20150313 PAP has failed to convince Singaporeans CPF is not a Ponzi scheme

Singapore’s national pension system resembles the mother of all Ponzi schemes which is about to implode.

The PAP is aware of the widespread perception that CPF resembles a Ponzi scheme but has not been able convince Singaporeans otherwise. Instead, it has continued to conceal important information from the public.

In May 2014, MOM Minister Tan Chuan Jin even took to blogging “The truth about our CPF and the Minimum Sum”. What is ‘truth’ when ‘facts’ are only known to the PAP? Tan’s truth is in fact half truth.

The 3 main points, all half truths, made by Minister Tan mentioned in his post:

1 “CPF helps us retire” – There are 3 accounts ie Ordinary (OA) 23%, Special (SA) 6% and Medisave (MA) 8% (below age 35). With exorbitant housing prices, almost all the OA will be depleted during the housing loan tenor, leaving almost nothing to be invested. The 6% contribution into the SA is effectively our retirement savings. How does this help us retire? Even then, the SA was allowed to be used for housing in 1999.

2 “CPF is your money. You are already using it! Everyone has received their CPF monies plus top-ups and interest” – ‘A’ borrows money from a bank and uses it to buy a property. Does using the money mean it belongs to ‘A’? Maybe every borrower should go to the bank immediately and insist on not repaying the loan because the MOM minister has said using the money makes it ours. What’s the use of having received our CPF in a see-no-touch account? If the money is ours, why is it managed by GIC against our interest and until we drop dead?

3 “The Minimum Sum is increasing because we are living longer so we need to spread out our payouts” – The Minimum Sum (MS) did not exist before 1987 and our money was returned in a lump sum at 55. Granted we may be living longer, why then isn’t our CPF returned in a lump sum at 65?

And no, we (CPF members) do not need to spread out our payouts because we have never agreed to the MS in the first place. It is the PAP which wants to retain our CPF and forces CPF members to accept its pay-you-until-you-die installment plan.

Tan, a newbie minister, would do well to understand today’s PAP government can no longer ride roughshod over the people. Although PAP controls the mainstream media, it no longer determines the needs of citizens. CPF members will decide for ourselves, not the PAP.

All PAP efforts are aimed at increasing CPF balances and retaining as much as possible. The striking similarities between a Ponzi scheme and our CPF should not be ignored any longer by CPF members.

Look no further than CPF balances which increased from $9.1 million in 1955 to $275 billion last year. It would have been fine if the increase was gradual but it wasn’t – it took 52 years to hit $136 billion in 2007 but doubled within a mere 7 years. CPF members should not continue to feign ignorance and demand real answers from the PAP government. This is OUR money.

The PAP double-inflated the Minimum Sum against CPF members’ interest which really did not make any sense. PAP is aware this has caused immense suffering but why is it willing to lose political mileage? Unless GIC’s books are opened, the logical conclusion is most of our CPF have been lost.

Minister Lim Swee Say had already confirmed this when he contradicted himself by saying CPF is “100 per cent safe” but “MANY INVESTMENTS HAD BEEN LOST DURING THE GLOBAL FINANCIAL CRISIS”. When investments are lost during a financial crisis, their losses are usually very large because investors, not small time punters but fund managers, are all trying to exit amidst plunging prices.

An example would be GIC’s biggest investment, UBS, which has been sitting on massive unrealised losses after 7 years.

GIC invested a total of US$18 billion in UBS (Dec 2007) and Citigroup (Jan 2008). Taking into account all dividend payments, Citi’s realised and unrealised profits, exchange rate gains and coupon payment of UBS, the US$18 billion investment has yielded close to nothing? for 7 years. What about all other failed investments mentioned by Minister Lim which have not been disclosed?

To put this into perspective, GIC was managing only S$128 billion (US$92 billion) of our CPF in 2007. When a big chunk of its funds is underperforming, it needs fresh funds to generate a higher return.

By looking at the amount of OUR CPF channeled into GIC post financial crisis, the picture becomes clearer.

