(Please note that this is a two-page article.)
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- Page 1: How You Are Made To Pay More Than Two Times The Price Of Your HDB Flat
- Page 2: How Your CPF Savings Gets Cut Down By Half
This Is Why You Will Never Have Enough In Your CPF And Will Never Be Able To Retire
Here is what’s next. Yes, there’s still more.
As mentioned at the start of this article, if you had left your CPF untouched and not take any of the money out to mortgage your flat, you would have nearly $700,000 left inside for use.
So, what does it look like if you have taken this money out from your CPF?
Remember, if you had bought a $300,000 flat, the monthly mortgage would be $961. So, assuming that you and your partner would split the mortgage equally, to be paid by both your CPF, each of you would pay $481 out of your CPF.
By the end of the mortgage after 30 years, you would have paid $202,980 into the mortgage and $110,397 in CPF accrued “interest”. In total, you would have paid $313,377 from your CPF to the flat (Chart 25).
What this means is that when you want to take your CPF out at 55 (in 2035, assuming you started working in 2001), you would actually be able to take out only about $370,000, after paying off $313,377 (Chart 26).
Now compare this with what you would have gotten if you hadn’t used your CPF to buy the flat. You would lose more than $300,000 in retirement savings, or half of the CPF that you have used your money to safe (Chart 27)! 50%, mind you! Gone! Poof! Magic! Disappear!
But wait a minute – not so fast.
You didn’t think it would be that easy, did you? You didn’t think they would let you take this $370,000 so easily, would you? Want to retire? Fat hope, not under the PAP.
Of course not. After all that contraption above, surely there would be someway to prevent you from even taking this $370,000.
The PAP Spiked Up The CPF Minimum Sum
Here comes the CPF Minimum Sum. No, the CPF Minimum Sum wasn’t created just for fun. It was created for a valid reason – as part of this entrapment plan.
According to the CPF, they want you to set aside a minimum sum in your CPF to “meet (your) basic needs in old age”.
Since 1997, the CPF Minimum Sum has grown from $30,000 then to $148,000 today (Chart 28).
In other words, it has grown by 400% (Chart 29).
In fact, the CPF Minimum Sum has grown by an average of 6.4% every year from 1987 until today but do you know how much inflation has actually grown? Inflation grew by an average of only 2% (Chart 30). So, can someone explain to us again why the CPF Minimum Sum was growing by 3 times faster than inflation?
Now, if the CPF Minimum Sum continues to grow by the average of 6.4% every year, this would mean that when you want to take out your CPF at 55 in 2035, the CPF Minimum Sum would have grown to $579,399 (Chart 31).
And how much did you have left inside your CPF again? After paying for the mortgage, you would have about $370,000 left. Wait, what? You would have only $370,000 but at the rate the CPF Minimum Sum has been growing like crazy, by the time you want to take your CPF out at 55, not only would you not be able to meet the CPF Minimum Sum of $579,399 and not be able to take your money out, you would actually have a shortfall of more than $200,000 (Chart 32)!
Where are you going to get that kind of money from? Now, you can imagine why there are so many Singaporeans who are forced to continue to work today – because they simply cannot meet the CPF Minimum Sum even today. Thus as Leong Sze Hian has estimated, nearly 90% of Singaporeans won’t be able to meet the CPF Minimum Sum, won’t be able to take their money out and won’t be able to retire.
Now, even if the CPF Minimum Sum grows at, say 4% (the midpoint between the average CPF Minimum Sum growth rate and average inflation growth rate), the CPF Minimum Sum would still have grown to $350,748 (Chart 33).
This means that at 55, you would be able to withdraw only about $19,000 (Chart 34). In 2035, this would barely last half a year.
What is going on???
Maybe if I give you more insight below, it would give you a better idea as to what is actually happening in Singapore.
It was explained by Dr. Linda Low that, “In 1984 the government tried to increase the CPF withdrawal age from fifty-five to sixty. The attempt was very poorly received, as people viewed the government as having broken a promise.” She further explained that, “One way of getting around this problem has been to institute a scheme minimum sum, which softens the impact. Under this scheme, one can still take out a lump sum when one reaches the age of fifty-five, but one must keep a certain minimum amount in the fund, which can only be withdrawn as an annuity when one reaches the age of sixty.”
She concluded that, “The government is beginning to get people to accept the idea that the withdrawal age might have to be increased. When it will be politically expedient to increase it is another issue. (Chart 35)”
Now, the CPF Minimum Sum wasn’t always used in such sinister and deceptive ways. In the earlier years of the CPF Minimum Sum, from 1987 to 1995, the CPF Minimum Sum was increasing at an average of 2.3%, which is on par with the average increase of inflation of 2.3% (Chart 36).
But from 1996, everything started going haywire. In 1996, the CPF Minimum Sum was increased by 12.5%. Then it was increased by 11.1% in 1997 and 10% in 1998. Since 1996, the CPF Minimum Sum kept increasing way and above inflation. Inflation grew by an average of only 1.8% from 1996 to 2013 but the CPF Minimum Sum grew by a massive 7.6%, or 4 times more (Chart 37)!
