Friday, 1 August 2014

Myths And Misconceptions About CPF

5 CPF myths busted
Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam and Manpower Minister Tan Chuan-Jin tackled some common myths and misconceptions about the Central Provident Fund system during Tuesday's Parliament session. -- ST PHOTO: KUA CHEE SIONG

MYTH NO. 1 - Your Minimum Sum keeps going up. Once the Minimum Sum is set for a particular cohort, it does not change. Rather, it has been going up for each new cohort.

For example, someone who turns 55 between July 2014 and June 2015 will need to set aside $155,000. This is more than for the previous cohort, which had to set aside $148,000, but this older cohort's own Minimum Sum has not gone up.

Similarly, for someone who turned 55 five years ago, the Minimum Sum was $117,000 and has not changed. The Minimum Sum has been rising from cohort to cohort over the last decade in order to catch up with what a lower-middle income household would need in their retirement years, taking inflation into account.


Myths Busted

Real generals like Patton are famed for their tank busting exploits. Lesser warriors like Tan Chuan Jin have to settle for myth busting. Not that he is doing too well on the battle front of the Central Provident Fund (CPF) wars.

One of the "myths" he set his sights on: the minimum sum is a shifting goal post. In his warped mentality, the number changes only with the cohort affected, therefore no change is involved. The kind of perverse logic that broke the original promise of releasing the retirement funds at age 55. Nothing has changed, so he says, only the rules have changed. Poor Dr Toh Chin Chye must be rolling in his grave.

There is one myth that is really propagated: the CPF is our retirement package. Firstly, it cannot be ours by any definition in the English language since we are hapless to the twisting of the access rules without our consent. Then, there are the millions siphoned to the secretive "reserves" portion of the public housing pricing, which has resulted in the anomaly of the Singapore asset-rich cash-poor social phenomenal. Don't even get started on the returns from the CPF - the only guys guaranteed a cushy retirement at the Bahamas are the fund managers. The sickness has now spread to the Medishield Life sham. Opposition members have asked on our behalf why Medishield needs such a large reserves account, a similar question once levied at the National Kidney Foundation board. As in the case of the NKF fiction, there was no credible answer.

related: Malleable Rules


Is Our CPF System Really That Bad? Clarifying The Misconceptions

What started off simply as a one-time article has become an area of interest for our editorial team. We realize that many Singaporeans are interested in the topic of CPF system, and naturally so. Whether you agree or disagree about the CPF system, it is here to stay. It will be part of your life and we want Singaporeans to make the most out of CPF for themselves, rather than to constantly think of it as some scam to suck your money away.

We read through the comments that many of our readers posted and did pick up some which were value adding. For example, why is it that so many people cannot meet the Minimum Sum commitment at the age of 55, despite what our numbers have shown? We think these are legitimate concerns, and we fully intend to address these in the next few months as we continue writing about the various dynamics of the CPF system. And how you can make it work for yourself and your family.

Lastly, do feel free to leave us your thoughts, comments or questions about the article or your views on CPF. With a topic as large as CPF, it is difficult for us to be all encompassing in any one article.


Manulife: 4 in 5 feel CPF funds won't be enough for retirement
Those who contribute to CPF can only touch their CPF savings at age 55, and this is after setting aside a minimum sum in their CPF retirement account. The sum is S$155,000 now - PHOTO: SPH

Four in five Singaporeans are worried funds in their Central Provident Fund (CPF) retirement account will not be enough to meet their retirement needs, a fresh survey by Manulife showed.

About 60 per cent of those polled also said there should be more flexibility in fund withdrawal.

The grave anxiety over inadequate coverage in the twilight years comes because CPF contributors feel the savings will not be sufficient to cover retirement expenses, and that the returns are insufficient.

read more

Full Coverage:

Some groups yet to benefit from CPF Life

THERE are at least three groups of citizens who have yet to benefit much from the implementation of the Central Provident Fund (CPF) Life scheme. First, there are the self-employed who do not contribute to their CPF accounts regularly due to unstable income.

The second group would be those who have dropped out of the workforce due to health issues or who stop work temporarily due to family commitments.

