LKY- We don’t want to see you in 20 years time at the meet the people session and complaint that you got no money to eat.
Then we will probably give your food stamp…

That is the grant scheme of things.

In 2001, PAP knew that more than 50% of people don’t even have the mimium sum when they reach 55. They are worried.

They stop people from taking out the money and at same time increase the minimum sum so that chances of taking out is almost zero at 55.(for the poor)

They increase the minimun sum to $120,00 by 2013 and they knew that again more thant 50% cannot match that sum at 55.

2008 Annity scheme, the objective is that most people who live until 85 can have something $600…. and got no reason to see the government for food stampo

So that how it work.

To earn interest on your CPF, someone have to borrow the CPF money and invest something that is at least higher than 2.5%.
That someone is GIC or various government agencies.

The CPF board buy government bond and earn the interest in order to pay you.

So, Dr Ng at first said No and then said the relationship is not simple. The truth is Yes.

Now how do earn interest with the pool of money for the annuity.

the trick is the same. THe pool has to be big enought, so that any big distortion payout along the way can be smoothen out. That’s why it must be complusory!

The money will be invested on the government bond again and earn a low interest of 3%. by the way there is no mention of rate of return in the CPF
annuity schemes.

the CPF annuity is very clear give you a choice to choose, at 65, 70 75, 80, 85, 90
with payback or no payback when you goes to heaven!

You have to choose at 55, but you cannot get it until 65 earliest. So that 10 good years of your money is pooling inside to fun the payout. Ha ha 10 years, go and buy the savest bond in singapoe or dividend yield from good company SPH, you get at least 3 to 5%. Go and count yourself, you lost at least 50% of capital appreication on your money compounded from premium

So how do you choose?

Now, let say you are OK fellow, work 30 years in your life middle income, at 55 got 135K in the minimum sum.

Hint from LKY
1. check you family history, your anuty, uncle, how long they live, die of what illness?
2. Estimate what is your likely hood of your Life expectancy. If it is below 65

Choose 90, minimum premium committed is (4%)annuity and the rest return to your family if you die before 65.

But you contribute 10 good years of money to the pool for investment.

2. If you expect to leave until 80, Choose 65 and get your money fast but you pay a high premium.

3. If you father/mother, uncle and auntie are at least 90 years old and you live a healthy lifestyle, choose 65 and pay maximum premium ,get maximum payout from annuity account every month.

4. From 85 to 90, not many people are sane?

Finally, if you follow what Dr NG said, well I have not think about it, you know most Singaporean are lazy, I will leave it at default 80, ha ha good luck to you.

Dr Ng is rich, Cancer surgeon before and minister for at least another 10 years. He don’t need this annuity.

The truth is most people die at 75 to 85. you get nothing before 80, you are not only lazy but also stupid!

So the Default is 80, ha ha for the lazy and stupid.

If what the newspaper said that the scheme is easy to understand and it only takes 3 to 5 minutes to explain to the layman(security guard, delivery man) than I am sure this people will choose 80 default.
CPF hopes many people choose 80 because that is the best outcome.

why, A big pool of money to invest for next 25 years and then the majority of the payee will die at that age. No refund is even better.

Whan happen when everybody choose 90, no refund. The is scheme will work but the people can go and see the MP when their money in the retirement account is depleted.
MP will give you food stamp! from 85 to 90 years old.

What if everyone choose 65, it is a big responsibilites for the CPF, if everyone live until 90. (that will never happen!)

So my prediction for the next ten years

GST will raise to 10% as they attempt to reduce the personal income and company tax down.

ERP will be paid as you move the car from your house.

Mimimum Sum will be raised along with inflation and again >50% can never make it.

The govenment will raise the retirement age to 65 or even 70 to make sure as long you work and don’t need to give food stamp.

The Mean Test by Mr Khaw will be refined and expanded to make it even More Mean?

Guess what all this they will do it after election and before election a lot of goodies……

Collect $2 return $1 and collect again another $2 and return $1……

Bao Chiak—Dr NG said about the CPF annuity scheme. ya ya where got bao Chiak

1. I don’t think the Singapore Govt actaully values the elderly (Singapore would not be where it is today without their contributions)

2. The elderly seem to be discriminated in the workforce- their experience is invaluable . Their wages should not be cut because of their age.

3. How many people are going to live to 85 yrs- really! Lets get real. I had a very healthy grandmother who hardly had a illness in her life and she only lived to 81yrs.

4. Clearly these changes are to benefit the govt not the people of Singapore.

For example, in Australia the govt encourages the elderly to work until 75yrs if possible and their income is not cut because of their age. Retirement age is 62 (female)and 65 (males). The elderly are building blocks in Australia to lead the new generation forwards.

