Sent: Monday, February 20, 2017 7:30 PM
Cc: LEON ; <a title=”sylvia ; WP ; <a title=”kathijah.rahaman ; C K WONG ; <a title=”cue_liew ; GERALD GIAM ; <a title=”ken_dxb ; JAYA ; <a title=”cklau60 ; STANLEY
Subject: Where is our CPF? (7)
Dear Pritam Singh
As elected MPs, it’s really a shame that you guys don’t even know where all the $300 billion in our CPF is invested.
Not only that, you have stood idly by while PAP continues to introduce legislations to trap more of our CPF into GIC with absurd justifications. This is expected of PAP MPs who are there to ensure transparency doesn’t see daylight, but WP?
Nobody invests 100% retirement savings in foreign assets
This is too obvious for WP not to have known but for decades, nobody has questioned the government.
You wouldn’t subject 100% of your retirement savings to high forex/political risks and neither would I. But why has PAP been allowed to do so for 100% of our CPF savings when most citizens will retire in Singapore?
Which PAP elite has invested 100% of his/her retirement savings in foreign assets?
Something is clearly amiss here and with each passing year of silence, an additional $25 billion CPF will find its way into GIC.
For the past few years, GIC has been forced to invest in assets at inflated prices. Why not stop tweaking CPF legislations, return CPF members our savings and let us decide how to spend OUR own money? Is it necessary to continue taking high risk?
GIC invests during every part of the economic cycle and undeniably must have made outsized returns when investing at rock bottom prices. But didn’t GIC also lose many shirts investing during periods of irrational exuberance?
Without the ability to pick and choose its timing, unlike other fund managers, GIC’s tikam-tikam, dollar-cost averaging model can only produce mediocre returns
Another cause for concern is its inconsistency (see chart above). In 2001, CPF Board suddenly invested $29 billion in SSGS**. This amount is equivalent to the total increase in SSGS in the subsequent 5 years or in the preceding 7 years. Why?
Since CPF was not invested in preceding years, it could mean CPF:
– Was diverted to other government projects.
– Was used for other purposes, undisclosed in Parliament, during/after the Asian Financial Crisis.
– Interest rates could not be increased above 2.5% because it wasn’t invested for a prolonged period.
(There is too much material information concealed from the public which an elected president would have been able to access.)
A large portion of CPF should have been invested locally in GLCs because they had been set up using our CPF. According to Temasek, GLCs have achieved unbelievably high 40- and 30-year returns of 15% and 14% respectively.
But PAP did not allow CPF members to benefit from GLCs’ performance. The beneficiaries appear to be PAP elites parachuted into top management of GLCs and the government which has been using their returns to supplement the budget. CPF members have been left with 3.5% crumbs from GIC (average CPF rate).
I hope you will begin to ask questions on obvious issues in Parliament and not allow 100% of Singaporeans’ retirement savings to be invested in risky overseas assets.
CPF balances* – $29 billion estimated for 2016 after taking into account $23 billion increase during the first 9 months.