The third group would be those who are less fortunate, or are mentally or physically challenged.


CPF Life, MediShield Life help provide 'peace of mind' in old age: DPM Teo
File photo: An elderly man in Singapore. (photo: Francine Lim, channelnewsasia.com)

Central Provident Fund (CPF) Life and MediShield Life are two important components of the Government's efforts to help Singaporeans enjoy a peace of mind in their golden years, said Deputy Prime Minister Teo Chee Hean.

Mr Teo was speaking at the Pasir Ris-Punggol National Day Dinner on Saturday (August 2). He said the CPF system gives fair and safe returns where most members receive 3.5 per cent in their Ordinary Accounts and 5 per cent in Special, Medisave and Retirement Accounts, and "these are guaranteed even when markets do poorly."

He also said MediShield Life gives better protection against large medical bills and this includes higher daily claims and higher payouts for treatments like chemotherapy. To take good care of pioneers, they will receive permanent MediShield Life premium subsidies, and also Medisave top-ups of S$200 to S$800 each year.

related:

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What CPF reform should achieve

Earlier this week saw a lively discussion on reforming the Central Provident Fund or CPF at a forum organised by the Institute of Policy Studies. Several ideas have been thrown out for consideration and we can expect to hear more about the Government’s thinking during the upcoming National Day Rally.


One proposal is the option of taking higher risk in investing CPF monies in return for the prospect of higher returns. Ideally, this should be limited to CPF members who already have high confidence of meeting their retirement needs through meeting a certain minimum sum. This would ensure that they have the base of security before taking greater risks.

What is important is that CPF members who qualify and elect to take higher risks should be expected to indemnify the Government from protecting them against any losses or from making good their retirement adequacy if their total financial circumstances are significantly altered by future events, such as another global financial crisis. This is to ensure that well-to-do CPF members do not benefit from a privatised upside gains but also socialised downside protection.

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CPF system will evolve to meet changing needs: DPM Tharman

The Government is considering studying ways to provide better options for Central Provident Fund (CPF) members who are able to take higher risks to earn higher income from investing their CPF monies.

Speaking at a forum on CPF and Retirement Adequacy organised by the Institute of Policy Studies on Tuesday (July 22), Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said options like private pension plans have to be studied carefully and it is important that people understand the risks involved.

Mr Tharman said the CPF system has served Singaporeans well, and it will keep evolving to meet their changing needs. However, even as improvements are being made, it is important to keep the basic strengths of the CPF system, he added. These strengths include giving a fair return to ordinary CPF members, without exposing them to financial risks they cannot carry.

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Tharman to Ngerng – GIC “pays no regards” to source of funds

“GIC knows it is managing government assets, that is the Government’s mandate for the GIC. The mandate is irrespective of the sources of funds it manages… and the GIC (hence) pays no regard to what the source of funds is.”

That was the response given by Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam, to a question by blogger Roy Ngerng at a forum organised by the Institute of Policy Studies (IPS) on Tuesday.

Mr Ngerng had asked about the role of the Government of Singapore Investment Corporation Pte Ltd – or GIC – in managing CPF funds.


CPF under review to better buffer against inflation: Manpower Minister
Minister for Manpower Tan Chuan-Jin (left) at the Insitutue of Policy Studies' forum on CPF and Retirement Adequacy. Photo: TODAY

The Government is looking at how it calculates the Central Provident Fund (CPF) Minimum Sum figure, and the amount by which it should go up every year, based on inflation, said Manpower Minister Tan Chuan-Jin on Tuesday (July 22) at a forum organised by the Institute of Policy Studies to discuss impending changes to strengthen the CPF system.

When the CPF system was introduced in 1955, the retirement age was 55. Life expectancy then, was between 60 and 62. Today, for those turning 65, one in two will live beyond 85, and one in three will live beyond 90.

"What happens if you are that one in three? What happens if you are that one in two?,” said Mr Tan. “So when we talk about shifting goal posts, I would say it is actually not about shifting goal posts. I think the game has changed, it is the same game but the rules have changed. The playing pitch has enlarged in very significant ways, the game is played slightly differently."


