Would fully agree if you are referring only to Singapore! Its not necessary like this in most First World Democratic countries.

Thank you for your positive contribution. You add value to the discussions in TOC.
Your point about one size fit all is very valid.
In all national schemes, that is always the problem. It becomes a blunt tool and will inevtitably cut some the wrong way.

When you pay towards a private pension scheme, the company puts at least 80% of your money in safe investments, guaranteeing a decent rate of return, with the remaining up to your choice of risk. So if the rate of return is high (when economy is good), the money accumulates and IT IS YOURS, YOUR MONEY IS GROWING IN TANDEM WITH THE VALUE OF THINGS.

With CPF, it is cash savings that we are talking about, with a miserable interest rate. Of course the money will depreciate in value due to inflation by the time you retire. Therefore CPF savings for retirement will NEVER be adequate.

1. CPF takes care of retirement.
No, it can only supplement your other savings/investments for retirement. As S’pore $ interest rates had been low for many years, CPF savings have not grown fast enough to offset inflation. Basically, one has to scale down one’s lifestyle in retirement if CPF alone is relied on.

2. CPF pays low interest
Actually it is higher than savings & FD rates for some time now. In fact some who had more than their minimum sum on reaching 55 actually left what they could take out in CPF to earn the higher interest. They seem to have full confidence in the CPF Board. Someone posted that CPF is a Ponzi scheme. This peculiar anomaly of paying a higher interest may bolster his view.

3. Minimum sum & age at which CPF money can be withdrawn keeps rising.
This is due to losing battle with low interest rates. At age 55 or whichever age CPF money can be withdrawn, the minimum sum is locked in for a number of years (previously 7 years) to grow the sum. It is then withdrawable, the amount depending on the interest rate at the time the minimum sum is placed in an annuity scheme. For those who retired years ago the annuity scheme paid a good monthly sum till death. Sorry, for those who are retiring soon, the same amount put in an annuity would pay less. Hence, the increase in the minimum sum in future looks likely so that a certain sum deemed appropriate for a retiree
can be paid out. Withdrawal age has to increase to allow the minimum sum to grow over a longer period.

4. Why cap salary for which CPF has to be paid?
For the employer’s benefit. Previously the employer had to match CPF paid by employees – 20% of wage for employee & employer. CPF probably reckoned that employers would find it most expensive to pay 20% for someone who says earns $10000 p.m. Employer’s contribution is less now after some tweaking during the bad times so maybe the cap can be increased.

Lastly, on ways CPF scheme can be improved. Mainly on its attempt to have one size fit all and to last a lifetime after retirement. Below a certain amount, let the guy take it all.(ha ha). Set a reasonable minimum sum and pay the monthly sum calculated for a lifespan of 80. If the guy lives past 80, the state continues to pay the monthly sum. How long can the guy rely on the state?

65 years old ? last time, I heard the oldman says 67 years old, and it surely increase with time. O…. annuity coming soon… that i’m going to pee my pants.

Did the gov even do what it preach about hind investment ? They gamble on your behalf, lose money and you pay for it ? Not true. When gain money, “show us the money” we ask. No, Shut Up, they say, “because that is for your own good”.

Working like ponzi scheme and then pretend it is not.

I guess we have all spoken much here. You may like to see my suggestion for change advocators at http://theonlinecitizen.com/2009/07/more-and-more-jobs-available-but-nobody-wants/comment-page-2/#comment-86776 (67) creducator

Look at his choice of words. He divides his people into winners and losers.
You can tell he harbours contempt for the majority as they are being seen as ‘losers”. They are only fit to live in pigeon holes.

I feel so sorry that the man, often solely credited by the media for Singapore’s success, is still around. What special herbs he is taking to prolong his existence?
But don’t despair, like all the dictators and emperors that have come and gone, this nightmare will soon come to past. No one can conquer death.

By the way, the man is a good friend of Henry Kissinger.

Read this :
Dr. Henry Kissinger wrote: “Depopulation should be the highest priority of U.S. foreign policy towards the Third World.”
National Security Memo 200, dated April 24, 1974, entitled “Implications of world wide population growth for U.S. security & overseas interests.”

Kissinger is very much alive today. They went to the Bohemian Grove (powerful rightwing industrialists, financials, politicans) gathering where Mr Lee was mistaken for being a waiter. Bohemian Grove list -http://obscurantist.com/texts/bohemian-grove-membership-list/

You can tell what sort of people associate with men like Kissinger. The man credited with Singapore’s success also said he favoured John MCain as America’s president instead of Obama. John Mcain, a rightwing Republican, is a warmonger and believe only in the language of force.

Very telling, isn’t it?

drool…. : )

Mr Lee: “…..A society will remain cohesive only if there is a certain sense of equity and fair play. If I have unbridled capitalism, winner takes all, like in America, and have an underclass, I will find my minorities over-represented and the society will be in jeopardy. They will riot.

“So, what do we do? We raised the levels of the losers. We give them homes which they will not be able to buy, we give their children equal education in schools they otherwise can’t afford, health services and so on and so on and where they have lost jobs because the jobs migrated and they were not educated enough to take the jobs that’s coming that requires higher skills, all right, you take this job, his lower pay, we make it up. Here is Workfare, give you the extra, but continue work. If you stop working, we are giving you nothing. We want no layabouts. You work, we make up. So, you find ingenious ways to keep them working and sufficiently rewarded so that they feel they are not abandoned and as a constant challenge and constant adjustment during this period.”