CPF channeled into GIC from 2002 to 2013 (table below)

2002 94B
2003 101B 7B
2004 108B 7B
2005 115B 7B
2006 119B 4B
2007 129B 10B
2008 141B 13B
2009 157B 26B
2010 176B 19B
2011 197B 21B
2012 219B 22B
2013 241B 22B

Source: MAS report pg 111

Prior to 2007, the amount of CPF loaned to GIC via the purchase of SSGS did not exceed $10 billion annually. In 2008, it increased by 30% to $13 billion. The increased amount doubled to $26 billion in 2009. Since 2009, the annual increase averaged $22 billion. Are we to believe this was merely a coincident after billion$ of investments had been lost? Does this not even vaguely resemble a Ponzi scheme?

Wonder why PAP loves foreigners more than locals? It’s because PAP needed their numbers to increase CPF contributions further.

Foreigners do not contribute to CPF after 2003. They became a source of fresh funds when PAP converted some 202,000 foreigners to PRs between 2007 and 2009.

The PGP was not bulldozed through parliament for no rhyme or reason. The CPF Ponzi scheme will collapse without an increase in immigration!

For over a decade, GIC has consistently stated it manages “over US$100 billion” despite receiving more than US$100 billion since 2008. Perhaps it is true that the amount is only slightly over US$100 billion because most of it has been lost through bad investments? GIC should clarify instead of hiding behind its private limited status.

PAP’s actions have consistently indicated a solvency issue.

Despite CPF members having already highlighted the NEED for our CPF at 55, PAP-affiliated advisory panel still proposed only a partial lump sum return at 65. In between, lots can happen to a member such as 18% of retirees would have died. That PAP is not even able to return a partial lump sum to CPF members at 55 says this very clearly – PAP does not have sufficient funds for CPF withdrawal.

The CPF issue is PAP’s Achilles heel and it will attempt to hold on to power to prevent disclosure of embarrassing facts. A lawsuit filed against an ordinary citizen has created fear among other concerned voices from speaking up. If PAP wasn’t desperate, it would not have completely shut down the CPF protest at Hong Lim Park. PAP wants to prevent the CPF Ponzi scheme from being exposed.

DPM Tharman, a GIC director, also insisted that CPF monies are safe because the PAP government guarantees them. Tharman assumes citizens are not aware tax dollars will be used to guarantee.

CPF members = taxpayers = CPF members guaranteeing ourselves = CPF monies safe???

Ministers have been spouting nonsense and it’s about time they stop insulting themselves. Lee Kuan Yew’s daft citizens no longer exist.

CPF members are extremely concerned because economic ‘growth’ post financial crisis has been based solely on ultra-easy monetary policies by central banks. Even GIC has acknowledged “the prices of all major asset classes have been inflated by the massive stimulus measures and now face weak future returns”.

If PAP had not drastically increased the MS (OA plus MA) to almost $200,000, channeled billion$ via government help schemes, increased the number of PRs, etc GIC would not have been forced to invest an increasing amount of CPF monies. GIC has recently been forced to invest tens of billion$ in inflated assets which face weak future returns. It would be fine if GIC was committing hara kiri with personal funds but these are OUR CPF.

The PAP and everybody else would have been better off if GIC had less funds to manage.

In August last year, PM Lee informed Singaporeans that the CPF rate would be increased from $155,000 to $161,000. This is a 3.8% increase but without inflation statistics, it appears MS increases have been at PAP’s whim all along. This begs the question – why does GIC need so much funds?

PAP could regain citizens’ trust by opening GIC’s books. It is not doing CPF members any favour because it is our right to know where our money is invested.


Although GIC has warned of “weak future returns” due to inflated asset prices, PAP continues to channel billion$ into GIC.

PAP is playing a dangerous game with our CPF as investment losses will be self-guaranteed.

Total CPF balances increased by a staggering $139 billion within 7 years against CPF members’ interest. It is not illogical to suspect a solvency issue.

Fund redemptions (CPF withdrawal) spell the death knell for Ponzi schemes. PAP has prevented this by delaying CPF withdrawal from 55 years old until most CPF members will have a CPF balance when we are dead. The staggering amount of CPF makes our national pension scheme resemble the mother of all Ponzi schemes.


