Our CPF Monies: Truth Denied From Us

This is a detailed summary of an article I had written. There is important information in this article and I would like to make it clearer so that more Singaporeans can read it. Please take your time to read it carefully. 

The information highlighted in this article is obtained from the Ministry of Finance (MOF)’s and CPF Board‘s website.

It is common knowledge that our CPF monies is used by the Government of Singapore Investment Corporation (GIC) for investment. But do you know that the MOF does not actually say this on their website? In fact, the MOF, I would argue, had wanted to confuse us with unclear representation of the information on their website. (Note: From the research, it might show that our CPF monies is invested only in GIC, and not with Temasek Holdings.)

The MOF has actually laid out the information of the management of CPF and the reserves, and the investment by GIC on 4 separate websites. If you do not go back and fro the websites to link the information, you will not realise that the CPF monies is actually used for investment by GIC. I will put it out here that the MOF has intentionally not mention the association to mislead Singaporeans. If Singaporeans cannot see this association, the government does not need to return the returns on investments to you.

Let’s begin.

Misrepresentation of Information #1: CPF is Not Invested in GIC

When I had searched for “CPF” on the MOF’s website, the first link that appeared was that of “Our Nation’s Reserves“. It seems that the MOF had a pressing need to de-link the association between our CPF and reserves, and had thus placed it as the first item to appear on the search, so that they could clarify with their version of the story immediately.

This is what I read from Section 1, where CPF was first mentioned:


  1. The MOF says that the reserves are made up of “total assets minus liabilities”.
  2. The CPF is a contributor to the liabilities: Liabilities include the “Special Singapore Government Securities (SSGS)”. “CPF monies are invested in the SSGS.” (Read: CPF is therefore not part of assets, and thus not part of reserves.)
  3. The reserves are managed by GIC, Temasek (and the Monetary Authority of Singapore (MAS)).
  4. The MOF does not elaborate further. For added clarity, these are the two conclusions that the MOF had hoped that we would draw: (i) The SSGS (which our CPF monies are used to invest in) is a liability and is not part of the reserves. (ii) Our CPF monies is thus not invested by GIC and Temasek, since these monies are not part of the reserves. – The MOF had not stated this conclusion because they cannot. It would be an outright lie. But they had positioned the information in this way, in the hope that we would draw this conclusion, so that they can throw us off their scent. 

For a moment, I thought to myself, had I misunderstood the government? Had I thought wrongly of them, when I had argued that our CPF is used for investment for the GIC and Temasek?

Misrepresentation of Information #2: The Government Does Not Borrow From Our CPF Monies

I then went on to Section 3, where CPF and the SSGS were next mentioned:

  1. In the first mention of SSGS, it was stated that, “No Government borrowings are for spending… the Singapore Government cannot spend the monies raised (from SSGS).” It was then said in a separate paragraph that, “All borrowing proceeds are therefore invested.”
  2. In the second mention of SSGS, it was stated that, “The Government does not borrow to fund its budget.”

Based on this, what conclusion are we to draw? (i) We have to actively remember that the SSGS comes from our CPF monies – this  association wasn’t stated on this webpage. (ii) Are we to assume that the SSGS (and our CPF monies) is actually borrowed by the government? (iii) But yet, later on, it was said that, “The Government does not borrow to fund its budget.” So, actually, the government doesn’t borrow from our CPF monies? Which is it? Does the government borrow or not borrow from our CPF monies?

I would argue here that the MOF had presented the information in an unclear way to confuse us, which again, I would argue, was to throw us off their scent. Of course, it could simply be a case of my lack of finess in being able to understand the information. Then, you can be the judge here. Finally, If you do not read carefully, you would miss the statement on this webpage: “More details of Singapore Government Borrowings are found here.” Instead of explaining the government borrowings on this same webpage, the MOF had included an inconspicuous statement here to redirect us to the link on government borrowings – hoping that we will miss it? 