….read full text of “TRANSCRIPT OF MINISTER MENTOR LEE KUAN YEW’S INTERVIEW WITH ARNAUD DE BORCHGRAVE OF UPI ON 2 FEBRUARY 2008 AT ISTANA” at http://www.channelnewsasia.com/annex/MMinterview.pdf

post #71 on July 10th, 2009 2.04 am

////I suspect unlike you, many people deliberately muddle the two issues to argue for a freer hand in spending the money! =)////

yeh, you have a point too. there are enough old men who may be tempted by young foreign women to empty their CPF kitty.

but i think there should be more flexibility for people in this extra-ordinary difficult times, afterall there are real cases where mouths need to be fed, kids need money for travelling expenses, what more for some with maids, pets, so on….

They scared you so stupid mah (Weiqin #73), anyhow spend your money buy car, buy Lolex, buy toto, then got no money later on, or dump your money in Layman and lose all. But hor, I tot PM said Sporeans so educated & employable some more leh (means must be clever to make money), I oso wonder then how come cannot ownself look after own money. Weiqin said hor, we will all kenna conned by Layman, so better let gahmen (God) look after our money lah.

own $, decide by the owner how to use ma, correct?

unless the fund manager super good, then manage people’s $,

else still back to basic, owner manage own $ la, simple logic…

aiyoyo

You are either saying that Lehman is the only investment company around that is legitimate & regulated or you are saying that I am one of the smarter FEW who cannot read the small prints.

Can the Govt actually guarantee that this compulsory savings will be there for retirement and medical? What if there is a change of ruling party in the Govt? What if the ruling party do a runner? Who can guarantee they won’t unlike Lehman?

As CPF money is allowed for investment (more like shares speculation), what if its lost in the ‘investments’?

I think most people do not fault the idea of CPF, but have doubts on the people in charge of the funds.

Let’s clear the air, cpf can be used for investment, your medical bills, your HDB purchase. You will eventually get back your money at 65, which is meant for your retirement ( and medical bills which at this age is usually the case )

Although not spectacular, there will 2.5% interest growht that is guaranteed by the government, so your $ is not sitting there doing nothing.

Upon death, your money will go to the people of your wish or your immediate family.

So the whole arguement here is that
1. Government take away your money
2. You will die by 65 and not see your money

So my question is:
1. will you be disciplined enough to save your 20% and not buy a new subaru wrx?

2. even if you are savvy enough, will your investment institution be guaranteed not to collapse or default till you are 65?

I am sure there will be comments like
” i can invest and have greater growth”
” People do not have enough to eat”

i am very sure there are alot of investors who can get more than 2.5% return with their money, but are you sure as a government running a country, they will say: Hey take your money and invest in stocks and shares and get spectacular return but do not come looking for us when you lose it all”

or

” Look, i will keep at portion of your earnings and give you back with a bit interest with our country stamp guarantee”

For those who say people may need the money to feed themselves, well it is like putting your money in another pocket and taking it out, you are still using the money meant for yourself when you retire, yes you tide over, but if you cannot have enough now and take from the future , you will be much more worse off when you hit 65.

Besides people who cannot even feed themselves now probably cannot even contribute to CPF, they should be thinking of help schemes and not cpf.

So the reason why they are doing this is mainly to ensure the aging population will have some savings to tide them over whateven cost they may encounter good or bad, it is no different from pension fund in US and mind you, those are not immune to financial risk and mismanagement.

So why is it pushed to 65 instead of 55? I do not want to think of our government as saints but it is a practical decision:

1. Aging population with longer life expectancy
2. More problems encounter at 65 instead of 55 ?
3. if retirement is set at 65 , you probably will have to work until then and gov will have more money to invest ?

So you are complaining that you cannot touch your money and will die by then, i am sure your family can find some use with it, and you are one of those that probably don’t buy life insurance.

Lastly, the problem that CPF is not enough.

Well i think i think it is supposed not to be enough, i pressume it is supposed to be part of your savings. If you can answer my 2 questions above and get spectacular year on year returns with your 20% then yes it is not enough, but CPF i believe is meant for Common people and as such it is planned with that in thinking , and even rich people may go broke some day and CPF will act as a parachaute saving for them.

If CPF which is your saving is not enough, then maybe you are not saving enough?

OR

You are not earning enough …..

I am not Pro-gov but i see this CPF as a pension/savings for the aging as well as
a source of income to invest. This is what is called nation planning.

If not , you can always vote against them and take your 20% to buy your WRX.

Enuff said.

“i hope you do not assume spending the CPF more to frivolious spending”

I think you are right, in that not all spending is frivolous. If a person is living from hand to mouth, spending more is definitely necessary.

But one point is that even for people who are living from hand to mouth, one should be mindful that are many such years ahead (85-55 is 35 years). We might solve the problem now but it is a short term solution.

We should dissect the issue to two parts:
(i) CPF being not enough
(ii) CPF is being controlled and slowly rationed out.

If CPF is not enough and our answer is to simply let everyone withdraw more for retirement, that is just redistributing the same small pie, pushing the problem to later. I agree with the author that the main problem is CPF is not enough (see #31). In that case, the real solution is to grow it or supplement it with more ‘welfare’ support.

Now the thing is many people seize upon the issue of CPF not being enough and try to muddle it with the issue of ‘removing controls and rationing’ of CPF.

Firstly, it does not address the root problem but merely postpone it.

Secondly, it makes sense to do it and that is why many countries follow the principle of “control/rationing retirement funds” in the various retirement systems they implemented. (#61)

I suspect unlike you, many people deliberately muddle the two issues to argue for a freer hand in spending the money! =)

Thanks for the comment.

>>64. To 61) RW

Yes, i know people are complaining about minister’s high salary.
Yes, i know people are complaining our political system- not being able to ‘kick their ass when needed’.

Thank you for your comment on Singapore politics.