Inflation figure for CPF Minimum Sum hikes under review: Tan Chuan-Jin

The Government is looking at how it calculates the Central Provident Fund (CPF) Minimum Sum figure, and the amount by which it should go up every year based on inflation, said Manpower Minister Tan Chuan-Jin on Tuesday.

Currently, the CPF Minimum Sum is pegged to the Consumer Price Index, a measure of inflation. This rate includes imputed rent, which is what home owners would pay if they were renting their homes.

Said Mr Tan: "In terms of computing our inflation rate, one of the things we're looking at is actually imputed rents...(this) is something that perhaps we may want to consider not including."


CPF – simple answers for a simple reform?

Sometimes, judging from our politicians’ response to issues to the Central Provident Fund, you begin to wonder if the government either firmly believes that it already has all the right answers to citizens’ concerns about the CPF, or if it is desperately reciting from a worn and tattered script.

In fact, an event like the Forum on CPF and Retirement Adequacy, organised yesterday by the Institute of Policy Studies, saw many concerned individuals taking to the discussion with gusto, as they identified problem after problem for where the CPF is actually not addressing our retirement needs.

However, the responses from Manpower Minister Tan Chuan-Jin and Finance Minister Tharman Shanmugaratnam, who each led a panel discussion for the event, seems to suggest that they already have a pre-conceived plan for how the take the thorny CPF issue – which has attracted thousands to Hong Lim Park protests – forward: Keep a system that ensures a basic level of savings for retirement, keep it “sustainable”, keep it flexible for other uses such as housing and healthcare, maybe open up more options for CPF members to invest for higher returns, and government will bear the risks of GIC’s total investment.


Is This The Most Sensible Thing The Government Has Said Regarding CPF So Far?

There’s been a lot of opinions and statements (I’m trying to be polite here) regarding CPF floating around over the past few weeks. From Singapore’s latest blog martyr, Roy Ngerng, to Lim Swee Say’s “enlightening” statements regarding CPF, this is definitely the hot topic of the moment.

It’s been addressed so many times over (and even made the front page of the Straits Times a few days back) that I actually feel a bit silly talking about it again. But what caught my attention wasrecent statements made by Manpower Minister Tan Chuan Jin regarding the usage of CPF monies for payment of housing commitments, and his opinion on the minimum sum in general.

The Background Issue - For some time now, there has been quite a bit of chatter and feedback on what happens at the age of 55 when your CPF savings are shifted from your Ordinary Account (OA) and Special Account (SA) to your Retirement Account (RA). Normally, this wouldn’t be an issue at all. BUT, if you had been using your OA to service your housing loan and the money suddenly vanished from that account and reappeared elsewhere (in an account that is not servicing that loan), that’s obviously going to be a problem.


IPS Forum on CPF and Retirement Adequacy

The IPS Forum on CPF and Retirement Adequacy is structured around two panel discussions. The first looks at the desired outcomes of our CPF system based on current and projected retirement needs amidst the backdrop of our rapidly ageing population. The second focuses on how those outcomes can be achieved in a sustainable way. Speakers are invited to give their suggestions on reforming the system and their views on alternatives to it.

There is a dialogue session with Minister for Manpower, Mr Tan Chuan Jin, and a Closing Dialogue session with Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam.

This Forum is targeted at getting views on the CPF system from academics, experts as well as representatives of social and public organisations who are knowledgeable and interested in issues related to it.



Govt ready to be flexible with CPF on case-by-case basis

Responding to calls from Members of Parliament to allow greater flexibility for workers to use their Central Provident Fund (CPF) savings, for example, to repay housing loans, Manpower Minister Tan Chuan-Jin yesterday said the Government is ready to exercise flexibility on a case-by-case basis.


However, he rejected a suggestion from Tampines GRC Member of Parliament (MP) Irene Ng to make it automatic for lower-income CPF members who do not meet the Minimum Sum when they turn 55 to continue using their CPF for housing loans without interruption.

“Some of these members would be able to service their housing loans using cash, instead of drawing upon their Retirement Account savings and hence compromising the monthly payout in retirement,” Mr Tan said.


