spend all your money quick, then there’s the MRT tracks u can use after that

no pt living a long life if u suffer everyday. stupid idea.

All the while the GIC / Temasek was earning 8 percent while giving us 2-4 percent on CPF. Where did the rest go to? The reserves? Who is benefitting from all these reserves? The MD / Directors / employees of GIC, Temasek Holdings. Not you, not me, – oh yeah except once every 5 years before elections.

It does not cost the government $700 million for the 1% CPF – it was our money in the first place!

I think you made an excellent point. What exactly is the CPF? It’s perhaps one of its kind it the world.

My humble take that it’s a retirement scheme which places the onus on the individual, and not the government. I don’t think it’s a savings account. The concept of interest in the CPF scheme seems more of an attempt to combat the effects of inflation rather than to allow citizens to enjoy hefty returns on their money.

This retirement scheme cannot be understood using existing frameworks, such as the pension framework because it was clearly designed not to be the case. The entire CPF scheme works on the assumption that retirement is not the government’s problem (which is a contentious assumption).

The problem with the CPF as I see it is that the add-on schemes, perhaps the most notable being using CPF to buy homes. Yes, while more people can afford to own homes as a result, the problem comes when people end up having alot less liquidity as a result during retirement. Perhaps this is why the government has to introduce the “buy-back” scheme because having a home is useless when you have no money to buy food or see a doctor.

Perhaps, the solution is really to go back to basics and make the CPF a scheme that’s only for retirement and retirement only. It might be painful to come up for housing with cash, but at least it forces people to spend money wisely. I should think that investment savvy people usually have lots of money anyway, so what’s in the CPF isn’t really a big deal.

Anyhow, I don’t really know how to resolve the issue. Many things have already happened and putting more ideas into the already messy broth might just blow up the whole pot.

They don’t seem to be able to come out with long-term solutions to be able to cater for the needs of different categories of people. They simply take the easy way out by having one temporary solution to tie them over and then when other side effects come then start to do something again. Always piece-meal and one size fits all type of solutions.

These kinds of solutions don’t need super talented scholars with triple scholarships and PhDs or multi-million dollar salaried ministers to come out with. Just get any of the Jurong Secondary School students, I think they would come out with better solutions.

The source of the predicament is frankly not due as Aaron to the longevity of the average CPF subscriber. It is a confluence of factor largely of the government’s, by extension PAP’s, own making. If the kind of “financial reserve” Singapore has is true, it could easily have funded the CPF adequately and still allow people to withdraw at 55. The point is the PAP won’t do it, and not can’t.

I won’t go into the details of the confluence but suffice to say, the predicament of CPF is largely due in part to its role, that the government has set it. The predicament could be change by simply clarifying the role but under this PAP or even alternative moderate parties, I can’t see that being change. It will take a revolution in Singapore for people to see the errors of the ways.

Let me enumerate the basic factors as I see it. It is by no means exhaustive but I think are pertinent:

(a) Is CPF a pension schema? No it is not because it was never intended as means of people pooling the money and then to be shared out when the times come. The PAP, now and for the foreseeable future, is definitely not likely to change to that CPF to a pure pension schema. It is too wedded to the philosophy of “individual” responsibility to even objectively contemplate the notion of a state pension as a possible solution. Hence this wayanging about annuity, which may be resolved if CPF was a pension scheme.

(b) Is CPF a mandantory saving scheme? On one level it seemed like it. You could say it is like a long term deposit scheme. If so, then why should a person not be able to collect its entire sum at maturity. Well the problem here is the you don’t have a choice because as ever, the PAP want to control everything. Instead of letting people save in private entities, such as the kind of schemes you find in the UK, they want to manage it themselves — i.e. CPF board. They then find that this meant that what they got is a one-size-fits all solution. Some people will be very good at investing by themselves and make good returns, others could be piss poor investor. So the CPF board now find it difficult to satisfy the diverse range of subscriber. For those that could potentially make better returns find their CPF as opportunity cost, so in effect view the cost as a tax. Since it is one-size-fit all solution, it must distribute evenly, so the poor gets of low return and in effect subsiding the people who can forgo their CPF and still live.

(c) Is CPF a kind of development bank? There is an adage that money has no value if it is not being used. So it seemed sensible to let people buy property and where should the money come from? Hmm why not let people use CPF. After all, the PAP, in the form of the government, can control the interest pay-back or not pay-back at all. The PAP can then be seen as effectively using cheap mean to fund the development of the country. Better still, by getting the subscriber or suckers to “volunteer” the money and if things goes wrong it is not the fault of the PAP. If the government had to borrow money from other source to build HDB flats, its subject to the whim of the market or lander be it IMF or private banks. Or worst still, having to tax the people to fund the HDB, which will give the impression of the PAP not fulfilling the policy of low direct taxation. Will the PAP stop treating the CPF as a development bank? Personally I think not.

(d) Is CPF a mechanism for redistributing wealth? The PAP would not like that to be the case but in effect it is being used to do. In the early days, when the employer contribution was higher at 25% it was as the case. Now that it realise that cannot be achieved, it has to scale this ambition down hence reduction in employers’ contribution. In any case, this Policy was likely to be unsustainable in the long run, especially for an economy that is do dependent on foreign investment. Expecting the PAP to explicitly make CPF a re-distributive mechanism would be asking for the sky frankly. If it wanted to, it could focus CPF to the poorer society by giving those higher payout and those who don’t quite need it forgo their payout. Is that going to happen under the PAP? Definitely not. Hence you see all these scary stories about CPF being squandered, even though it make be a very small number of cases.

There are more. But in essence if any makeover is needed, then the main starting point is defining what CPF is for?

They can feel it because their multi-million dollar ministers who are pensioners are guaranteed of cosy jobs purposely created for them and draw even higher salary than before, eg. MM and SM. When the needle does not prick them, they don’t even feel a thing!

Why is this critical factor not mentioned at all? The speech is agreeable only if the ’standard’ of living for matured and lower income Singapore is explained.

The minimum sum of CPF for the remaining prolonged lifespan is so critically dependent on the prevailing cost of living that it is not suffiicient for the average Tan & Lee and that they just have to work to their grave to survive and have a minimum meaning of life.

Isn’t what the globalisation is all about as explained by my gov? Why is it the costs of so many essentails are not controlled so that the workers can work at lower wage to compete for the jobs?

Daniel