20151020 Foolish Singaporeans relinquish control of their money (CPF) to PAP

Singaporeans have been fed so much propaganda that they seem to relish being controlled by PAP. Questions are seldom asked, as if important ones don’t matter.

In other democratic countries, national pension funds are managed transparently – not commingled with state reserves – and fund managers are held accountable. In Singapore, the PAP government simply expresses its need to control OUR retirement savings and it is able to tweak the rules at its whim and withhold our CPF till we die. Strangely, it has the support of 70% of Singaporeans.

It would have been fine if our CPF scheme is a runaway success but it is an abysmal failure. This can be confirmed by talking to any CPF member who retired in 1995 or 2005, 40 to 50 years after the CPF scheme started. Even those who will be retiring in 10 or 20 years time will have a funding problem.

From 1955 to 2010, some 55 years, the objective of the CPF scheme was to enable Singaporeans to have a secure retirement. But guess what happened when PAP failed? It simply changed the objective to include the self provision of a lifelong income, self-funded healthcare and home financing.

Why do CPF members, who have been screwed big time, still vote for the same treatment in future? How long will Singaporeans continue to play the role of a fool? If the money is ours, why did we not have any say when PAP introduced the CPF Life which is as good as a pay-until-you-die installment plan?

CPF started with a total contribution of 10%. Assuming a constant wage increase of 4%, a citizen starting work with a $1000 salary in 1990 would have saved up to $235,000 for his retirement after 35 years. (Assuming GIC managers are on par with Malaysia’s, EPF pays about 6% in the last 20 years) Wouldn’t it have been better to leave the scheme alone since members are now worse off after all the countless tweaks?

Year Salary CPF % total CPF (13 mths) 4% 5% 6%
1990 $1,000 10% $1,300 $179K $209K $235K
2000 $1,500 10% $1,950 $269k $315K $407K

If PAP was concerned about retirees’ finances, it could have increased the total contribution rate to, say, 15%. There would have been no CPF protests at Hong Lim Park.

Year Salary CPF % total CPF (13 mths) 4% 5% 6%
1990 $1,000 15% $1,950 $269 $315 $407
2000 $1,500 15% $2,925 $400K $470 $540K

Since 1990, housing prices have increased by at least 300%. Is it not silly for CPF members to accept CPF interest rates of between 2.5% and 4% with unlimited tweaking?

It is even more absurd to accept long term CPF rates being pegged to short term bank interest rates. Ordinary citizens are powerless against such a convenient arrangement to benefit PAP but are our lawmakers stupid or what? Long-term rates = short-term rates??

Using PAP’s arbitrary formula to compute CPF OA interest rate, members deserve to be paid a peanuts 0.21%. There would have been public outrage if this had happened in any country except North Korea.

Singaporeans have been fooled by PAP’s ‘self-reliant’ policy which is in fact rubbish. Where is the government’s role in taking care of elderly Singaporeans after we have been paying taxes – daily – for 4 decades? Is it not irresponsible to expect Singaporeans to simultaneously save to fund our healthcare and housing needs when we retire?

The CPF scheme is not complicated but Singaporeans appear unable to understand that the savings belong to members and statistics have confirmed it is a failure. Singaporeans don’t seem to be aware that we have the right to demand transparency and accountability and revamp the failed CPF scheme. The sad part is 70% of Singaporeans have foolishly relinquished control of our hard-earned savings to PAP.

PS
Citizens of other countries would never have agreed to their retirement savings being invested in an opaque manner, returns pegged to short term interest rates, guaranteed low long-term returns, frequent tweaks to mask the scheme’s failure and funds being withheld until one kicks the bucket. It is really foolish to accept such a deal.

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5 Responses to 20151020 Foolish Singaporeans relinquish control of their money (CPF) to PAP

  1. Xmen says:

    You are right about the CPF scheme. (The only consolation for privileged/fortunate individuals is that they can withdraw it when they emigrate!)

    Another big elephant in the room is the national reserves. I wonder why the national reserves are not vigorously debated at all in the parliament or any public forum. At the very least, people should question the size of reserve for a nation of this size. At the moment, this number seems to be unlimited and therefore excessive. If more people are aware of the excess, we will be able to use the excess money to invest in the society TODAY.

    • tksterry says:

      “I wonder why the national reserves are not vigorously debated in the parliament ”
      Of course ours is a fake law making body. Understand that shadow ministers in UK are funded by the govt. So they have resources to do the necessary research and query propose legislation. PaP MPs go there to snooze. They and WP lack courage/knowledge to ask probing questions .

  2. andrewtungsk says:

    “The CPF scheme is not complicated but Singaporeans appear unable to understand that the savings belong to members and statistics have confirmed it is a failure. Singaporeans don’t seem to be aware that we have the right to demand transparency and accountability and revamp the failed CPF scheme. The sad part is 70% of Singaporeans have foolishly relinquished control of our hard-earned savings to PAP” You still have 30% waiting and watching.

  3. tksterry says:

    Roy and company has achieved something. At least 20% of CPF will be released to retirees upon reaching 62 / 65 years.

    • Phillip Ang says:

      PM Lee said “during retirement, after 65”. PAP will be helping retirees by increasing the retirement age. Many levers available to retain CPF in GIC in future. 😦

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