SINGAPORE'S CENTRAL PROVIDENT FUND (CPF)
This was first published by New American Foundation in April 2009 by Vernon Loke, Center for Social Development; and Reid Cramer, New America Foundation

In recent years, policymakers around the world have been attracted to the concept of integrating a consideration of assets into policy efforts aimed at securing and enhancing social welfare. The theory behind asset-based welfare policy suggests that while income facilitates immediate consumption, social development over the long-term occurs primarily through asset accumulation and investment ( Sherraden , 1988, 1991). Assets may not only provide individuals with the ability to exert control over resources that can increase their financial security, they might also orient owners to future aspirations and be linked with positive economic, psychological, and social effects. To explore policy efforts consistent with this theory, Sherraden (1991) proposed the establishment of life-long asset accounts for each individual, preferably for newborns, as a vehicle to implement asset-based welfare policies. He further suggests that asset-based policy should be inclusive, progressive, and built around a single integrative and coherent framework ( 2003a ).

The experience of Singapore provides an instructive case study for the potential of this approach. This affluent city-state in Southeast Asia has developed an innovative and comprehensive set of policies that employs an asset-based approach to social welfare (Asher & Nandy, 2006). At the center of these efforts is Singapore's Central Provident Fund ( CPF). The CPF has gained international recognition as a particular model for meeting social policy objectives ( Hateley & Tan, 2003). As one of the key pillars of Singapore's social safety net (Central Provident Fund Board, 2007b), the CPF seeks to facilitate retirement security while minimizing welfare transfer payments in a manner consistent with a national philosophy of self reliance (Central Provident Fund Board, n.d.-e).

While Singapore became independent in 1965, the CPF was originally established by the British colonial government in 1955 as a compulsory defined-contribution savings scheme. It was designed to provide financial security for workers after retirement or when they were no longer able to work (Asher, 1991). However, over the years, the CPF has been used to accelerate national economic growth (Central Provident Fund Board, n.d.-e) and has since evolved into a comprehensive social security savings plan with various pre-retirement uses such as financing healthcare, post-secondary education, home ownership, and other asset enhancement investments. Furthermore, the CPF is an integral part of the continuum of asset-based policies in Singapore that extend throughout the life course ( Loke & Sherraden, 2009). Policies such as the Children Development Accounts ( CDAs) that target children from birth to age six, the Edusave Scheme that benefits school-going children, and the Post-Secondary Education Accounts (PSEAs) are fully integrated with the infrastructure of the CPF. Unused balances in the CDAs and the Edusave Accounts are rolled-over to the PSEAs, which in turn transfers its unused balances to the CPF. With a portfolio of continuous managed investment, the CPF has become a life-long provision (Aw & Low, 1996).

related: Full Coverage

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WHY SPOREANS CAN'T SAVE ENOUGH IN OUR CPF: LEARNING FROM THE IPS FORUM

Why are Singaporeans unable to save in our CPF? Why is it that we contribute 37% of our wages into CPF, but the CPF is still not enough for our needs?

Last week, some speakers gave presentations at the Forum on CPF and Retirement Adequacy (organised by the Institute of Policy Studies). Their presentations will give you a very good insight as to why the CPF is inasequate for Singaporeans’ retirement and in the problems highlighted, you can see the solutions inherent in them as well.

Associate Professor Tan Ern Ser illustrated that up to 70% of the elderly in Singapore have CPF.

related:
IS CPF AN ASSET OR LIABILITY TO THE GOVT?
CPF QUESTIONS AND THEIR ‘FACTUAL’ ANSWERS


Consider impact of buying property on CPF savings

THE recent Institute of Policy Studies forum on the Central Provident Fund (CPF) and retirement adequacy has enabled many to better understand the critical role CPF plays in a person's retirement plan ("Private pension plans an option: Tharman"; last Wednesday).

It has also created awareness of the fact that many employees, after paying their housing loans, do not have much left in their CPF accounts for a comfortable retirement. It seems that housing loans are draining the bulk of CPF monies.