Misrepresentation of Information #1 and #2 Debunked

I then went into this link on the “Singapore Government Borrowings“. We are finally able to get a much better picture here. Below is a summary of the main points:

  1. Our CPF monies are invested in the SSGS.
  2. The government borrows from the SSGS.
  3. As of Dec 2011, the government borrowed S$216 billion from the SSGS.
  4. “The Singapore Government cannot spend any monies raised from Government borrowings. All the proceeds from the Government’s borrowing must therefore be invested in reserves.”
  5. SSGS is invested in the reserves. (Read: Our CPF monies is channelled into our reserves.) 
  6. “The Government’s assets are mainly managed by GIC.” (Read: The reserves are made up of assets. Our CPF monies is channelled into our reserves. It is now part of the assets. GIC thus manages our CPF monies.) 
  7. These are the unstated conclusions: (i) Our CPF monies is invested in the SSGS, which the government borrows to invest in the reserves. (ii) Our CPF monies are thus invested via GIC, since the reserves are managed by GIC.

Misrepresentation of Information #3: Reserves = Assets? 

The MOF had made a deliberate attempt, I would argue once again, to reduce the association between the government borrowings, the reserves and GIC.

  1. In paragraph, 2.7, the MOF states that, “Proceeds from the Singapore Government’s borrowings are invested, as indicated in para 1.3.”
  2. I had to then refer to paragraph 1.3, which states that, “… the Singapore Government cannot spend any monies raised from Government borrowings. All the proceeds from the Government’s borrowing must therefore be invested in reserves.”
  3. I then went back to paragraph 2.7, which continued to state that, “The Government’s assets are mainly managed by the Government of Singapore Investment Corporation (GIC).”

At point 2, the MOF had stated that borrowing has to be invested in, “reserves” and in point 3, the MOF had stated “assets”. If you are not an economist or had not read Section 1, you wouldn’t have seen the association. Is this a deliberate attempt by the MOF to prevent us from knowing that our CPF monies are invested via GIC.

At this point, it is clear that our CPF monies is actually invested via GIC. Why then did the MOF state upfront that the reserves are made up of “assets minus liabilities” and that the CPF is thus not part of the assets and reserves? By extension, the MOF wants us to think that our CPF is not invested via the reserves, since its not part of the assets, and thus not also via GIC and Temasek. But, we can see clearly now that the CPF monies is indeed invested via GIC, at least. 

Why Misrepresentation of Information was Necessary – To Deny Us of Our Earnings.

But this is not the end of the story. I looked at two other websites:

  1. The MOF had stated that the government had borrowed S$216 billion from the SSGS, which is our CPF monies. For comparison, according to CPF’s Annual Report, the CPF members’ balances was at S$208 billion in 2011.
  2. In a separate news release on 15 June 2012, the CPF Board stated that the 10-year yield from the Singapore Government Securities (SGS) is 1.72%. (Note: I am not sure why the CPF Board had used the 10-year yield from the SGS when our CPF monies is invested in the SSGS, and not in the SGS)
  3. According to the CPF Board, “Savings in the Special and Medisave Account (SMA) currently earn either 4% or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is the higher.”
  4. “The 12-month average yield of the 10-year SGS plus 1%… works out to be 2.72%.” So, the SMA interest rate… will be maintained at the current floor of 4%.

Thus the government actually gives us an additional interest of 1.28% on top of the earnings from the investment of our CPF monies in the SGS (or the SSGS??). But wait, isn’t our CPF monies actually invested GIC? Should we look at the earnings from GIC instead to have a better idea as to what we had really earned? 

I went back to Section 1 of the MOF’s Our Nation’s Reserves website. I wanted to find out what the interest rate of the investment returns from GIC is. Let’s explore further:

  1. Some background information: the total funds managed by GIC are not published but “what has been revealed is that GIC manages well over US$100 billion.” Does this mean the GIC actually manages between S$208 – S$216 billion?
  2. The rate of return for GIC over a 20-year period is 7.2% (refer to chart 1 in the link).
  3. Back to the CPF, the interest rate on our Ordinary Account is currently only 2.5% based on, “the computed CPF interest rate (is) derived from the major local banks’ interest rates for the three-month period, 1st February 2012 to 30th April 2012, (which is) worked out to be 0.16% per annum. However, members will receive the higher rate of 2.50% as legislated by the CPF Act.”
  4. Again, the interest on the Special and Medisave Account is only 4%.

