Truth Exposed: The Dirty CPF-HDB Scheme To Trick Singaporeans

By Singapore Singaporeans and Roy Ngerng

(Please note that this is a two-page article.)

Page 1, 2

There is something very insidious about the CPF – something that they have never told you. Today, let’s uncover the truth about the CPF and find out its true colours for ourselves.

Let’s jump straight in.

Do you know that if you had started work at the age of 21 in 2001 and earn a median wage, by the time you are 55, you should have accumulated almost $700,000 in your Ordinary and Special Account (OSA) (Chart 1)?


Chart 1

But why is this not happening to many Singaporeans?

According to Leong Sze Hian, he estimated that only 1 in 8 Singaporeans are able to meet the CPF Minimum Sum and are able to retire.

It has also been shown by 3 studies that Singaporeans have the least adequate pension funds.


Chart 2: Developing Asia’s Pension Systems and Old-Age Income Support


Chart 3: Melbourne Mercer Global Pension Index


Chart 4: Pensions at a Glance Asia/Pacific 2011

But, why do Singaporeans have the least adequate pension funds compared to anywhere else in the world, when Singaporeans actually contribute the highest proportion of our wages into CPF? The maths simply doesn’t square.

Manulife had also shown that as compared to the other Asian tigers, Singaporeans are made to set aside the largest proportion of our wages to CPF, leaving us with the smallest purchasing power.


Chart 5: Manulife Asset Management Asset rich, income poor? Key components of retirement income security for aging Asia

Let’s break down the reasons why for you.

Singaporeans Are Forced To Pay The Highest CPF Contribution Rates But The PAP Gives The Lowest Returns In The World

First, you need to know that the most basic reason why Singaporeans have such inadequate pension funds in our CPF is because of the low interest rates.

Singaporeans might pay the highest CPF contribution rates in the world (Chart 6).


Chart 6: Social Security Programs Throughout the WorldSocial Security Programs Throughout the World: Asia and the Pacific, 2012Social Security Programs Throughout the World: Europe, 2012Social Security Programs Throughout the World: The Americas, 2011Social Security Programs Throughout the World: Africa, 2013Coordinating Healthcare and Pension Policies: An Exploratory Study

But as I had written about before, Singaporeans also most likely earn the lowest interest in the world.


Chart 7: Mandatory Provident Fund Schemes Authority A 10-year Investment Performance Review of the MPF System (1 December 2000 – 31 December 2010), Interest Rate Declared on Provident Fund Accumulations Since 1952, Mandatory Provident Fund Schemes Authority A 10-year Investment Performance Review of the MPF System (1 December 2000 – 31 December 2010), Employees Provident Fund Dividend Rate

This would explain why even though we had to set aside such a large chunk of our wages into the CPF – 37% to be exact – our pension funds is actually one of the least adequate in the world!

This is what it actually means – the CPF contribution is from our wages and the CPF interest rates is from the government. So, what is really happening is that Singaporeans are made to part with the largest chunk of our wages in the world to CPF while the government gives the lowest interest rates anywhere in the world. Singaporeans are made to give the most and the PAP allows themselves to give the least (Chart 7).


Chart 7

And as explained, the PAP has taken our CPF to invest in Temasek Holdings and GIC – they have earned an interest of 16% and 6.5% respectively. Since they are using our CPF and earning such high interest but we are only getting back 2.5% to 4%, this means that what we are receiving is very low – we are not getting back the returns on our CPF that we should from these investments. This means that the interest that is not returned to us is actually an implicit tax that the PAP is making Singaporeans pay, on top of our CPF (Chart 8).


Chart 8

So, here’s the first reason why Singaporeans have the least adequate pension funds – the PAP takes out too much of our wages into CPF but gives us too little back in return. Why do they need to take so much of our money away for themselves for?

But the next reason is what is more important and would shock you.

How Using Your CPF To Buy A HDB Flat Entraps Singaporeans

Singaporeans are also able to use the CPF to purchase their homes.

I will go quickly through the maths but you don’t have to get too engrossed with the technicalities. Just try to see the whole picture.

So, assuming that we want to buy a new HDB flat at $300,000, we would put down a 20% downpayment of $60,000. 15% or $45,000 can be paid using the CPF (Chart 9).


Chart 9

Take note of the CPF amounts.

For the rest of the 80% or $240,000, if we were to also use the CPF to pay for it, we would need to pay a monthly mortgage of $961 for the next 30 years.

After fully paying for this mortgage for 30 years, we would have paid out $345,960 in mortgage (Chart 10).


Chart 10

In total, this means that we would have paid $405,960 for the flat (downpayment of $60,000 and total mortgage of $345,960).

At first glance, we might think we need to pay only $405,960, or about $100,000 more than the actual “value” of the $300,000 flat (Chart 11).


Chart 11

But actually, you are paying a lot more than that – read further. Now, this is where things get even scarier.

The PAP Tricks Singaporeans Into Paying Additional Interest Rates For Nothing

What do you mean I have to pay more than the downpayment and mortgage that I have already finished paying off? How can there be any more money that I need to pay?

This is because there are some things that the PAP has not told you upfront (or you might have missed amidst all the confusion that they have intentionally created).

When you take money out from your CPF to pay for the mortgage, when this money is taken out, you wouldn’t be able to earn interest on this money since the money is taken out, right? – which is understandable. What this means is that the government won’t need to pay you this interest and you won’t be able to earn interest.

So, that’s the easy part. Here is what you have not been told.

Now, what the PAP has then said is this – since you have taken this money out and are not able to earn the interest, you will now have to pay the interest back into your CPF. You will have to pay the 2.5% interest that is “lost” back into the CPF.

The PAP calls this the CPF accrued interest. This is what the PAP says: “If you sell your HDB flat, you need to refund the principal amount you had earlier withdrawn for the purchase of the flat, including the accrued interest, to your CPF account. This interest is the amount you would have earned, had the savings not been taken out.” Wait, no one ever told me about this! I thought it’s only the mortgage!

So, see if you get this – if you had left your money inside the CPF, the government will pay the interest. But when you take the money out, the government wants you to pay the interest back. In the first place, since you have taken the money out, the interest can no longer be earned and even if the government wants you to earn the interest, they should be the one paying the interest, right?

Well, you are right. The basic principle works like this – if you decide to put your money into a bank, it is the bank that would pay you interest. And if you take your money out, the bank doesn’t pay anymore interest to you. Obviously, you don’t have to pay interest to the bank on money that is no longer there.

So, similarly, if we had taken our money out from CPF, the government stops paying interest to you.

But why is the PAP then making you pay “back” the 2.5% interest that they should be paying? Now, note this – what this means is that you are paying an interest of 2.5% on money that is no longer in the CPF. You are paying an interest into the CPF on nothing (Chart 12).

You have to fork out money from your own pockets to put into the CPF for the government.


Chart 12

Do you see it? The government makes you think that if you want to grow your retirement fund, you should put the money back.

  1. First, if you should put any money back, it should be because you have additional savings which you want to save and decide to put into the “bank”. It should not be to put interest back on money you don’t have or even own inside.
  2. Second, you should be the one who decides whether to put the money into the “bank” or not. It shouldn’t be a forced entrapment plan.
  3. Third, why did the government tie in the CPF interest rates to the HDB mortgage, when they are two separate things?

Remember this – (1) the government is making you pay “back” a redundant interest rate which in fact, they should be the ones paying you and (2) the government has concocted a plan to make you pay them what they term as “CPF interest that you have lost” when it’s simply a plan to make you pay them so that they can earn.