We must ask ourselves some questions. Before purchasing property such as, say, an HDB flat, do we examine our financial situation first? Do we consider what would happen if we or our spouses are unable to work to contribute towards repaying the housing loan?


10 SIMPLE QUESTIONS TO ASK ABOUT HOW THE GOVERNMENT MANAGES OUR CPF

To my simple mind, I just have some simple questions that I would like to ask about the CPF.

We have finally exposed the government and forced them to admit to some truths about our CPF but when a layman like us try to understand what is going on.

What does all these really mean?

related: Full Coverage

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Abolish CPF and the retirement age

It was only several months ago when PM Lee Hsien Loong launched a defamation lawsuit against Roy Ngerng for insidious and damaging attacks upon his character and name. The scope of this article, however, is not to question the morality of the lawsuit. Instead, it aims to delve into a field not visited by Roy in his allegations towards the Central Provident Fund (CPF) scheme.

This article seeks to challenge the legitimacy of the CPF scheme on moral grounds and dispute the existence of a retirement age in Singapore.

The CPF scheme was first introduced in the mid-1950s as a mandatory savings plan for Singaporeans, a policy which would fund their retirement. It was meant to relieve the burden on state finances supporting retirees who could no longer fend for themselves when their incomes dried up.

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CPF – government insists on tweaking a broken system, sows more distrust

I refer to “CPF system will evolve to meet changing needs: DPM Tharman” and “CPF under review to better buffer against inflation: Manpower Minister”. Both ministers were speaking at a CPF forum organised by IPS on 22 July.

Recall we had “Our Singapore Conversation” 2 years ago where, strangely, CPF was a non issue. Now that a ‘CPF’ forum has been organised, the more important issues such as transparency and the need to consult members on their needs are ignored. The government should not forget it needs to return CPF monies to their rightful owners because it is a flawed policy.

DPM Tharman cleverly deflected the issue to one of “taking higher risks to earn higher income from investing their CPF monies”. GIC’s opacity does not seem to be a concern to DPM Tharman.



Managing money for retirement

It is indeed a fair point to ask questions about the CPF. After all, CPF is “your money”. There have also been questions raised about “trust” in government. Yet, the issue is not just about government, but about trust in yourself, fellow Singaporeans and fundamental values about money.

Everyone starts from nothing and starts accumulating some sort of money. When young, that comes in the form of allowances, subsidy and perhaps, if you’re lucky, a silver spoon. This accumulation of wealth really begins to take shape once one starts entering the workforce, which is where the curve begins to pick up and wealth accumulation is fastest. However, there comes a time when one’s ability does not match that of a hungry young person in the workforce, resulting in a slower wealth accumulation.

“D” Day hits: It’s retirement. Suddenly one’s active source of income disappears as one leaves the workforce. Yet everyone must spend, which is why the curve suddenly goes down. Three cases can result: the case where one leaves a silver spoon behind (the surplus case), one where one comes with nothing and leaves with nothing (in economics: balanced and therefore maximum utility of money), and one where one spends more money than one had! (deficit)


CPF Discussion Points: Longevity, Adequacy, Housing and Withdrawal Age
The government’s PR machine is on an overdrive regarding this CPF debate. A few bloggers were invited to listen to it and write about it. I wasn’t there. In the Straits Times this morning, some experts share their views on how to restructure the CPF for the sake of a better retirement for all.

Let me pick out the salient points:
  • There are folks who raised to make the system more flexible so that they have a chance to earn a higher rate of return (Kyith: isn’t the current system already facilitating that)
  • There are folks who felt the CPF board should tweak the amount given back
  • Mr Tharman surprised the participants by saying, to allow for a private pension plan, first discussed by the government in 2007 may still be an option

CPF – What's Going On?

Two ministers spoke about the current state of the CPF system during this past month. What makes this unusual is the fact that the system has already been in place for over twenty years and we're only recently been told about the ins and outs of its function as a part of the national discourse. Do we have Roy and his impending lawsuit to thank for this? We don't know for sure but it has to be said that the attempts at explanation have been a long time coming. More and more Singaporeans are starting to question the reasoning behind the increases to the CPF Minimum Sum.

