20150726 CPF members should not allow PAP to take us for another ride

Dear CPF members

Regardless of your political affiliation, you’d better wake up to the fact that your CPF will not be returned anytime soon. Not that PAP won’t, it can’t.

2 Because PAP is in such desperate need for funds, it did not only postpone the withdrawal age at 55 but removed it altogether. During the past five years, $35 billion ($7 billion annually) belonging to members in the 55 to 60 age group was trapped by PAP(see table). If $35 billion had been returned, GIC would have been in trouble.

According to CPF Annex H 2014, members in the 50 to 55 age group has the highest balance of $46.6 billion. In the next 5 years, another $35 billion will again be channeled into GIC.


PAP does not have the means to return tens of billion$ to CPF members at 55.

3 From 2010 to 2014, CPF balances grew at an average of $22 billion annually. About $7 billion came from retirees whose retirement savings were trapped by PAP after 55.

PAP has been increasing total CPF balances via our immigration policy and arbitrary changes to the CPF withdrawal age. It is foolish to believe there is sufficient funds to pay CPF members at 55 when one does not even know where OUR CPF is invested.

Much bigger countries are not able to increase their reserves at our mind-boggling rate. CPF currently resembles the last stages of a Ponzi scheme and is a complete failure.

4 To mask the failure of our CPF scheme, PAP conveniently/sneakily amended the ‘mission’ of CPF.

Mission before 2011

Mission after 2011

CPF has failed to provide “a secure retirement” for the majority of retirees and this could be confirmed by members who had retired a decade ago or earlier.

Isn’t it mission impossible for CPF Board to attempt to provide a “lifelong income (CPF Life), healthcare financing (Medishield Life) and home financing” when it has failed to accomplish its single mission , ie to provide a “secure retirement”?

5 Last year, I highlighted the edited CPF mission in this post and provided links to CPF website. However, PAP recently revamped CPF website , effectively leaving no trace of CPF’s mission prior to 2011.

CPF annual reports since 2002 are no longer available and it appears PAP wants to prevent further public scrutiny. Fortunately, I had downloaded all available CPF annual reports and would advise concerned citizens to do likewise when they engage an untrustworthy PAP government.

PAP is not interested in engagement but prefers to conceal information and engage in propaganda.

6 I am no finance expert but I know for certain that our scholars know nuts about risks and GIC is speculating with OUR retirement savings. It is able to do so because a PAP-controlled parliament can always amend CPF withdrawal age to inject more funds into GIC to cover up investment losses. It already has.

Unlike our scholars who understand risks in a classroom setting, I was a professional futures trader for 15 years. I traded for an American company for 5 years and was a SGX ‘local’ (trading with own funds) for 10 years. Futures trading is riskier than investing in the stock market.

After I left the exchange in 2006, I invested in Singapore stocks and went through the global financial crisis hell. And back.

I know full well the meaning of risk and what GIC does with OUR CPF is extremely risky. GIC is unable to prove otherwise.

7 Last year, Josephine Teo, Senior Minister of State for Finance, continued to mislead CPF members by claiming that “CPF funds are invested in risk-free Singapore Government securities”. The Singapore Government is not a separate entity but funded by CPF members. Josephine is basically telling you that you will guarantee yourself! You, as a CPF member, should go question the learned minister on her half-past-six statement.

Although PAP cannot guarantee citizens, it has been guaranteeing about 775,000 foreigners who should not be enjoying privileges of CPF membership. Many have left Singapore for good since years/decades ago.

8 Most CPF members would expect a high percentage of our CPF monies to be invested in solid companies which provide stable/increasing dividend payments. When such companies perform well consistently, the value of its shares also appreciate. GIC’s listed securities portfolio has confirmed otherwise.

Since GIC’s listed securities portfolio is not able to generate sufficient returns to match CPF interest rate, perhaps it could have better luck with its investments in real estate/private equity. But no one knows for certain because GIC has refused to be transparent.

Why should anyone even trust GIC when it gambled $26 billion on Citigroup and UBS? What’s more, LKY had expected such lousy investments to be cold storaged for 30 years, as if he could predict the future of UBS and Citigroup.

If GIC could make bad investment decisions involving a humongous $26 billion, other smaller investments cannot escape its bad judgement.

9 A Singaporean retiree will need his funds in Singapore dollar. However, GIC has done the unthinkable by investing 100% of our CPF in foreign assets, ie non Singapore dollar.
We seriously need to question PAP’s no-common-sense approach and motives.

It is acceptable to invest a smaller percentage in foreign assets but certainly not 100%. Foreign exchange volatility may prevent divestment when funds are needed, ie withdrawal at 55. Again, it appears PAP does not intend to return OUR CPF.

10 In 8 out of 20 years before 2014, there was a drawdown on our reserves by GIC to pay CPF members. This again confirms GIC’s portfolio is unsuitable for CPF members because it did not plan to have a constant stream of income. GIC has been speculating with our CPF and reserves.

11 PAP can regain our trust by:

– Not commingling CPF funds with real reserves.
– Disclosing all CPF investments.
– Disclosing the billions it has paid to fund managers and directors.

But will it?

In short:

PAP never had any intention to return our CPF because it can’t. Instead, it needs to channel even more money into GIC which it has been doing so at the rate of $22 billion annually. $7 billion is contributed by removing the withdrawal age of CPF retirees.

Most CPF members suspect GIC needs to speculate in order to achieve higher returns. This is to cover past losses.

CPF has failed to provide members with a “secure retirement”. To mask its failure, PAP sneakily amended CPF’s original mission and has removed evidence of its failure.

As long as PAP has two thirds parliamentary majority, it will continue with its series of tweaks to trap even more CPF monies. It has been doing so since 1987 when it implemented the Minimum Sum Scheme.

We have been taken for a very costly ride for almost 30 years. For the sake of your children, think carefully about this issue and don’t be fooled again.

Phillip Ang

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2 Responses to 20150726 CPF members should not allow PAP to take us for another ride

  1. Ng T K says:

    I like the way you name you articles, in addition to your sharp insight into current affairs.

    Thank you very much.

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