It is unlike other Ponzi schemes in the sense there is no personal gain. What has likely happened is the cover up of investment losses which subsequently led to even more losses. Unless the PAP embraces transparency, it will not be able to convince the masses that there is no solvency issue.

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6 Responses to 20150313 PAP has failed to convince Singaporeans CPF is not a Ponzi scheme

  1. N says:

    Right on the nail. Fresh funds needed on hopes strike TOTO.

    Problem with opening the books is that it’s lose-lose really.

  2. xyz says:

    Phillip, the so-called “double inflation” for CPF from 2003 to 2015 is actually fully intended by PAP govt back in 2003, and fully announced in the news, TV and debated in parliament also. Just that nobody now understand or remember. Even the current 20+ Directors in CPF also cannot remember liao. That’s why their replies in Straits Times Forum page often contradictory and makes no sense.

    Way back in 2003, PAP economists calculated that for retirees who retired in 2003, they already must have $120,000 in order for a BASIC RETIREMENT. But in 2003, the Minimum Sum only $80K. And this $80K people already KPKB and most cannot even meet. Don’t talk about $120,000.

    So PAP tell Sinkies: Ok, we will SLOWLY increase the MS from $80K to $120K over next 10 years. But must take inflation into account also. That means $4,000 nominal increase each year PLUS adjustment for inflation for BOTH the $4K increase AND the prevailing MS. At this point 99.99% of Sinkies and even MPs brains shut down liao coz cannot understand. And the PAP academics and economists cannot explain in simple terms, so fuck the dumb Sinkies lah.

    Therefore this $161,000 by July 2015 is actually $120,000 of 2003 dollars, adjusted for inflation over the last 12 years. BTW the inflation they use is the median yearly CPI.

    • phillip ang says:

      It is PAP’s intention to complicate every scheme to sow confusion. You’re right – even $80k already many cannot meet. Wages back then was much lower and most CPF went into housing. PAP knows the ridiculous MS doesn’t make sense but its motive is to retain as much money from those CPF members who met the MS.
      Somehow they have been using the inflation rate from Mars and LHL even came up with his own rate last year.

    • Xmen says:

      Remind me if PAP discussed back in 2003 where the $4k per year would come from over the following 12 years… So if so many people still don’t have $161,000 for a BASIC RETIREMENT, who should take responsibility in the WEALTHIEST city state in the world?

      • xyz says:

        Your comment shows that you don’t quite understand. This fully illustrates my point how 3 million Sinkies are easily manipulated & fooled.
        So let me just give you the simple answer: VTO — if majority of Sinkies keep on voting PAP despite the screw ups and screwing they get, then the fault is with Sinkies and Sinkies fully deserve what they get.

  3. PAPer Tiger says:

    PM Lee and Family

    Some of us know that they are supposed to feel sad at the passing of MM Lee.

    In any event, now that MM Lee is dead, can you return our parents’ CPF monies to them, that your father has coerced them to “contribute” over the years when your father was alive?

    We know it’s a fact that a significant portion of our CPF monies have been lost in wasted investment through you and Ho Ching via Temasek Holdings. But we will be thankful if you still can return whatever is left back to us.

    We promise not to apply for summary judgement against your family in the abovementioned extortion, as well as other atrocities your family has enacted upon your fellow Singaporeans, including acts through Internal Security Department. It is now common knowledge that you jailed a lady from our pioneer generation, before she has an opportunity to step into her election-won Havelock zone then, without trial for 6 years. Is that how you intend to celebrate SG50 too?

    We’ll leave your family’s reputation and judgement to the international civilized community, who is not under any vested interest to or threat under your shriveling political reach, which has now decomposed further with Mm Lee’s death.

    Return CPF to our pioneer generations in this year of SG50. Save all your rhetorical Machiavellian policies propagated through your state-controlled media, to spare further local and international squirming embarassment to Singaporeans, if not for yourself, please.

    Afterall, it is the living who needs and can spend money, not the dead.

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