This is nothing but trickery.

The PAP Turns Your CPF Into Their Bank To Lend Money To You On Interest

But here’s another way to look at it.

By asking you to “return” the 2.5% interest, the government is effectively saying that the money inside the CPF is money they are lending to you to pay for your mortgage, which is why they had then made you pay an interest on it. What this means is that they had taken over your CPF and made themselves the moneylenders of your CPF. Effectively, they have taken over your CPF, act as if they own it and decide that if you want to take your CPF money to use, they get to decide on the terms they want to lend the money to you – but money which is yours in the first place (Chart 13).


Chart 13

But why do you have to “borrow” money from yourself and pay “interest” to yourself on money that is yours in the first place? If I have a dollar in my piggy bank, when I take the dollar out to use, do I need to keep paying an interest for everyday I do not put the dollar back? I get to decide what I want to do with the piggy bank, don’t I? I get to decide when I want to put the dollar back, interest or no interest.

Thus who gave the PAP the mandate turn our CPF into their bank and act as if the money inside is theirs, which they can set an interest on and earn from us? Let’s be very clear – we are using our own money to pay for the HDB flat, not some non-existent money.

And if indeed an interest needs to be charged, isn’t there already a 2.6% interest that we are already paying on the mortgage? Why are we made to pay an additional 2.5%? What the PAP is doing is this – they are making us pay a 2.6% interest to their HDB bank and then make us pay another 2.5% interest to their CPF bank! What this means is that we are actually paying at least a 5.1% interest, which is a very high interest rate (Chart 14)!


Chart 14

Where on earth do you get a bank(s) that is so corrupted beyond its means that it doesn’t even tell you the truth of where your money is going but keeps you in the dark until the truth hits you when it is too late, and you’ve lost much of your money?

Do you see what is happening here?

  1. When it is convenient, the PAP will tell you that the CPF is your money and you own it. But when they feel like it, the PAP says that the CPF is their money – they get to invest it anyway they like it, and they get to turn your CPF into their bank and decide to lend you on added interest, as and how they like it.
  2. The CPF then double-charges interest on the CPF you withdraw for the mortgage, by first charging an interest on the mortgage and then charging an interest on the CPF withdrawn for the mortgage (Chart 15).


Chart 15

Meanwhile, who keeps losing money and who keeps earning money for free? Do they need to do anything to earn you money? They don’t – all these money that they extract from you is now automatic.

But do you know why the PAP does this? They have already made you pay such a massive chunk of your wages into the CPF – all this money is precious money that they want to use for their own investments. If you are allowed to take it out, it means money that they have to lose, which they cannot use. So they have to find ways to extract more out from your CPF, to give to themselves, rather than to you.

You Are Actually Paying More Than 2 Times The Value Of Your Flat

Then, you might think – fine, no choice what. The government wants to do what, we also cannot speak out, so let them do lor.

It’s only a 2.5% accrued interest right? Suck thumb lor.

Here’s how much 2.5% is.

First, do you remember the 15% downpayment of $45,000 that you had used your CPF to pay? Yes, you have to pay a 2.5% accrued interest on this as well. Do you know how much the 2.5% CPF accrued interest that you have to pay back is? By the end of 30 years, it is $47,812.

Yes, no kidding. The CPF accrued interest that you have to pay back is more than the downpayment that you had paid (Chart 16).


Chart 16

Getting scared?

Next, you had taken a mortgage of $345,960 from CPF for 30 years to pay for your flat right? Here’s how much CPF accrued interest you have to pay back – a whooping $172,983 in CPF accrued interest, or half the mortgage (Chart 17)!


Chart 17

In total, you would need to pay a total CPF accrued interest of $220,795 (CPF accrued interest on downpayment of $47,812 and accrued interest on mortgage of $172,983) (Chart 18)!


Chart 18

Now, note that the CPF accrued interest I’ve shown you so far is only at the 30-years mark. But do you know that as long as you do not pay this CPF accrued interest back to the CPF, this accrued interest just keeps growing

So it doesn’t stop there.

Most people never know about this CPF accrued interest, so they wouldn’t have paid “back” this accrued interest and so, this CPF accrued interest would keep growing. In fact, you most likely would only see any mention of this “accrued interest” on the CPF website which informs you of what you need to pay back when you sell your house.

If the accrued interest keeps growing until the 40 year mark, it would have grown to $396,339, or more than the stated value of the flat of $300,000!

And after 50 years, it would have grown to $621,051, or more than twice the stated value of the flat (Chart 19)! Now do you know why most Singaporeans would never be able to retire?


Chart 19

Let me give you a bit of perspective. Initially, you had thought that together with the mortgage, you are only paying $405,960 for the flat right? But when you add in the CPF accrued interest of $220,795 at the 30 year point, the total amount that you are actually paying for your $300,000 flat would be $626,755.

So, after the 30 year point, your mortgage would have ended but you still have to continue to pay because the CPF accrued interest keeps increasing and increasing non-stop! After 50 years, your $300,000 flat would cost $1,027,011 (Chart 20)!

The “mortgage” never ends! The PAP has devised an insidious scheme to make you keep paying (without you knowing) so that your CPF keeps dwindling (for their use).


Chart 20

Get this – this is a $300,000 flat and how much are you paying? You are actually paying more than twice that amount – or $626,755 for that flat (Chart 21).


Chart 21

And if you never pay this interest back since you wouldn’t know about it anyway, at 40 years, you flat would have cost you $802,299 and at 50 years, the flat would have cost you more than $1 million – or more than 3 times how much the flat is said to cost (Chart 22).


Chart 22

By now, there should be a lot of question marks above your head now. Most people do not know about this CPF accrued interest that they have to “pay back” until they have to sell their flat. Only then will they be informed about this and only then will they get the shock of their lives.

I bought a flat for $300,000 and I have to pay more than $600,000 for it after 30 years?? And a million after 50 years??? I could have bought a high-end condominium!

Mind-blowing? Not even there yet.

Paying $600,000 For A Flat For Nothing, Literally

Now, when we buy a flat, what we would think is that after I finish paying for my mortgage after 30 years, I would be debt free and I would be able to start saving for my retirement, right?

In fact, that’s what a mortgage should mean, shouldn’t it? You finish paying and then, that’s it. In fact, you own your home now! That’s what the PAP has been selling to us all this while. This is our home!

So, as if it’s not bad enough that you are actually double-paying for your home, it was recently revealed via a question by the Worker’s Party Gerald Giam that your flat will have zero value at the end of its lease.

Can someone please explain to me why we have to pay $600,000 (after 30 years) on a $300,000 for a flat that has absolutely no value at the end of its lease? Then what the hell are we even paying for? So, your flat is supposed to increase in value but after the end of the lease, this value suddenly disappears (Chart 23)?


Chart 23

What kind of home are we buying to stay for the rest of our lives, and for our children, if it has absolutely no worth? Then why are we even buying the flat??

Why are we dumping all that money into something which is worthless? Why are we spending $1 million for literally nothing?

The PAP Tricks Singaporeans Into Paying Interest For Their Own Use

By now, if this hasn’t shocked you or infuriated you, I don’t know what will.

First, now you know that you have to pay this mysterious 2.5% accrued interest on the mortgage you take out from the CPF.

Then next, you find out that this mysterious 2.5% will actually amount to more than $200,000 after 30 years and more than $600,000 after 50 years – no small amount! $600,000 would have allowed you to retire very comfortably! $600,000 that you are dumping because no one told you anything about this!