These are the questions we would then need to ask:

  1. Why is the interest for the CPF Ordinary Account based on the “major local banks’ interest rates’? The government had borrowed our CPF monies for investment via SSGS/GIC? Shouldn’t our Ordinary Account be earning based on the returns from SSGS/GIC’s investment?
  2. Our CPF monies is said to be invested in the SSGS. However, the earnings from SSGS applies only to the Special and Medisave Accounts. Why aren’t the earnings from SSGS applied to the Ordinary Account as well? Why the discrepancy?
  3. Our CPF monies is actually invested in the GIC. If the GIC is earning an interest of 7.2%, doesn’t that mean that our CPF monies should earn a higher interest, instead of basing it on the 0.16% banks’ interest rate and the 1.72% SGS interest rate?
  4. Where did the 4.7% and 3.2% of our returns, respectively for the Ordinary Accounts (OA) and Special and Medisave Accounts (SMA), go? Why did the government short-changed us?
  5. Has the government known that they have short-changed us, which thus explains why they would continue to keep a higher floor interest rate of 2.5% and 4% for the OA and SMA, because they know that if they don’t, we will prod further and eventually actually find out that how our CPF is actually earning at least a 7.2% interest. 

Did this shock you? Because it did shock me. By a mile.

Why did the government go through such an elaborate process of delinking the association between our CPF monies and the reserves, and thus with GIC? Why did the government take such care and effort to present just enough information so that they could provide enough information, but not too much, so that if we do not draw the association, we won’t know – that our CPF monies is used for investment in GIC? Why did the government go out of its way to disguise how our CPF is actually netting an interest of 7.2%, and not the 0.16% or 1.72% which they would lead us into believing? 

Why has the government taken us for a ride? 

This is not forgetting that in the CPF Board’s news release on 30 may 2012, the CPF Minimum Sum was raised from $131,000 to $139,000. Why should we be paying more for the Minimum Sum, when the government hasn’t even returned to us from the investment of GIC all that is rightfully ours?

The government has not been transparent to us in the management of our finances and monetary contributions to the governments’ coffers. This is our money. The government should answer to us, not develop an elaborate story and scheme to deny us of the right to information on how our money is being used. This can only make us ponder further – why does the government want to cook up such an elaborate scheme to deny us of a clear picture? What is there to hide? Why do they need to hide how our money is being spent? 

Can we still trust our government if they choose to use underhand methods and conjure up stories after stories of how our money is managed, which becomes further and further from the truth? You have seen it for yourself, in this article, how I had to dig out this information, because it wasn’t at all presented coherently in the first place – this coming from a government which prides itself as being open and transparent. There are other things the government has not been open and honest with us.

  1. For example, the government keeps harping on how we have low taxes, and thus public expenditure cannot be increased. However, do you know that the CPF monies that the government collects is actually 4 times the amount of tax revenue collected?
  2. Do you know why the government had chosen to collect monies from us via CPF, rather than by taxes? 

Why is our government not honest with us? This is what I want to know. Why are we putting our faith in a government that hides the truth from us? Why is our government denying our right to knowledge? Because they fear that once we know what they do, that we will vote them out for the next elections, that they will not remain in power? What then are they doing with our monies? Reinvesting it – but for who? For themselves? 

I want a government which will respect my right as a person and which will act to protect my needs and well-being. Not a government which hides behind fallacious stories in the hope that they can build better lives for themselves, whilst neglecting the lot of the rest of us way down at the bottom of the ladder. 


  1. Pingback: Income Inequality in Singapore. Govt: So What? Climb Your Way Up « The Heart Truths
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