The G has been on a media blitz as it has repeatedly tried to explain things. The problem is that the G's explanation isn't going to reach most of the people it is trying to engage. REACH, the government's feedback arm has reported that while 8 in 10 know of the CPF system, most of them don't actually know how the pension fund/statutory board actually works. 1/2 of the 1000+ people polled don't even know that CPF Life will give them a monthly payout once they hit the age of 65. No one seems to have cared about this little tit bit because none of them have ever received a bad cheque from the CPF board. In fact the CPF continues to send out payments to retirees like clockwork. So why is there a huge kpkb fest over it now?

To put it simply: It's because people want access to our money when people want it or worse need it. People think that they are mature enough to know how to handle their own retirement plans. There's also the fact that people want all of their savings to themselves for their own personal use instead of having it locked away in some invisible "untouchable vault".


CPF Board refused to give statement of account to deceased's nominee

Hardwarezone Forum, 7 Jul 2014 - My uncle passed away not too long ago, leaving behind my aunty and my two teenage cousins. He had been the sole breadwinner of the household so it hasn't been easy on my aunty who is still in grief and now has to support her two children by herself.

My uncle had named her as the sole nominee to his CPF money prior to his death. This means that upon his demise, his CPF savings now belonged to my aunty. When the money was paid out to her, we had hoped it would help somehow reduce her burden. It turned out that the money paid out was not very significant.

My aunty requested my help to write to CPF Board to ask for my uncle's last statement. I did but the request was rejected by them. They claimed that the statement was confidential information that they could not release. If my aunty wanted this info, she would have to get a court order first. She was very upset. I found out that a court order could cost a few thousand dollars!! Can you believe that? Full story


What good is CPF Life when you’re dead?

CPF(no)Life scheme – 18% CPF members aged above 55 dead before reaching 65

Is the CPF Life scheme for the living? According to ICA statistics, the answer is clearly ‘no’. Every year, almost 3,000 Singapore residents will be dead before they can even receive one cent from their monthly payout at 65. (a negligible number in ICA statistics non-residents)

And out of the total of 16,213 aged 55 and above in 2013: - 23% or 3,870 between 65 and 74 will only be able to spend their CPF installments between 1 day and 10 years.


3 Biggest Complaints Singaporeans Have About Their CPF Accounts

Few questions divide Singaporeans as much as this one – What is CPF used for? As you process your own answer to that question, chances are the words “retirement,” “housing,” healthcare” and maybe “Ponzi scheme” are running through your head.

But no matter what function(s) you think CPF serves, everyone faces the reality of having to pay their “dues” to keep the system going. That means contributing 20% of your salary (up to age 50) every month to a scheme that only benefits those who vastly surpass the current minimum balance of $148K.

Sadly, more Singaporeans who have money in CPF and need it can’t even touch it. An ex-CPF employee named “Brian” (who wishes to remain anonymous for very obvious reasons), who deals with the valid concerns of Singaporeans daily, was kind enough to help us shed some light on what Singaporeans complain about most when it comes to their CPF accounts. Here are Singaporeans’ 3 biggest complaints about their CPF accounts:

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Government's CPF Public Relations
The Ministry of Manpower and Central Provident Fund Board released the following advertisement (TODAY 16 July 2014)

It is a curious piece of public relations.

The current Minimum Sum will give a monthly payout of about $1,200 from age 65 for the rest of a person's life under CPF LIFE.

Nothing is mentioned about the possibility that the monthly payout may be adjusted for a number of reasons set out in CPF LIFE Information Booklet:
  • Changes in mortality experience. If more people live longer than expected, the monthly payout might be lower, and vice versa.
  • Changes in investment income. If investment returns are higher than expected, the monthly payout might be higher, and vice versa.
  • Transactions that affect the Retirement Account balance e.g., refund of money from selling a property, top-ups, lump sum withdrawals etc.
  • Changes in the extra interest on the combined balances in a member's CPF accounts, including the amount committed to CPF LIFE under the LIFE Basic Plan, as the combined balances fall below $60,000.
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DE-COUPLE HEALTHCARE AND HOUSING COSTS FROM CPF

Any reform of the CPF scheme needs to concurrently look at healthcare and public housing reform. SDP’s Dr. James Gomez made this key point during a video forum organised by The Online Citizen last Saturday.