Third, you then find out that this mysterious 2.5% will actually make your flat cost more than $600,000, or more than twice the stated value of $300,000 (Chart 24).


Chart 24

And as we have explained, there is absolutely no need for you to pay this 2.5% “accrued” interest at all because you would be paying this interest on nothing – there’s no money to pay this interest on. In fact, it’s only a trickery that the PAP has concocted to make you give them money for free.

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      • enrico

        (1) Play the words game. CPF money is your own money.Aim of CPF money is for your retired money. Therefore you make use the CPF money to invest a house. When you sell the house, You need to return the capital +2.5% interest to your CPF a/c for your retired .(If you take out money to buy a house after 55 years old, when you sell the house ,you do not return back the money .so it is a time game to misguide people)
        (2) A very strong’s political view . cannot give people a correct knowledge.
        (3) That 20% employer rate is not your salary .It is the rule to make the employer pay for your CPF A/C .Without the rule ,do you think employer will add this 20% money into your salary, a dream only.
        (4) High interest is not safe to the capital. From news a lot of oversea pension fund invest into dangerous business ,their capital + interest cannot get back, Then the old folks get suffer.
        (5) Actually only you have cash full pay the house, then the capital is small . If you loan from bank to buy a house ,after 30 years the capital + interest is very big but the value of the house also increase. Therefore we cannot want the house just the capital only but you enjoy the value of the house increase.
        (6) I am an old folk, I shift my saving into my CPF a/c.Take CPF as a safety bank + earn 2.5% interest ( bank less than 1%) and 100% capital safe (Do not forget the finacial crisis in the world) .As i can withdraw any amount of money at any time.
        (7) The fact is CPF to make Singaporean has a house. Do you compare the rest of the world.

    • Agent888

      Yep looks like another biased anti-government post alright.

      A bit of half-truths, some facts and clever use of statistics. By the author’s reasoning, we should have a nation of bankrupts by now.

  1. Jon

    Actually the effective interest rate is much higher.
    CPF – HDB example:
    2.5% (Lost interest from CPF paid by the board) + 2.6%(HDB mortgage interest rate) + 2.5% (accrued interest upon selling the flat and returning the cash back to CPF) = 7.6%

    Personal Financing assumes you do not take a loan to finance it:
    1% (Lost interest assuming that you invest this cash in time deposit otherwise a saving account interest is much lower) + 4.88%(DBS home Loan) = 5.88%

    There is no payback upon sale for the personal financing as it is purely your money. Of course, there will be people arguing that you could have used the personal cash to invest and yield x% returns. Seriously, how many Singaporeans actually set aside cash monthly towards their retirement planning? If you do great. But are you able to do investments with a high enough returns to mitigate the effective rate using the CPF route? I’m pretty sure the financial management advisers in today’s economic environment cannot guarantee the investment returns.

    • enrico

      2.5% (Lost interest from CPF paid by the board) + 2.6%(HDB mortgage interest rate) + 2.5% (accrued interest upon selling the flat and returning the cash back to CPF) = 7.6%
      (1) 2.5% (Lost interest from CPF paid by the board)—–without money ,how can you get 2.5%? I hope you are a banker .I will put in my money into your bank then withdraw the money out. Then I can enjoy your 2.5% interest forever. Thank you.
      (2) 2.6%(HDB mortgage interest rate) — Hope you are a banker then I will buy few houses then mortgage into your bank to enjoy no any mortgage interest rate.
      (3) 2.5% (accrued interest upon selling the flat and returning the cash back to CPF) — Hope you a banker then i borrow money from your bank ,when i return back money without any interest.
      Note : CPF money is for retired time money. Therefore now (younger time) you borrow money from your retired time money ,You need to get some of profit to pay interest when you selling the house. When you old time all the CPF a/c money are belong to you for your retired life. This the aim of CPF.

      • Angez

        In my very honest opinion, Jon was taking a very, very neutral stand. He was just stating the facts. He wasn’t taking sides. Why are you so defensive? Lest you jump to conclusions, I’m also neutral. Neither for the writer nor for the governing party.

        1) Yes, lost 2.5% interest that’s by the board. That’s fair, because no money, why should I gain the interest?
        2) 2.6% mortgage interest…i’m loaning money, this is the rate they set, fair enough, still gotta pay.
        3) This is the part that lost me…….. well, i’m sure the CPF is money deposited from my wages every month 🙂 and since you claimed that it is “borrow money from your bank, when i return back money without any interest”…i would love to be your bank. You can do a monthly deposit with me and also claim that the money belongs to the bank, and using the money (which belongs to you), is “borrowing”. Apparently the ‘loan’ with %interest is already addressed in your 2nd point. Your argument is so skewed and flawed and unjust. Yes, “Note: CPF money is for retired time money.” Heh… Sure, i know. That’s why i lost out when i decided to use my CPF to aid with my purchase for house, do i not? And let’s say if i don’t earn enough, then yes, i gotta work for longer/source a higher income to meet the MS. That’s only fair, since this is the law, but i still do not see how imposing the “Accrued Interest” is oh-so-reasonable and the right thing to do.

    • ianni

      @ enrico..
      the fact that we pay a few hundred thousands for a house which technically is not yours(last 99 years, restricted rules applies, low rental yield etc) just took your comments and dumped it down the toilet bowl.

  2. Fuad

    Why do i need to “donate” $1? Your article is good but when I see about the $1 thing … I m turned off. 1 person $1 …. 1 million people will make u a millionaire. Please do it from yr heart not for yr pocket.

    • Roy Ngerng

      Hello, the $1 is for people who would like to attend and who would like to donate – to help cover the costs for the event.

      Otherwise, we’ve been paying from our pockets. We are willing to do so as long as we can continue to advocate for a better Singapore.

      It’s not a must. Please do not feel obliged.

      More importantly, like you say, it should be from the heart. Money is secondary.

      The reason why I’m willing to write and critique the PAP is because I believe in doing what’s right.

      Just keep sharing. Doesn’t matter the money. As long as Singaporeans are aware, we will be able to do what’s right for ourselves, our children and their children.

      For the future of Singapore.

      • AxE Law

        We need people like Justice Bao to help Roy to raise fund to fight the case about this defamation

  3. Low SK

    Dear Roy,

    Just a friendly observation…

    I notice that in every of your articles whenever you are talking about money that is taxed or earned from the people, you always say that it goes to the PAP. Although the PAP is the political party that forms the government, it does not deserve any cent of the people’s money or any money from taxes or interest on public funds or money howsoever earned from the public. In my view, making such assertion may show that your sole motive for all these write-ups is political.

    If there is any evidence of misappropriation of funds which are supposed to go into revenues or the reserves by anybody or any entity, and whoever is aware of such instances, he or she ought to blow the whistle so that it can be investigated. No matter how dominant the PAP is, I believe there are upright and honest Singaporeans in our civil service and in the country who would not tolerate any corrupt regime. In fact, if there is any evidence of impropriety, you can always pass it on to the opposition MPs for them to follow up.

    As far as money from taxes and any public money that is legally and purposely designed and accumulated by the government to continuously build up the reserves, there is really nothing that citizens can do since 60% had voted for them. This is not to say that whatever you have written and the issues that you have raised in your articles are irrelevant and not important. On the contrary, I must say that all your articles are very enlightening and insightful.

    Aside from what you have highlighted in your articles, I think many people would also be interested about transparency and accountability as regards the huge sums that go into revenues as well as those that are accumulated and invested in the reserves. Some write-ups on these would be welcome.

