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)
1994 to 1998
1999 to 2003
2004 to 2008
2009 to 2013
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.