It’s time for Singapore to reconsider how they view the elderly. Come on, respect them and do justice by them.

Money isn’t everything. Yeah it’s important but does Singapore really want to drive Singaporeans out of the country- that is not beneficial to the country. WAKE UP!

Minister Ng Eng Hen has given similar untruths about unemployment figures to parliament not willing to disclose his basis or definition of unemployment in his statistics but he went on to claim success with job creations.

What people are more interested to know is whether he has admitted too many foreigners to come in and take over citizens’ mundane jobs thereby hyping up figures of new jobs created lowering the unemployment counts.

When he earlier claimed Singapore needs to have reserves and surpluses in order to attract foreign investment without answering question like how much reserves are enough reserves again he was short on truth and specifics.

Is he now again telling the same half truth – on what basis he could not reveal to citizens that CPF can indeed outperform the projected 4% returns eventually?

Do we need this kind of ministerial talents to run modern-day globalised economy?

The root problem is not annuities or CPF, but the question of whether we can continue to trust gov to do anything for the people. For one, I no longer has confidence in gahmen who believe money is the solution to all problem. Money is in fact the problem to the solution, because obsessive love of money breed greed.

To people who run business, they should know how Singapore Inc work ! First, the scheme is to get as much money from the public and lock them in to use money for investment and pay hefty salary to gahmen. This is the same principle of business. In business, the employers pay themselves first, and remaining as tax, so just pay just themselves large salary or just expand as fast as possible so there is no profit but expense, so no need to pay tax.

Secondly, when money is used, use same old reason of terrorism, globalization, economic bad times, inflation, and blah and blah to come out more plan to get money because the money is always not enough.

Remember, the time value of money. The gahmen pay themselves first of large money collection from their Money scheme every month, whereas the people get to the remainder of whatever is left over after 85 years ! By then, these gahmen could possibly be dead, and migrate and leave !

What there to be accountable by the gahmen ? Easy said as Minister Ng has assured us, but isn’t this the same MIW guy who don’t have credibility and integrity in first place ? Use what to assure us if one don’t have accountability and responsibility to the public in first place ?

If the GST $ goes solely to topping up CPF, it is not impossible to sell the policy.

But is that possible under the current govt?

I am not opposed to higher taxation, but I need to know where the $ is gg to.

Whatever reasons they provide for all their actions is hogwash to justify it cos they think the general population is unable to see through the illogicality of their reasonings and accept everything wholesale.

So don’t bother suggesting alternatives. They are not interested in it.

Some of the possible explanations:

Not everyone pay income tax. Need to keep income tax figure low.
Another consumption tax after 2% GST hike will not go well.

CPF is a larger contribution base. CPF members are not able to freely use the money and they may be less upset compared with taking more money from their disposable income. Also more tax / levy on disposable income will impact on consumer spending.

But the CPF can definitely be supplemented by general taxation. In fact CPF top-up is a form of supplementing CPF with revenues gain from taxes.

Anyway I really fail the grasp the reason for my CPF into such a complex scheme… Pegging to CPF interest rate to bond rate might not generate higher interest although theoretically it could.

It all depends on the bonds that the CPF board buys. Can you imagine what will happen if CPF board buy something that is similar to CDOs in the future?

In my opinion, the govt shd just use the 700m to start a state pension for s’poreans above 85.

If the govt is interested in providing even more welfare to its ppl. CPF could set up a to let S’porean deposit a portion of their CPF into a CPF managed investment acc i(something like a investment fund where you might lose $… but have the potential to generate higher returns) f they are willing to bear more risk , while increasing the interest rate for all other accounts by at least 0.5%.

Of course, this might mean that the interest rate of govt loans for buying flats might have to increase to above 2.6%, if they are they are funded solely by CPF.

since we are moving to an indirect taxed based system why do we need to use the CPF? Could the CPF be supplemented by the extra revenue gained from the taxes?

Actually, the annuities works the same way as a state pension scheme would work…

However the main difference is that I feel that we would be better served if this scheme is funded via general taxation (actually if we just use the 700m earmarked for higher interest rate to fund the state pension scheme we wont even need to increase taxation) and not CPF.

Afterall how many people are going to live beyond 85? Even if they do, for how long?

I am quite worried – and unconvinced – that they would make such drastic changes based on speculation about the future. I am not even sure if the old will have that $250 – $300 dollars by that time.

As it is, our CPI has increased – as reported by the news agencies. It is the fastest rise in the Consumer Price Index in 12 years, according to Associated Press reports.

I don’t know but I feel like they are hoodwinking us. Were we not told that they needed to raise the GST to help the poor? That raising the GST was for the “future ageing population”?

What happened to that?

Regards,
Andrew Loh