    The public has a right to know.

    Low SK

    • Donny Yam

      Dear Low SK, you are indeed correct if Singapore was a true democracy, but Singapore is a pseudo democracy. On the surface, Singapore seems like a democracy with elections and all. But have you noticed that whenever the PAP loses a vote count in an important constituency, they demand for a recount and then, miraculously, come out the winner? If I am right, the PAP cannot and will never lose the governance no matter what–measures are in place. See here ( or Google “Robert Ho”. The Singapore pseudo democracy is meant to fool the international democracies because Singapore cannot survive without them. There is no way an opposition party can conduct any investigation when even the president elect cannot get through to the opaque walls of the PAP. There is only one way, and it’s ugly.

    • simon liew

      Hey Low, when even the CPIB ast director got charged for corruption, who would want to take the chance? And you have to be aware that CPIB reports directly to the PM.

  4. pissed off

    quite misleading article, i didnt bother to read the whole article but i read until the part where roy say the accrued CPF.
    let me put in a very logical way.

    1) your country want you to be paying your own retirement hence come out with CPF which lock a portion of your $$ in it.
    2) this CPF pays you 2.5% interests rate when there is $$ in it.
    3) CPF also let you pull out your OA fund to pay mortgage but here is the catch.
    3 i) when you pull out the fund from CPF, its empty. so by your retiring age, who feed you?
    3 ii) gov set up CPF to? make you pay your own retire mah.. so by asking you to pay back the 2.5% is too much or wrong?

    for those still dont get it, i put in another very simple logic lah… if you really cannot get it hor.. you really cant be helped(IM SORRY but you are really daft)..

    i will use parent as GOV, car as CPF for this illustration.

    your parent ask you to save some money monthly for your retirement x%.
    then when you decide you want to buy a car, you use the money from this saving fund and depleted it
    to make sure you get to retire comfortably, you have to put x% back to the saving + the $ you have to pay for your car monthly.
    so now you need to pay both car and x% to make sure you retire properly.

    in another words, you dont ask your parent for $ for retirement when you decide to buy car. its your choice not their’s.
    this is what the gov wants from us. there is nothing wrong here.

    the writer abit like want gov to foot bill for him. or simply put, he stirring shit and want gov to feed him when he old age.
    spoilt brat.

    god gave us a brain to think, not to get misleaded without thinking.
    i worry about singapore if oppositions quality are like him as shallow without thinking far ahead.
    i voted for opposition for 2 GE, PLEASE DONT MAKE ME VOTE PAP.. -.-

    • Kenny

      I also have some simple questions for you:
      1) Which part of Roy’s calculation is technically incorrect? If none, then he is technically correct, right?
      2) So you save for your own retirement according to your parents instruction, fine. What happen to their money when they die? Bury it with them? Pass on to you to beef up your retirement? Or end up in some invisible reserve bank that nobody have any idea where it has gone to? Or split among your uncles and aunties with nothing for you and your siblings because your parents insist you live on your own means?

      If you cannot answer this simple question, then your analogy is flawed.

      • Wee Kee

        Pissed off is correct. To answer your 2 pts:
        (1) The calculations contain a fair bit of guesswork which I’d give the benefit of doubt. However equating the CPF as a bank is wrong. It is a self funded welfare system tagged to each individual having worked here. So the association is wrong to begin with.
        (2) you do get the money back, as long as the country honours it. Fortunately this country doesn’t die, unless of course we are invaded then all bets are off.
        CPF is a tough scheme to manage. Ask people to contribute more so adequate for retirement, and people complain. Ask for less and people complain not enough for retirement. It has it’s flaws, but it’s an overall decent scheme.

      • piggypigs

        he double calculated .. and the part that need to pay for mortgage loan is not the same as the portion of the money that need to be repaid to CPF. So the citizen did NOT have to pay for BOTH mortgage AND the CPF interest rate for the SAME sum of money.

        And this is just one of the logical error that he has made in his article.

      • Angez

        piggypigs, do not mislead people by saying that it’s the same. go read up more before making a baseless comment.

        “So the citizen did NOT have to pay for BOTH mortgage AND the CPF interest rate for the SAME sum of money.

        And this is just one of the LOGICAL error he has made in his article.”

    • Donny Yam

      By controlling the housing prices, the Govt controls everything and can manipulate the people very easily. The Govt is the monopoly so everything is controlled by them. You wouldn’t need to use your retirement fund if the housing is truly affordable. This is a Govt manipulation to put Singaporeans always in debt. When you are in debt, you are at the creditor’s mercy and that’s how the Govt likes it. OPEN YOUR EYES. The Singapore system is made to put Singaporeans always in debt and always at the Govt’s mercy.

  5. archampion

    Have you thought of telling all this to the gahment? or any minister?
    How this event gonna work? inviting ministers down?
    I wonder if you’re trying to scam $1 from people. Sorry, no offense. Is just weird to donate $1 for the event.

    • Roy Ngerng

      Hello, I challenge the government to come out with the full information and statistics and lay out the full information about the CPF.

      Read this – I challenge the government to do it.

      Will they do it? They risk their whole Ponzi scheme falling apart. They risk not having their natural source of wealth accumulation source for themselves collapse. No way would they do it.

      Don’t tell me this. Send this article to them.

      The PAP reads the blog. They’ve tried to reduce the credibility of this blog several times.

      If they want to release the facts and information, they would. They wouldn’t get trolls to discredit this blog.

      Allowing trolls to discredit this blog is easier than releasing the full information and facts.

      Or do they think it’s not in the interests of Singaporeans, as they’ve said before, to let Singaporeans know in full what is actually happening to our CPF?

      • Lameshit

        So everyone who disagrees with you is a troll sent by PAP to discredit you? Are you that deluded? Have you ever considered that perhaps your article IS shit? -__-

      • vomous

        It is easy to discredit and say challenge here and there. So given these research u had done, what is the proposal to make it better? How do u think singaporeans will fare without CPF? Now I challenge you to provide a good proposal and submit to the govt, with credentials from banks and experts from financial industry. If you can do that, it will support ur theory.

        The point is if you felt its a good point, make it better. If you felt the govt is bad, Say how could you make it better..people complain all the time and never put in effort to make it better. Think holistically n think how to implement without bankrupting sg n next gen. Dont rely on govt to make all decisions. Its a lazy and irresponible way. do it youself n stop being a complainer

        Since you are willing to do all these stuff, make a good proposal and get it validated by experts. You will have more support if you do that. Be objective and not rely on feelings.

      • Javert

        I think they don’t want to grace your blog with an actual reply. That’d give this fallacious article undue publicity.

      • Born to Serve

        I believe the prosperity, stability and progress of our country in less than 50 years tells it all. It is no simple feat that we are where we are today. It is a miracle. We ought to give honor in all respect when honor is due. Roy Ngerng, I would appreciate that you will just keep to yourself all these childish talks and distorted arguments. Please do not mislead people. Be a true man. Make a difference and stop complaining.

      • Donny Yam

        It is sad to see so many Singaporeans in denial. Roy is trying to open your eyes to the truth and all you can do is discredit him. It is common for citizens who feel mentally comfortable to fear the truth, which can lead to rethink and bursting the false security bubble. Rethinking is scary, I know, but do you really want your children to live a lie as well?

  6. Disappointed

    Oh dear, it is disappointing! There are many fallacies in the arguments… Takes too long to comment here. PM me if any cares. Does the young squander away time thinking wayward? Get the facts right, article is too EMO.

