Fortunately for the PAP government, most CPF members have continued to absorb propaganda like sponge. It’s a pity that all the efforts by Roy and others to enlighten members have almost gone to waste.
One only needs to look at CPF statistics and think a little to understand that the CPF scheme is in fact a legalized scam.
CPF Ordinary Account
The primary objective of the CPF OA is to channel 23% of monthly wages – meant for retirement – into housing. This is of course pure folly as any idiot knows the result is a housing bubble.
PAP is aware that:
– The 23% in CPF OA will be depleted only in the initial 20 to 25 years of servicing a mortgage.
– OA balances will increase steadily after one reaches 40 years old.
– Many who have inherited properties do not dip into their OA.
– Others with partial inheritance have a substantial OA balance for decades.
As such, total CPF OA balances will continue to increase.
Although PAP is aware that there will always be a huge net balance in the OA, the PAP-controlled CPF Board has refused to pay a reasonable long-term interest rate. This has partly contributed to the huge retirement funding shortfall.
If Malaysia’s EPF could pay an average of 6% for 20 years, why does the PAP need to guarantee CPF members super low rates of 2.5%? Why does the PAP need to commingle CPF with state reserves when this is not practiced by any other government?
Paying CPF members lower rates appears to serve GIC because part of its returns are used to supplement the budget. Should GIC pay CPF members interest rates similar to EPF’s, its ability to supplement the government budget is questionable.
GIC claims it has been making a 6% long-term return but CPF members have been paid only 2.5% for 2 decades. The amount confiscated from CPF members is therefore not peanuts. Using the current CPF OA balances of $118 billion in 2016, GIC stands to gain $4.13 billion from CPF members this year.
Through the PAP-controlled Parliament, CPF has been converted to state reserves, ie PAP forcibly took our CPF for GIC to speculate. 😦 😦
Over the years, the government has benefitted tens of billions from such a convenient arrangement.
MOF: “The investment of our reserves provides a valuable stream of income for the Government Budget, ..”
Why should CPF members help to supplement the government budget?
Since CPF members are contributing to the budget, is this not a form of taxation?
Since our economy has performed spectacularly, as evidenced by GDP growth, why does the government need to confiscate returns due to CPF members?
Is this ethical?
There is also a question of GIC’s expense ratio which has not been disclosed. Assuming GIC charges a 2% management fee, this would mean it will earn $2.3 billion from managing OA balances alone.
GIC is managed by PAP elites and it appears to have created multi-million dollar positions for them at GIC.
GIC has also been seeding funds set up by its former employees. If these fund managers are worth their weight in salt, money would have come knocking on their doors after leaving GIC. Instead, GIC was reported to have thrown billions of our CPF and reserves at them.
For example, Aje Saigal, who had been working at GIC for 30 years was seeking to raise $1 billion when he started Nuvest Capital. He had aimed to achieve the $1 billion target in 12 months. If Aje had any reputation to begin with, funds would have seek him out. Has Nuvest managed to raise $1 billion? It has not disclosed this on its website, similar to GIC which is afraid to disclose its AUM.
GIC also seeded another fund set up by former CIO Ng Kok Song. Bonus for Ng was another US$3 billion of our reserves came from Temasek. The elephant in the room: why do these veteran fun managers still rely on our CPF and reserves for their survival?
Together with a performance bonus, the expense ratio of GIC could easily amount to billions annually. Why do elected MPs continue to act dumb, pretending billions of our CPF and reserves are peanuts. 😦
It appears the CPF scheme serves only GIC, not CPF members.