Pointing to two of the party’s policy papers on healthcare and public housing, Dr Gomez, who stood as SDP's candidate at the Sembawang GRC in 2011, explained the SDP’s holistic approach to tackling the burden currently placed on CPF monies.

He pointed that the present system forced CPF members to use their retirement savings to pay for their medical bills and housing loans.

Such an arrangement is ultimately unsustainable as CPF savings are depleted leaving retirees with little or nothing to survive on.

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CPF
– Dollars and Sense: Is Our CPF Really That Bad? Clarifying The Misconceptions
– TOC: CPF savings not adequate for retirement: 4 in 5 S’poreans
– Living Investment: CPF – Voluntary contribution for self-employed
– Musings From the Lion City: Not Our Money
– Five Stars and a Moon: Mandatory Savings and Mandatory Taxes
– Living Investment: CPF Life – Standard or Basic Plan?
– The IFA on duty: CPF private pension plans – sure way to lose money
– Singapore Notes: Hard Of Hearing
– Heart Truths: Sporeans Have Only $55,000 in Our CPF, Can Only Take Out $400!
– Likedatosocanmeh: CPF questions and their ‘factual’ answers
– Tots of Cynical Investor: Gov recycles hot air, All part of the wayang to diastract us?
– Five Stars and a Moon: Managing money for retirement
– Fresh Grads: CPF – What’s Going On?!
– Value Investhink: What’s Wrong with CPF? (Part 2)
– 2econdsight: And the Charade Continues
– Singapore Alternatives: Nonsensical Reply from Tharman
– Singapore Notes: Malleable Rules
– Spore Stockmarket Investor: IPS CPF Forum: The Future Retirement Landscape
– Singapore Notes: Stingy On Health
– My Singapore News: CPF is not just a game
– Living Investment: Why so unhappy with CPF now?
– Just Speaking My Mind: Increasing CPF Minimum Sum is Here to Stay
– Reflections on Change: Government’s CPF Public Relations
– Value Investhink: What’s Wrong with CPF? (Part 1)
– Reflections on Change: Temasek’s Protection Of Past Reserves
– Singapore Notes: Myths Busted

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What Lim Swee Say Was Really Trying To Say Regarding CPF

It’s tough to be a politician nowadays. Say something well meaning and it gets torn apart in seconds. On the bright side, it does lend itself to some shining examples of creativity, like how 55 years old is the new 21 (ok couldn’t help myself there). Well, Lim Swee Say’s latest statement on the use of CPF has drawn its share of detractors, but is it really all that bad? We take a look here:


Whilst speaking to reporters on the sidelines of the closing of the Singapore Model Parliament on 22 June, Mr Lim, who is also the Labour Chief, made the point that Singaporeans are living longer, and should consider refraining from making cash withdrawals from their Central Provident Fund (CPF) when they turn 55 in order to better prepare for their retirement.

Sounds all good and logical? What sparked a little controversy were his later comments toChannelNewsAsia (which has since been corrected) calling on Singaporeans to prepare for retirement by “using less CPF money when young”, and then saying that by “young”, he meant people who were 55 years old.


Defer CPF cash withdrawals to prepare for retirement: Labour Chief
Mr Lim Swee Say, NTUC Secretary-General and Minister in the Prime Minister's Office. (Photo: National Trades Union Congress)

Singaporeans are living longer, and should consider deferring cash withdrawals from their Central Provident Fund (CPF) when they turn 55 in order to better prepare for their retirement.

This point was made by Minister in the Prime Minister's Office Lim Swee Say, who said that besides housing, healthcare and education for children, Singaporeans' CPF money is meant mainly for their retirement purposes.

He said that deferring the cash withdrawals for uses other than housing, healthcare and education will ensure the current level of CPF payout can be maintained over time, and not be eroded by inflation.