the prices of ALL major asset classes have been inflated by the massive stimulus measures, and now face weak future returns”. And guess what GIC has been doing – it has been buying as if there’s no tomorrow with CPF monies! Google GIC on Bloomberg/Reuters and you can see the transactions which GIC prefers to publish less than half on its “newsroom”.
      Remember 200 plus year old Barings bank also collapsed under the watchful eye of our regulator in 1995. The problem with GIC is there is no regulator. The amount involved is more than 100 times larger than Barings’ loss.
      Temasek also claims it is a long term investor but its transactions confirm otherwise.
      GIC has too many ???. Just read the FAQs – all these lengthy explanations are meant to confuse the public.
      Thanks to Roy, GIC is now busy editing its website.

    • Isupportyou says:


  7. Xmen says:

    I believe the SWFs are currently holding “long term” investments in financials – coupon paying bonds with high interests but are actually worth much less if marked to market. Given the low market value of those bonds, they really have to invest for the looong term… LOL.

    The bailout of Olam was particularly ominous. Why would a public funded SWF be run like a speculative hedge fund? They lost billions of dollars during the financial crisis when they made HUGE investment decisions within a short few days. Where were the due diligence? Do they even have internal risk control? Are there even people doing the oversight? This is a huge corporate governance problem.

    • phillip ang says:

      Temasek and GIC are only SWFs in name only. They are actually speculating with public monies because increasing amounts can be legislated into them, no questions asked. When GIC made the $$14 billion UBS decision within 3 days, ‘due diligence’ = reckless investing. What GIC was doing is clear – bottom picking. It is no better than a local punter. It had wrongly assumed the investment landscape had not changed and made many wrong assumptions. GIC was living in the past. The recent aggressive investments are probably at/near a cycle peak but do they even care when its not their money!
      Temasek’s investment in Barclays resulted in 800 million pounds within a year and a half also shows it is not the long term investor as claimed.
      But Singaporeans are the losers because there has been no accountability. Instead, every PAP affiliated entity is given a pat on the back! The sooner Singaporeans get rid of these jokers, the better off we will be.
      GIC and Temasek must open their books. No one really knows how big the hole is. Many questions, no answers except wayang by minister after minister. : (

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