    • Daniel

      Hi Disappointed

      Since there are so many fallacies in the arguments as you claimed, would you mind listing them briefly in point? Else, it’s as if you said nothing.

  7. jon

    LOL by reading the comments, i just realised alot of Singaporeans are so ignorant and fucking pussy-ed when someone gives an alternate perspective on an issue SO important. True or not, I think you all should do your own homework become coming here and flame someone who has used his time to try and show you an alternate perspective. He can be like you other pussy cats and just keep your hands in your pocket but he took a risk. Before you mindless fucks thinks he is a prick for sharing, look at the mirror and ask what have you done other than live a small & pitiful life.

    • Whatsfair

      Whatever you have commented here, that’s what I’m thinking too, the author gave us all an alternate perspective. You guys worked hard, but just how many of you, truly shown concern about how our CPF works? The author may be wrong may be right, that’s fine, we are suppose to be free to debate, I think I need to remind some of you guys that personal attacks are unnecessary. Let’s just speak up our mind, and have a more open heart in putting things into perspective.

      • Old folk

        That’s a fair comment. I think Roy has written something that is fundamentally wrong with our system. But because the system is so complicated, it is very hard for a normal person to have a clear mind and sit down think about it. And it is all too easy to pick bones with what Roy had written due to the complexity of the system. Many people just close one eye. The old folks always say, “just trust the gahmen”. We are too ignorant to think for ourselves and too stupid to use our vote.

    • dee

      I TOTALLY agree with Jon.

      Looking at the comments slamming Roy, it looks like PAP’s getting the votes again for the next election. If you guys wanna be ‘loyal’ dogs to the government, you be dogs yourselves. Why criticize what you don’t understand (in this case, Roy and his opinions)? There are still people who want to be treated how they’re born, as humans. “Just trust the gahment”? Even animals know self defense.

      • Vote changed.

        YES! I used to vote for opposition but the past two years gave me a bitter taste of how would be if opposition would win the next GE. Definitively my next vote goes for PAP. I trust them now more then ever. They are and will do it right!

  8. tvogkcuf

    Well said bro. Why we need to thank the govt when we are ‘borrowing’ our own money ? still need to say thank you and pay interest ? Govt is just legal loansharks in a sense.

  9. Benjamin

    So many comments that i stopped reading.

    My comments on this article is based on my neutral political stance.
    I think the article has really instilled a very hateful sentiment on the Government (aka PAP) and its associations (namely CPF). I suppose it becomes more obvious from the rest of the postings which i shall not dwell in.
    Many have come up with argumentative comments which displays logic and emotions and I cannot disagree on most of them.

    I do have one simple question: Can anyone of you come up with a better scheme to run the country?

    We are a small nation. We do not have any natural resources. We were a trading hub where our ancestors were working as coolies, manual labourers, traders, servants and our neighbours were not much help at all. We depended on ourselves to build this country to what it is – an economic powerhouse, an ASEAN leader, global recognition. 20 years ago Americans were still thinking Singapore is in China.

    How did we achieve this? Or to to put it into a business perspective, how do you make money if you have nothing to sell?
    CPF is the answer. Partly. We do have the one of the highest, if not the highest contribution in the world. And this is the reason why we have one of the highest public debt, money owed to the people. The means in which CPF works ensures that 1) We have money for retirement, 2) Singapore has money to invest
    1) Money for Retirement
    This is something which most of us can agree on. The only gripe of it being its inflexibility and the amount that can be withdrawn. The reasons for it will go into point 2. Suffice to say the Government has indeed laid out a very basic retirement plan such that we should have money to support ourselves when we reach that age where we will be retired whether we like it or not. Singapore will not allow contributors to be living on the streets, or not have any money to do some basic”living”. It is afterall illegal to be begging in Singapore. Hence the CPF forms this “protection” such that all contributors should be able to have 3 simple meals a day and not be sleeping without a roof.
    2) This basically answers the question on how you make money without anything to sell. Being a country without any resources, we have managed to successfully become what we are by using this public debt to invest and make money grow. It is a brilliant idea but not without its own problems: namely the anger and sentiments many of us have written on the problems here. CPF requires you to pay back or be able to keep a minimum sum so that the investment groups can estimate a guaranteed sum of money for investments and returns. Imagine if a group of 65yo being able to withdraw the entire sum in their CPF in a single day – that would easily amount to S$50M. An amount the banks would likely not have in cash and neither does the CPF.

    Sure you would question that it is my money and i should be able to do what i want with it. Totally valid.
    The problem will not arise until probably 1-2 generations. Singapore may not be the economic powerhouse. What does that mean?
    Jobs, education, living standards.

    To be very brief, the Government will need your money to help the country to help you.
    We have become disillusioned recently because many of us have not come out of the racial riots where other countries were causing disharmony in our society – an apparent measure to disrupt our economic plans. We have not experienced terrorism like the bombing of MacDonald House. We have become so used to the privilege and luxuries of this country that we take things for granted.
    Sure the train is always late. But would you have wanted to ride a bicycle instead? Sure the foreigners are taking the jobs but would you have settled for less pay and work longer hours?
    There are many ‘unseens’ that are happening in Singapore and the public may never get to know about how our People are working and striving to make Singapore a better place. To make it what it is in less than a lifetime.
    Never ever take Singapore for granted.
    You may not like the Government, but you must love Singapore as a country.
    And my question still stands: Can anyone of you come up with a better scheme to run the country?

    • Daniel

      Hi Benjamin

      My answer to your question is, anyone of us could come up with a better scheme to run the country as long as we have the right minds and tools to do so.

      No doubt we must trust our fellow men to love Singapore as a country. I think the issue that Roy raises up is the quality of stewardship.

      1. Regarding Money for Retirement
      I think Roy’s article has not discounted the fact that CPF do provide its members the money for their retirement. However, under the context of protection against vagrancy, where is the limit to excesses that a mandatory and inflexible system brings and who has the rights to decide the limits?

      2.Regarding Money for Investment
      I agree with you that investment for public goods need public funds. However, should CPF be considered a public fund since it is meant for retirement, as per your first point? This poses moral issues on 2 fronts. On the good-times front, how are retirement funds fairly compensated for the risks it took by participating in a no-opt-out investment scheme? On the bad-times front, how are retirement funds protected from the same risks? If public goods need to be invested in, shouldn’t the contribution and the associated risks be properly accounted for in other methods such as, taxation or ministry pool, rather than masking the funds through multiple channels or entities?

      To be very brief, good governance requires good results and good accountability. We are often sold on the results, but how about the accountability? Without accountability, there is a real risk of abuse and exploitation of others, at the expense of achieving the results. I think that was the point of Roy’s articles.

      I’m not too sure why the topic of racial riots, terrorism and violence was raised in your comment but I guess you wanted to convey the dangers of being conceited. I struggle to see how being questioning the management of the CPF system is being conceited and will eventually lead to violence in our society.

      On your point of the train is often late and the foreigners suppressing wages and lengthening work hours, I guess you wanted to convey that the current alternative is the best alternative. I also have reservations on that view because we are supposedly living in a democratic state so how can we have only 1 option for approx. 5.3 million people?

      Finally, I agree that there are many “unseens” that are happening in SIngapore and the public may never get to know about how our People are working and striving to make Singapore a better place. I assume “People” refers to our people in the civil service since the public is, the rest of us. However, at what cost we are paying to get the results and close the other eye on the excesses that can and might have been in place?


    • Josh

      Benjamin. I must first clarify that I’m a undergrad at the moment who have yet to start work full time.