Now, what is going on?? Why were they driving up the CPF Minimum Sum? For what purpose?
The PAP Pushed Down The CPF Interest Rates
At the same time, when the insane increase of the CPF Minimum Sum was instituted in 1996, the government also suddenly decided to give separate interest rates for the CPF Ordinary Account (OA) and the Special and Medisave Accounts (SMA).
Quite clearly, all these did not happen by accident. In fact, in 1994 and a few years later, the CPF interest rates were depressed to their lowest ever and never climbed back up anymore. In 1999, the CPF interest rates were depressed to 2.5% for the OA and 4% for the SMA (Chart 38).
Now, you really have to think carefully about why the PAP did what they did – why did they suddenly spike up the increase in the CPF Minimum Sum? Why did they split the interest rates for the OA and SMA, and then depressed the OA interest rates to its lowest level since 1963 (Chart 39)?
In other words, why did the government want to undercut Singaporeans?
In the first place, why does the PAP get to unilaterally decide how much interest Singaporeans should earn from our CPF? What is the benchmark that is used to determine the interest rates? In other countries, the interest rates would have been pegged to the returns of our investment.
What the PAP did was very deceptively smart. They invested our CPF in government bonds and maintained the interest rates on those bonds at a consistent low rate, so that it would seem that our CPF would have to earn a low rate as well. But the real interest that our CPF is earning is via Temasek Holdings and GIC and if so, our CPF should be pegged to the 6.5% to 16% that they are earning, and not an artificial interest rate determined by the PAP’s untransparent manipulation of the interest rates (Chart 40).
The Dirty PAP CPF-HDB Entrapment Scheme
By now, if you are not yet shock and horrified, or completely floored, I am not sure what will.
This all weren’t accidental. The PAP had planned it all the way. What made the PAP do what they did? What made them want to shortchange Singaporeans and cut us down?
To sum it up for you, what is this CPF-HDB insidious scheme all about? (which is also explained in Chart 41 below)
- Make Singaporeans pay the highest CPF contribution rates in the world
- Split the CPF OA and SMA interest rates so that they can give differential rates and create the illusion that a small part of your money is earning a higher interest rate, so that it’s easier to give you a lower rate on the other.
- Give Singaporeans the lowest CPF interest rates ever – the 2.5% interest rate that we receive now is what the CPF was earning in 1955 and is possibly the lowest rates anywhere in this world.
- Calculate how much they would have forced Singaporeans to accumulate into the CPF, then…
- Give people the illusion that the HDB flat is something that we should own so that we would want to buy a flat. Then increase the prices of the flats (since they own public housing anyway and can decide price increases at their whims and fancies) by precisely calculating how much Singaporeans should pay to almost wipe out their CPF (Leong Sze Hian and Han Hui Hui has shown how since 1980, the salary of an operator has only gone up roughly 2 times ($500 to $1,100) while a 3 room flat in Queenstown has gone up 17 times ($20,000 to $335,000).
- Once that’s done, keep drilling in that we can use their CPF to buy their flat, and charge a high interest rate on borrowing from the CPF to repay the flat.
- Create another trick by making us pay a 2.5% “accrued” interest rate on money that we do not have inside the CPF (and which we should not have to pay but who cares, since they think that we won’t understand anyway)?
- Puts in a CPF Minimum Sum then spike it up so that after making Singaporeans wipe out almost all their CPF, lock in whatever is left in the CPF Minimum Sum to prevent Singaporeans from taking out our money.
Smart right? Some people would call this a Ponzi scheme. Some people would call this the CPF-HDB sham-deal. I don’t think they are wrong either way.
What the hell are they doing with YOUR RETIREMENT FUNDS? This is your money, for goodness sake! Not their banks!
But you know what, it’s precisely it. The PAP is treating the CPF and HDB like their banks.
Here’s a final shot for you.
Your CPF is not your money.
They have already created this scheme and entrapment plan to turn the CPF around into their money.
If it’s not clear enough for you. Last year, there is $253 billion in the CPF. Singaporeans only took out $15 billion, or just about 5.9% (Chart 42).
But where did the rest of the 94% of the money go? Shouldn’t it be your retirement money? Why is it not going back into your pockets?
First, as you have seen above, they have devised many methods to make you put almost half (37%) of your salary into their CPF bank and then also created many ways to prevent you from taking your money out, by locking you in and by devising many different schemes to siphon the money off you, using the housing mortgage, CPF accrued interest and the CPF Minimum Sum (Chart 43).
And what happens? Singaporeans have the lowest purchasing power among the high-income countries and we also have the least adequate pension fund. It’s not a coincidence at all. It was all planned. Give people low wages, take the wages back via the so-called CPF pension fund, then lockdown the money inside the CPF and siphon it off and leave Singaporeans with almost nothing.
