20161018 CPF members should not continue to live in denial, PAP has full control over our CPF

CPF is not your money, or is it your money?” is an important question which most CPF members are afraid to ask. Because the truth hurts and so it’s better to just ignore the elephant in the room.

Last year, wheelchair-bound NMP Chia Yong Yong, who was more qualified to speak up on issues affecting disabled citizens, broached the subject and gave Singaporeans a lecture on our moral obligations when spending our CPF. She was lambasted and described as “clueless” and “a stupid NMP”.

But Chia is actually right about her uncertainty of CPF ownership although her arguments were silly at best. And she’s a lawyer. Truth be said, our CPF does not belong to members because it has already been “ring fenced” through legislation for GIC to ‘invest’ in foreign assets.

If PAP could forfeit our CPF, it would. And members should not be surprised if CPF interest rate is reduced in the near future.

When there was insufficient funds for CPF members to withdraw at 55 – especially baby boomers – CPF withdrawal age was raised to 62 and subsequently 65. As if that wasn’t bad enough, members will be paid in installments till our last breath. So, is CPF our own money when the PAP decides on when our CPF should be returned to us?

CPF members also do not have any option on the management of our retirement funds: $300 billion goes into GIC and a low rate of return is fixed by PAP. Is our CPF ours when PAP makes every important decisions with regard to our retirement savings?

The truth hurts.

CPF Board arbitrarily came up with the Minimum Sum Scheme (recently changed to Retirement Sum) where, members are currently required to set aside $161,000 at 55.

Image source: TOC

But when members have accumulated $161,000 in our CPF in our brick and mortar HDB flats, $161,000 suddenly loses 50% in value and is considered only $80,500. $80,500 suddenly vanished into thin air, no pakai. CPF members are then forced to set aside an additional $80,500 in the Retirement Account for GIC to speculate until we die.

Under PAP, CPF monetary values are flexible, not absolute figures. $161,000 = $161,000 or when PAP needs our money, $161,000 = $80,500. Got logic or not?

More pain ahead.

CPF savings is like a super long-term bank FD but earning a subpar interest rate. If I withdraw my Maybank FD prematurely for my children’s education, I forgo the interest earned at most and there’s no need to pay back any interest on the principal amount. But when it comes to CPF withdrawal under the Education Scheme, members are considered to be taking a loan from themselves and are required to pay themselves interest!

Own self can lend money to own self meh?

Strangely, this rule on paying back principal plus accrued interest does not apply when it comes to investing with our CPF. Why the double standard?

Losing one’s retirement funds in a lousy investment is fine but CPF members must pay back principal plus accrued interest for using our CPF to fund our children’s education?

On the surface, our CPF is invested in government bonds paying a fixed interest rate but the reality is $300 billion end up being invested in risky and speculative foreign assets. No CPF member would have invested 100% of our retirement savings in such a reckless manner (exchange rate and political risks). Is our CPF our money when we cannot prevent our savings from being recklessly invested?

And of course there’s no such a thing as the government (represents Singaporeans) guaranteeing Singaporean CPF members. This is common sense.

Although NMP Chia’s arguments were silly, CPF members would be sillier if we continue to live in denial and await another Roy/Hong Lim Park protest to reclaim back what is ours.

CPF members also can’t depend on our elected co-driver WP who has been repeatedly slapped by the driver. And now, CPF members by a silly NMP.

If our CPF is our money, why is it at PAP’s disposal? CPF members should not continue to pretend CPF is our money because the reality is we have ZERO control over it.

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