      U claim that no local will be willing to take up low paying jobs. However I beg to differ. Its not that locals are not willing to take up low paying jobs. But think of it. We have to contribute to cpf, repay our education loan, and not forgetting our family and also to save up for our future with the cost of everything going up. With so many things that require money, and mind u, those ain’t small sums either, how are we, locals going to survive with low paying jobs. Foreigners on the other hand do not have such financial worries and burden to begin with. That’s why they are more open to taking a low paying job.

      Besides, I am pretty sure that most locals ain’t complaining about those foreigners who came to do the dirty jobs. It is more of the “expats” who commands a huge pay cheque every month without contributing back to our society that locals are complaining about. And some of them even think that they are superior to us. Of cos it would be unfair to say all but I personally have encountered before foreigners who came to our homeland and despise us, the locals of this land.

      That being said, if u think that we, the younger generation of singapore is complaining too much, wait till u have children of your own and watch how they will survive with everything firmly stacked against them.

      • Benjamin

        Hi Undergrad Josh. Thanks for clarifying you’re any undergrad at the moment. I would like to expand more to explain how the below comments ties up but its kinda late and i still have work to do.
        First off, read my sentence very carefully. I have in no way said that no locals are willing to take up low paying jobs. Also if you understand the dynamics of CPF, then you would not have said about the many things you worry about paying if you have a low paying job. But i do question how you think the foreigners does not have such financial worries and burdens when they are working, living and eating in Singapore. Or do you suppose they import food from India or China?
        What i do agree with you are the expats that get paid shitloads without contributing much back into society. These are scums. Not all expats, but there are those scums. And until you have come into a position on hiring people like these, i would suggest you study hard and work hard so that you can send them back to their countries and start putting capable Singaporeans to replace them.
        Just to share how an ordinary Singaporean i am: I grew up with 2 siblings where my father is the sole breadwinner and we used to live in a 1 bedroom HDB in ABC. That is bukit merah in case you’re wondering. My mum tried to do some odd jobs every now and then to save some additional money to put us through tuition. We had little money for recess in school. So much so that i would skip lunch because i worry if i have money for tomorrow. That was us, in Primary School. In fact i started stealing things from my friends because we couldnt afford stuff. I regretted this action thoroughly so and the guilt resides in me. We later moved to a 3 bedroom HDB but my father was still the sole breadwinner and my mum continue to do whatever jobs she can do to supplement our growing requirements. My father was retrenched twice but i did not know about this until much later as they were doing everything to bring the family up without us worrying. We managed to move into a 5 room HDB by the time i was starting tertiary.
        Now, i have a family of my own (2 kids), living in a prime condo, and have 2 cars. And i am only 35 this year. My condo and cars did not come from my parents nor did they lend a single cent to me. This is my story in a short paragraph. Do you think we have come far? I think so. Did we depend on the government? Yes and No.
        Do you think i worry about my children? Everyday. I worry that things will be costlier, homes will be more expensive, and everything will be more stressful when they are starting to look for work. But i always look back at how much my parents must have suffered to bring us up and i understand it myself as i am on this journey to provide the best for my children as well. That when you choose to be in Singapore, you must continue to be fighting everyday. When you choose to be in Singapore, you will be stressed everyday. When you choose to be in Singapore, you will be worried about money. Everyday. And as someone has rightfully pointed out, we may become a nation of slaves or drones. But it is up to every Singaporean to define and change that perspective.
        We should be fighting, worrying and stressed about living in Singapore because in doing so, we strive to be better – better than the Hong Konger whose only alliance is money-driven, better than the China chinese who are talented and hardworking, better than the India indians who can sell promising ideas. We must be better than them in order to take back what is rightfully ours. We must be better than them so that Singapore can still be recognised as a country of efficient and hardworking people. Better than them so that we can still call Singapore our home. And if i were to leave Singapore because i think everything is firmly stacked against me or my children, then i would be no better than those expat scums who contributes nothing to our country and society. I love my country and i will stay to fight and contribute however i can.
        How does my story relate: i fought everyday to be what i am today. I was fighting when you were sleeping, playing mahjong, out drinking with friends, playing games, watching movies, etc. I fight. If i can leave a message for an impressionable mind like yours: carry the fight as our forefathers had before us.

    • Justice Bao

      Better scheme to run the country?

      Get all the PRCs out of this country.

      And their funding for free educations every singapore son future.

      • Jason

        Hey Benjamin,

        I like your life story. I came from a poor background myself. Got my ass into local university and I’m working harder everyday. To me, the idea of welfare and socialist ideals are something that I cannot support. I find that we as a country, need to keep on fighting, keep on working hard, to improve ourselves and be better, or else we will lose our prosperity and our place in this world.Something I realise about people in general is that they like to blame everyone else for their own failures. Without looking at themselves first. That’s why people tend to hate on the government. They don’t become successful, can’t afford a car or a nice condo, but instead of blaming on their own lack of hard work and lack of good education, they tend to blame everyone else first. I wake up everyday knowing what I need to do and fighting hard for what I want, not just waiting for someone to hand me a condo and a car. If I want those luxuries, I will have to fight for it. Keep fighting bro.

      • Sgcynic

        We fight. We don’t depend on others. We absolutely hate it when people put unnecessary stumbling blocks in our paths, make life harder while claiming credit for helping. Cut the wayang.

      • Justice Bao

        Benjamin story just show how we can be independent. Likewise many other singaporeans are well capable to be self-dependent.

        Fight for our rights and how we should control our hard earned money. Abolish CPF scheme.

    • Born to Serve

      I truly appreciate your story and your perspective Ben. Keep fighting on. I share almost the same story as you bro.

    • Donny Yam

      I’m pretty sure the PAP had a long time to fumble through and come up with a system that works for them, and maybe, accepted by the mass. But for you, Benjamin, to ask a non elected, thus not paid, person to come up with a political or any system singlehandedly and at his own expense is unrealistic. I’m very sure the PAP team has many paid think-tanks working round the clock thinking of ways to collect money from the people and make it seem necessary; if you open your eyes you will realise that we pay for everything, and I mean everything! The govt is so creative at making money from the people. It amazes me.

      So, elect an opposition and give them many years to better the Singapore system to benefit the PEOPLE, and not the government. Many years are required for a change to happen, not days or weeks. And don’t expect it for free either.

  10. Pingback: [VERY SERIOUS] Question about using CPF to pay hdb - Page 8 -
  11. Anonymous

    Hi Roy,

    Is it possible for you to post the breakdown of this “2.5% accrued interest” that you keep mentioning. It would be good if you can clearly define if this accrued interest is by month, or year. Define if the mortgage payment is by month, or year.

    I’m not sure if I’m calculating incorrectly or not, but taking your example downpayment of 45,000. A $961 yearly payment results in a figure that will never be paid off. If I use $961 as a monthly payment, the 45,000 would be paid off in 3 to 4 years.

    And I find it interesting that even though the downpayment is 45,000, the accrued interest is 47,000. While the 300,000 dollar flat, only accrues an interest of 174,000?

    I personally haven’t taken a look at the CPF percentage breakdowns in terms of interest given to us, or the interest we have to pay back, and have no idea about them. So it would be great if you can email me on how you arrive at the figures.

    • stranger

      45000 is a downpayment -> From CPF to HDB -> this is not mortgage loan, hence people never thought of returning, nor it is a requirement to return. But CPF actually charges interest.

      mortgage payment is the remaining money after 20%, which u borrowed from HDB mortgage or bank loan. -> From CPF to bank loan to HDB -> And this is where the monthly mortgage payment comes in.