Now, throw them a bone and let them struggle. Bark, now, bark. And have a good show.
This, my friend, is how they have trained you. You are not a citizen. They’ve never treated you like one.
And how is it a bank (which is also explained in Chart 44 below)
- Create the CPF bank. Force you to deposit 37% of your wage into CPF.
- Then create the HDB bank. Make you transfer the CPF money (mortgage loans) from the CPF into the HDB bank.
- Put a high deposit level (high flat prices) in the HDB bank then make you transfer even more money from CPF into the HDB.
- Pay you the lowest interest rates for the CPF bank and keep the rest of the interest earned for themselves.
- Tell you they have to earn interest on non-existent money in your CPF, even though you would have taken the money out and rightfully shouldn’t have to pay interest on it. (Or “loan” you “your” CPF money and make your pay additional interest on it)
- Put in a minimum deposit level (CPF Minimum Sum) and tell you that you cannot take your money without having this minimum sum inside the CPF.
- Effectively, our CPF is locked-in by this entrapment plan. Meanwhile, the CPF bank has grown to $253 billion.
- The HDB bank should have grown to more than $300 billion by now?
- Meanwhile, you have to scrimp and save because they are only throwing bits at you – low interest rates and low withdrawals.
Who is earning, my friends? Where is your money going? Is CPF still your money?
It’s all planned, my friends. A long time coming, indeed. But they’ve planned for it for a while now.
How do you entrap Singaporeans using the two largest bank vaults they have and which they can easily modify to earn from you?
But wait a minute – where can you see a bank which operates in such a tyrannical way? Where can you see a bank which unilaterally sets the rules and tell you, you either give in or you get out.
Oh, wait. You can’t even get out because guess what, it is already mandated that your CPF has to be extracted for them. Why do you think they try so hard to want to make the self-employed pay CPF and would increase the fines for companies which do not pay the employees’ CPF?
Which bank is so undemocratic that it makes all the decisions and forces you to abide by them?
Well, the PAP Bank. You voted for them, you gave them your vote and they ran amok with it. They knew no one was going to stop them. And they told you it’s for you own good, found a way to make you believe them and give your money to them anyway. They gave you a bone and told you it’s gold and they’ve made you pray to them and thank them for it.
And so they took over the companies, they monopolised basic services and they took over your CPF, your homes and monopolised them. Now, your home has no value when the lease ends, your retirement fund is only a pigment of your imagination and they can do whatever they want with it – whatever rules, whatever games and however they want to torture you.
You gave it to them. You voted for them. You chose to give up your right to find out what’s going on in Singapore. So now they will make use of you and squeeze you dry because guess what, they can.
It’s about time we have some balls and stand for our own rights now. It’s about time you get angry enough and you get out and you get back at them. They have trampled on you long enough. They have treated you like fools and made you do their hard work for them, while they take your money and they pay themselves millions, while they enjoy the high life and you pick up the pieces.
Today, our society is breaking apart. Singaporeans are suffering because of the PAP’s greed and their selfish wanton desires. You gave them your vote election after election and they’ve walked all over you for the past elections. So, they’ve treated themselves like kings because no one, no one dares smack them in the face and tell them to get back in their place. So they ran amok and they ran you down, and you sit there wondering how it all happened.
They had 50 years, god damn it. They had 50 years to tear you apart, limb by limb. And there you are, thinking and hoping that one day they will turn around. It’s too late for them to turn around now. 50 years of entrapment, you think they will let it all go so easily?
It’s time you get some balls and stand up. It’s time you behave like a Singaporeans and fight for your rights. It’s time you live up to your pride and you make it count. By now, you better be aroused enough. They took your money, they took your life. It’s no joke. And if you are still sitting down and if you still think you can choose to turn a blind eye, then my friend, you have lost it.
Fight, my friends. Fight. Fight to get back the Singapore that is yours, that is ours, that is ours to live for and to fight for.
They cannot take our homes and our land from us. They cannot rob us and get away with it. Fight, my friends. Fight.
On 3 May 2014, at 4pm, we will be holding a protest to protest for our rights to have fair wages and rightful employment. And we will fight and show them our might. Now, they won’t listen but it doesn’t matter, does it? Because it’s no longer about asking them to listen. It’s about us coming together and making our voice and our power heard. Let’s come together and show our unity. Let’s come together and let them know Singaporeans are never going to take it lying down anymore. We will fight them and we will beat them.
If you’ve decided to attend the event, do pledge a $1 commitment to attend this event. Each pledge will be used for the event. We hope that more Singaporeans would take a stand and come together in a show of unity to let others know that it is time we will no longer allow our rights to be abused right in front of our eyes. We need to take our country back. You can transfer your $1 by ATM, Internet banking, or cheque, etc, to POSB Savings Account No. 279-12328-0.
The more people who come, the more they will realise they cannot have their way. The future of our country can only be decided by the collective will of the people in Singapore and not by their wanton greed.
Join the Facebook event page here.
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