MOM Minister confuses, conceals failure of CPF scheme

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4 Responses to MOM Minister confuses, conceals failure of CPF scheme

  1. Confused says:

    It may well be below 20%. Without transparency, any guess would not be wrong.
    This shows that Roy was right all these while.

    As the FRS goes up year after year, it’s likely that the percentage will go even lower.

  2. Sinkie says:

    Her stats are actually for those born in 1961 and turned 55 in 2016.

    She purposely never mention about those Inactive i.e. unemployed — for sure majority can’t meet EVEN if pledge property.

    As for those still working, I can bet almost all the 53% can only meet FRS by pledging their property. This is becoz ALL my older relatives, and their friends, are in this situation. And they are your typical “middle class” earning $4K-$6K salaries.

    Pledging your property means that you can take more of your CPF money out. But the danger is that it makes it financially difficult to sell or even downsize your property in future. This is becoz if you sell your pledged property, you need to give CPF the pledged portion (which is 1/2 of FRS) PLUS THE ACCRUED INTEREST!!!

    This means that if you have financial difficulty & need to sell your property, a large chunk of the sales proceeds will be taken by CPF & put into CPF Life i.e. give you a few hundred $$ each month. You may not have much of the sales proceeds in cash to pay your debts or to even buy a small replacement flat.

  3. Anonymous incognit4444 says:

    Once again govt programs are a disaster. It wuld’ve better to have it private since the beginning but that was never the goal.

    • Sinkie says:

      Not necessarily …. For basic services that apply to all or most citizens, govt can do a better job due to economies of scale, avoidance of profit maximization, long-term approach. E.g. healthcare, education, law & order, national defense, retirement income / pensions, public housing, public transport especially when cars are extremely controlled, etc.

      But it depends on govt being sincere & competent to do the right thing to benefit the people. The problem with PAPies is that they tend to bastardise & corrupt many of the above national-level services to benefit the party instead of the people.

      Take the CPF as a good example. Do you know that our CPF and Malaysia’s EPF both started together by the British in the mid-1950s? Same policy, same contribution rates by employees & employers, even same interest rates initially.

      But PAPies hijacked the CPF system and turned it into a socio-econo-political tool to control & change the behavior of voters. Mass transfer of individual savings into state coffers via HDB which you don’t own. And also used it to prop up the property & banking industries, both of which mainly run by PAPies & their cronies. Not to mention as a cheap source of capital for PAPies to gamble on international “investments”.

      On the other hand, Malaysia maintained EPF as purely for retirement purpose. It adopted proven best practices of other long-term endowments & pensions. The contribution rates of employees & employers have not changed much since the 1960s, and so is not a burden and reducing the take-home pay. At the same time, they have managed to maintain a 6+% interest rate over the past 50+ years, allowing M’sian workers to grow their retirement savings meaningfully. And they can still withdraw in full when they hit 55.

      Let me paint you a reasonable scenario in Malaysia:-
      Say you are an average graduate and your average lifetime salary is RM3,000 per month.
      Assuming average 2 months bonus each year i.e. annual salary of RM42,000.
      Contribution to EPF at 15% of salary, hence RM6,300 per year.
      Average of 6% EPF returns yearly.
      If you work from 25 till 55 — you can withdraw RM498,000 at 55.
      If you work from 25 till 60 — you can withdraw RM702,000 at 60.

      Putting these amounts into an annuity will then give the average Malaysian graduate a lifetime middle to upper-middle class living in towns & smaller cities.

      And this is for people who are more relak & not ambitious, with lifetime average salary of RM3K. For those a bit more ambitious, working in KL or Georgetown Penang etc, the outcome will be even better.

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