      ” If I use $961 as a monthly payment, the 45,000 would be paid off in 3 to 4 years.” This is flawed, as it is not part of morgage loan to begin with.

      kthxbye ~ files off

  12. SM

    I’m just surprised that people think that they OWN their HDB flats. All you are buying is the the right to occupy the flat for a maximum of 99 years. If you check your agreement with HDB, it states very clearly that you are a “lessee”, albeit a long term one. And the reason your flat is worth $0 at the end of 99 years is that the lease has run out. Works the same way if you buy leasehold private property.

    • Jason

      No flat will actually reach the 99-year mark. They will simply SERS after 40-50 years and give you a new flat on a new lease.

  13. Discerned

    Agree with most facts presented.

    But see a potential misleading point.
    Care to explain chart 42, where the net withdrawal of 15 billion (for a single year) were compared against the entire account balance of 253 billion. 253 billion is assumed as the total accumulative amount, while 15 billion is the amount withdrawn for a single year.

    5.9% withdrawal for a given year against the entire CPF balance seems pretty good compared, I would be worried if a withdrawal (of the entire CPF balance) in a single year took out more.

    Would it be more appropriate to compare against the contribution for a single year instead, which stands at 28.6 billion, or about 2 times the withdrawal amount. If so, the percentage of (withdrawal / contribution) would be at 52.5% instead – this % is set to increase along with the aging population which means people hitting retirement and more withdrawals made. To put that into perspective, compare to the USA’s total social security (withdrawal / contribution) at 98.8% which is predicted to run into deficit in the next decade; I say we are at a healthy level.

    Other than that, I have no further arguments. Thank you for the article and breaking down the CPF accrued interest.


  14. king

    Refer to chart 14.
    seems like our what has seriously failed here is the ability to count. Just take any number on hand and add them together to get an inflated number. Then use this 5.1% in an argument. As long as this number fits the argument.
    If you borrow $x from ur cpf acc to pay the mortgage, you are no longer paying interest for that amount $x for ur mortgage. Ok, the way interest is calculated and principal amt of mortgage repaid is more complicated and this is not exactly correct. But the idea is there. if you really consider cpf $ as ur own $, you are actually saving 2.6% for every $ u use from your cpf acc. And if u consider opportunity cost, you still save 0.1%.

    No idea is a bad idea, but please do not try to hoodwink anyone because of your personal grudge.

  15. johnson

    Yeah, I think Roy has raised a very interesting point about the accrued interest rate which until now nobody had asked about it.
    This is compounded interest, which will snowball to a large amount eventually. After 30 years of using cpf to pay for a flat, imagine u have already accumulated a large amount of accrued interest(about the same amount u taken out) to be paid back to your cpf account.
    Let’s say u decide to live in your flat for 50 years & then downgrade for a retirement flat; By then, your accrued interest will be 3 times the original amount u taken out to buy your flat initially. 3 times $300,000 is $900,000!
    This means your resale flat prices must exceed $900,000 in order for you to pay back the accrued interest to your own cpf! Can anyone tell me is there a market for a $900,000 49 year lease flat? What happens if your 49 years old flat manages to sell at a price of only $400,000? Where u get the money to pay back the remaining $500,000?
    This is crazy! U don’t make money from your flat in the last 50 years & have to pay annual property tax some more, and now u need to pay back a compounded interest of $500,000 to your own cpf account!
    Commit suicide better lah! LOL

    • Angez

      Hi johnson, how is the accrued interest calculated? if let’s say we stay for 50 years and we used cash to pay for the flat instead of cpf.. does that mean the very same amount inside your cpf accumulating will increase to $900,000 through interest from cpf?!?! how to calculate compound interest ah? =x *fail maths*

  16. Nick

    No cpf half the nation will be homeless… Period… 🙂 another option be a self employed like me no need pay cpf 🙂

    • I'm an idiot. You are the smart ones

      Its ok Nick. These people here think that its better to rent their homes (like people do in HK, Tokyo, NY, UK…etc) from some landlord till eternity because they cant afford to “loan” their homes from the government for 99 years. Its also ok that they have to move every 1-2 years because the landlord decides to revise the rental rates blah blah blah. Its really ok

      • Mug

        Sure, you can buy a cheap house in Detroit but you might get mugged on your way home. Do yourself a favour and check out the houses in places that Singaporeans like to compares themselves with like.. a) Hong Kong, b) New York, c) San Francisco..

  17. S

    Well, i think the Q here is, who is responsible for the 2.5% interest pay on CPF OA?
    People will think why we need to pay for it as it is our CPF $; which currently GOV paying off the 2.5%.
    Any better analyst here?

  18. Isaac

    its weird that the comments, while browsing through, argues about if CPF is right or wrong. But from how I read the article. it seems not to mention if cpf is right or wrong, but that if taxing and profiting from cpf is right or wrong? i just browsed through cause it’s a little too long for me. so please don’t flame me.

  19. yoyo mark

    Refreshing perspective…there is sm truth in it.,,seriously sporean juz dnt hv their own mind.wen someone share smtg to make u think u criticize hm….if u think ur cpf is safety net..wake up…..inflation….and if the US dollar gone…let see how u scrambled…wat u tink the cpf is being used for…invest on wat…Us dollars? Wake uplah the money the paper money no value….smart ppl the gov is they invest on real stuff…so wen the financial crunch gotta ass it out to survive and the gov will juz say hey too bad…wl extend the retirement age and u work so u wl hv enuf in ur retirement fund. Most sporean r naive to only for As, condo, big job and etc…wen ppl said u being ripoed of u get defensive stupidly…seriously sporean mostly not intelligent….do u wan see 21st century slaves…come to spore… the land of 21st. Century slavery… and work like slaves..,,denied health coz bz earning money that is nvr enuf and wen to retire health gone money stl nt enuf…,,this is definitely 21st century slave.,,educate younsters to go to an institute of higher learning then called it investment..aft graduate, like slave report work morning till nite.,,cm bk hm sit in front reality whre gt time to think and questioned the running of country matters…so invite ur frienfs fm overseas to show them the new slavery nation…..we all r slaves mig smone else dreams come true whilst ourshide in a shadow…u work and work for others till u die..proud of it and then make smone rich but u die poor..make smone dream reality but urs gone with the ashes….so wake up…the more one is educated the more ignorant one bcomes coz that is wat precisely higher learning does…to ignore wat is really happening around u and get busy with making money…….u think u hvng gd life…well trust me time cmg soon tat million dollars smday will equate to zero….u dnt know coz u bn busy studying to get As so u cn hv fat chq..but sporean wl soon wake up from their lullaby…..

    • I'm an idiot. You are the smart ones

      Singaporeans are world class at complaining (me included) but really never stop to question enough. Roy’s articles are not inaccurate but they are certainly misleading. I’m not here to rant about 2.5% or accrued interest. I dare you to take a bank loan and tell me its cheaper than taking a CPF/HDB loan. I dont see people tearing and burning down banks. So don’t flame CPF for asking you to put back your money + interest. Your borrowing your own money. Be nice to yourself and pay yourself back.

      I’m here to question about the minimum sum. That is just plain stupid to me. To me, the minimum sum is designed to ensure that:
      1. No one withdraws all their money at once (funding problems with Temasek) and we all know how hard it is to unwind losing positions eh Ho Ching?
      2. No one spends all their CPF money at 55 in MBS and goes back to Ah Gong for hand outs. Now no one would do that now would they? I mean Singapore is the land of the smarts, the brilliants the best. No one can be that stup…..

