The CPF scheme is a scam which continues to be covered up by the PAP-controlled Parliament. Once transparency sees daylight, the scam will unravel, as with all other scams.
CPF Board is controlled by PAP-appointed CEO RADM (NS) Ng Chee Peng who has zero experience in finance. Ng has 26 years’ experience in the Navy but exactly how this is relevant to his current role as CPF CEO remains a mystery.
CPF members voted for this joker to handle $328,895,300,000 of our retirement savings.
As a PAP-appointee, all Ng has to do is continue in his ‘Yes, sir’ role to please his political master. Although CPF has continued to be grossly inadequate to fund our retirement – despite contributing the highest percentage of wages in the world – this is apparently none of Ng’s business.
1 Low CPF interest rates make no sense
If the objective of CPF is to provide for a decent retirement, CPF rates have to at least increase in tandem with inflation rates. With the exception of 4 1/2 years from January 1995, CPF OA rates have remained at 2.5% since 24 years ago, another world record.
During this period, housing prices increased by more than 300% and the cost of necessary goods and services also shot through the roof, eg during the last decade, formula milk prices increased by 120%.
If the PAP had wanted to ensure retirement adequacy, CPF interest rates should have been lifted years ago. Why did PAP depress CPF rates, as it did for wages?
2 CPF Board in cahoots with HDB
Billions in CPF savings have been channeled into real estate by the CPF Board. With low CPF rates, PAP has been able to support high housing prices. This in turn paints a rosy picture of our GDP but such fake economic growth has proven to be detrimental to Singaporeans.
CPF Board has effectively borrowed from members at 2.5% and charges borrowers 2.6% to cover administration cost. With public housing at 85% in Singapore, PAP is thus able to become a developer and banker. In such a situation, the only winner is obvious.
3 CPF Board separates retirement savings into 3 accounts to support housing prices
Retirement savings are meant for …. retirement. But CPF Board has created 3 accounts, with the bulk of retirement savings going into the OA for housing.
If PAP had wanted Singaporeans to retire comfortably, a higher percentage of wages would have gone into the see-no-touch SA to earn higher rates.
4 More than $10 billion in CPF meant for retirement used to fund housing annually
Statistics from MAS have confirmed that the primary usage of OA is to fund housing. Without a constant CPF increase channeled into housing, the housing bubble would have burst.
5 Housing is consumption, not means of savings
Housing is a big consumption item, never a means for retirement savings. As has been confirmed by Minister Lawrence Wong, the value of a new HDB flat after 99 years is … $0.
HDB lessees have been had. 😦
6 CPF OA balances will keep increasing because ..
Although most Singaporeans will use our CPF OA for housing, there are many who do not need to do so, eg living with parents, housing inheritance, etc.
Assuming a monthly salary of $3000, a CPF member who does not use his OA would have accumulated about $9000 annually. Over a period of 25 years at 2.5% interest rate, this amount would have ballooned to $331,000.
Multiply this by the number of CPF members who do not use their CPF for housing, the amount is mind-boggling.
The PAP often engages in half truths such as telling CPF members about paying us lower rates because of the flexibility of CPF usage. In reality, CPF OA balances have been increasing, and will continue to increase, like nobody’s business.
After 25 years, our housing instalments would also have been fully paid. However, 2/3 of our CPF contributions will continue to earn the miserable 2.5% OA interest rate.
7 CPF OA is cheap source of funding for GIC to speculate in risky assets
During the last 5 years, GIC had access to additional $33 billion of CPF and this amount will continue to increase as PAP ramps up our population.
This amount is invested in risky assets such as foreign stocks or property which could produce higher returns. But GIC keeps almost half of these returns for the government to supplement the budget.
CPF Board is in cahoots with the PAP by helping to channel retirement funds into real estate. This has allowed PAP to act as a developer and banker. This is also the main cause of our severe retirement shortfall.
CPF Board under the control of PAP-appointed CEOs has been working against Singaporeans’ interests. It helps to provide a cheap source of funds for GIC to speculate in risky overseas investments.