20141201 CPF-financed privatised GLCs should be returned to CPF members to resolve retirement shortfall

The PAP has abused our CPF to finance infrastructure and even mandated low returns for potential retirees for decades. This is the reason for Singaporeans’ retirement shortfall.

In the first couple of decades post independence, our budget did not allow the PAP government to construct HDB on such a massive scale nor build new factories, ports and telecommunications, etc. With control of Parliament, there was nothing to prevent the PAP from channeling our CPF into any project at its whim. For a detailed explanation of how our CPF was used and its link to Temasek, read article by Leong Sze Hian and Roy.

The linked article carries this quote from the Minister for Labour and Communications in 1982:

“CPF savings form a large portion of Singapore’s savings. These savings are used for capital formation which means the construction of new factories, installation of new plant and equipment, expansion of infrastructure such as roads,’ ports and telecommunications, the building of houses and so on.”

State assets initially belonged to statutory boards but were subsequently corporatised and transferred to Temasek. Without CPF funds, some government-linked corporations (GLCs) may not have existed. The majority of them therefore rightly belong to CPF members.

Since GLCs belong to CPF members, they must be returned to their real owners. Only this will expeditiously resolve our retirement shortfall issue. The PAP should forget about forcing CPF members to take on additional investment risks, revert the withdrawal age to 55 and STOP micromanaging and controlling OUR money.

Why should CPF members’ investments in GIC be subjected to external risks such as currency fluctuation while GLCs enjoy maximum PAP’s protection back home?
Eg, hiking train/bus fares with the approval of the PAP-affiliated PTC despite lower service standards, government transferring train assets onto its balance sheet, etc.

Not all Temasek assets were directly financed by CPF; those which were include ComfortDelgro Corporation, DBS Group Holdings, Keppel Corporation, NOL, SATS Limited, Sembcorp Industries, Singapore Airlines, Singapore Exchange, Singtel, SMRT Corporation, etc. Most of these companies have been profitable every year because of their monopolistic nature eg Singapore Exchange, Singtel, SMRT, etc.

Nevertheless, all Temasek assets would have been indirectly financed by CPF through the sale of shares of GLCs/GLC profits.

How wealthy would CPF members be if these assets are returned?


Singtel’s current market capitalisation is about $62 billion. Since Temasek currently owns 52% of Singtel, this translates into $32 billion. Singtel’s IPO in 1993 raised about $4 billion, followed by a second tranche in 1996 raking in about $2.6 billion. Singtel also did 2 capital reduction exercises in 2004 and 2006 totaling $5.3 billion, of which more than half the amount went to Temasek.

Since 1994, Singtel’s total dividend payout amounted to about $31 billion of which Temasek received at least $20 billion.

Singapore’s 1 millionth phone was installed in 1990 and Singtel was also the most profitable statutory board to be listed. On listing, Singtel’s 15.25 billion shares were valued at about $60 billion.

It is immoral to finance a statutory board for decades with our CPF and simply transfer the most profitable statutory board to Temasek. In this case, we are talking about $60,000,000,000.

From the sale of Singtel shares, dividends and capital reduction, Temasek profited about $50 billion and is still sitting on $30 billion of Singtel shares. If Singtel and other GLCs were CPF investments, the issue of retirement shortfall would not have arisen.

Temasek’s stable of privatised GLCs

($ bil)
PROFIT ($ bil) MARKET CAP ($ bil)
DBS 29 $0.310 $3.672 $39.551
SINGTEL 52 $1.390 $3.652 $58.194
KEPPEL CORP 20 $0.187 $1.850 $19.760
PSA 100 $1.430 $1.430 $10.057
SEMBCORP 49 $0.152 $0.820 $9.810
ST ENGINEERING 50 $0.234 $0.581 $11.903
SIA 56 $0.303 $0.36 $12.313
SINGAPORE POWER 100 $0.920 $0.92 $9.219
SMRT 54 $0.018 $0.06 $1.552
CAPITALAND 39 $0.134 $0.85 $12.306
MAPLETREE 100 $0.859 $0.86 $8.273
SATS 43 $0.062 $0.18 $3.402
TOTAL      $5.999  $15.236       $196.340

** ‘Total’ figures for ‘dividend’, ‘profit’, and ‘market cap’.

Including other profitable GLCs and NOL’s losses, the yearly dividend payout from GLCs to Temasek should be close to the $9.1 billion interest paid by GIC to CPF members.

However, Temasek has also used the profits and proceeds from the sale of GLCs for other investments. If all Temasek investments with funds originating from GLCs are included, CPF members would be enjoying a retirement windfall, not shortfall.


Without our CPF financed GLCs, Temasek would not have been able to generate billions of dollars for overseas investments.

The ownership of most GLCs should be transferred to CPF members if the PAP is serious about resolving our retirement shortfall issue.

PAP has allowed ridiculously low CPF returns for decades. With the set up of the politically-affiliated CPF Advisory Panel, PAP has confirmed it will be paying lip service to CPF members. Does such a government possess any moral value?

After borrowing cheaply from our retirement funds to invest and causing the majority of retirees to suffer a shorfall, PAP has now lost the trust of most CPF members.

Every cent, including interest, that has been taken from our CPF must be returned. Privatised GLCs which were financed by our CPF should be included.

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