  20. Kent

    Yawn. While u are busy criticizing the ghament with countless hate articles. I just laugh and sip coffee in my million dollar condo. Thank you CPF.

  21. AxE Law

    One fact about the accrued interest rate which is you don’t have to pay if you don’t sell your flat!
    if you really not happy about paying that amount, just stay until you reach the age of 65
    HDB is build for you and me to stay, is not a tools for you to invest or double your retirement fund.
    and one HDB unit is for one family nucleus, of cause don’t forget some families actually take advantage of the HDB by having two family nucleus staying together and rent out another.

  22. CY

    Accrued interest does not keep growing.

    I quote what Roy mentioned in his article: “If you sell your HDB flat, you need to refund the principal amount you had earlier withdrawn for the purchase of the flat, including the accrued interest, to your CPF account. This interest is the amount you would have earned, had the savings not been taken out.”

    The key phrase is “PRINCIPAL AMOUNT”. This would be the down payment + the loan amount + total loan interest paid which is of course a fixed amount.

    So how in the world can the accrued interest keep increasing? Roy clearly failed his maths!

  23. Pingback: March 2014 BTO Launched !! - Page 8 -
  24. Kitty

    I think this is the reason my dad paid full for the flat. He told me he doesn’t want to pay any interest. He still more smart than us.
    I did buy the flat before and sold it. CPF did require me to pay back the interest after I sell it away coz I did not buy a new flat later.
    There are lots of things we doesn’t know but we can we do? There is still lots of ppl think that nothing wrong with the government.
    Just a question to ask, we don’t even have enough money for now. Some ppl even have problem to survive. Do you still have to think of whether we have money for retirement? We can’t even take out our own money even if we really have financial issue.

    • AxE Law

      Just a question to ask,
      Have you ever question yourself what led you to empty-handed?
      Will the money which meant for retirement end up better on your hands?

  25. Benjamin Cheah

    As other readers have commented, it would be very useful if you could provide us with a breakdown of your calculations. Something like a google spreadsheet would be great!

  26. Jason

    Roy has always been part of the conspiracy theorist gang. I have not, found a single shred of evidence that the PAP government is ‘planting moles’ and has an ‘internet brigade’ hell-bent on online propaganda. He believes that everyone is on ‘his side’ and anyone who is not is either ‘misled’ or ‘a government mole’. Im sorry Roy, different people have different opinions, get used to it. Your opinion may not always be correct.

    And on the note of CPF, yeah, sure, we should make CPF optional. I quite like that idea. If you want to withdraw your CPF and waste away your retirement savings, please, by all means, go ahead, lets make this happen. But DONT you DARE ask the rest of us to bail you out. Don’t ask for welfare because that will mean taxing ME, and I’m not here to bailout your sorry ass.

    What CPF does is FORCE people to save money. YES, FORCE. Some of you may not like that idea, but that does not mean it is not required. Its akin to forcing a child to study and do homework, yes, the child will not like it, but you know that it will benefit the child in the future.

    I may not like PAP either, but CPF is one policy that I don’t mind living with. Consumerism has a vice grip on this nation, if we have no mandatory saving plan, most people will just spend their money without a second thought. Then those hard workers will have to support the welfare of these inconsiderate individuals through higher taxes.

    • Sgcynic

      I have not encountered any MRT breakdowns myself. Hence why are idiots complaining that the MRT breaks down frequently? What idiots, trolls.

    • Noel

      Hi, perhaps u havent been reading. MP Baey had officially acknowledge the existence of paid internet bridgate. If u had spent enough time digging forums, some intellectual political threads were quietly being removed too.

  27. Dhillon Lee KW


  28. jay

    Seems to be a rubbish article. The 2.5% accrued interest goes back into the CPF account. Which you can withdraw when you retire. You are making it sound like you are paying the money to somebody else. Don’t even need to read more to know the writer is just sprouting rubbish.



  30. Panic

    Your article very scary. I thought I no more CPF to withdraw when I reach 55 because of the gigantic amount of CPF Accrued Interest.

    I so panic that I check up more details from below articles. Turns out major anti-climax.

    Actually, does not affect me (or most people) at all – no need return whole gigantic amount of Accrued Interest.
    Basically, it is just to top up Minimum Sum if Min Sum not reached yet. I already reach Min Sum – so does not affect me.
    “If the flat is sold after you turn 55 years, you are required to refund (only) the Minimum Sum deficiency, or the principal CPF withdrawn for the property plus the accrued interest, whichever is LOWER. The Minimum Sum deficiency is the Minimum Sum applicable to you when you turn 55 less the balance in your Retirement Account (excluding interest earned).”

  31. Kelvin

    Hi Roy,

    No offense intended.. But u really need to learn some finance before making public statements like this. First concept is “risk-free rate” Singapore returns are low because we have a low risk free rate. I certainly don’t have a problem with the government giving me double the risk free rate at 2.5%. You can’t compare risk free rates to risky returns made my temasek. This is the basics of finance, the more risk u take, the more returns you would expect, the greater chance of losses as well. CPF is risk free, they govt has to pay cpf no matter what, rain or shine. Then there is the other thing about paying your own 2.5% accrued interest when you borrow from your account. As long as you pay this 2.5% to yourself, everything is fine isn’t it. It just shows that the govt wants to make sure u have certain savings before you blow everything away and start begging in MRT stations.

  32. Kelvin Wing

    @Roy.. I am not for or against the PAP you so obviously dislike and levy charges. Objectively, I have several counter views.
    1. Would you rather all residential apartments be rental units like the 50s & 60s? Say you rent a 1000sq ft HDB for $1000 a month. Each year would cost you $12,000. 10 years $120,000. 50 years, a number you used, is $600,000. After 50 years you are propertyless. I am even discounting inflation here. Just a flat $1000p.m.. In the your case, after xx years, you paid double the amount for the $300k flat. After 50 years when you have fully paid up the loan,albeit $600+k, you own the unit and your children or grans stay for free for the next 49 years.
    2. If you take HDB out of the equation and go borrow from a bank, your Interest + Principal after 50 years will be double or more than the original price. Unless you pay for the unit with outright cash. Even with cash, you must take into opportunity costs. If you split your $300,000 cash and buy 2 units instead with balance borrowed from bank, you may be better off. This is proven by many who became rich during the property boom times!
    3. Accrued interests repaid to your CPF account upon the sale of your flat BELONGS to YOU. PAP can’t take it away.
    4. Companies typically make 12 to 15% ROE. Sometimes >20%. You think they will pay 18% dividend to shareholders? Obviously not. They will reward the directors (majority shareholders) with more fees and more car upgrades, 1st class travel etc etc. Temasek holdings / GIC make average returns of around > 6% / 12% . You think CPF interest rate should be somewhere around 8%? Dream on. At least the earnings add to our reserves and kept for our future generations. Unlike that of the Public listed companies that can, within limits, use to reward staff and directors.
    5. Other countries are paying much higher interests on the superannuation/pension funds. Many of these countries are broke and are spending more than the earn. Just take Malaysia for example. In 1965, 1 S$ = 1 M$. Today, ! S$ = 2.55 M$. So what if they pay their pensioners 9.5% interest on pension funds. Singaporeans are laughing their heads off everytime they go in to shop in JB or golf in M’sia. Cheap cheap. is all you hear.
    6. When Singaporeans withdraw their CPF monies and invest in a landed unit (gated) in Iskandar, they can live happily after with the balance. At least this is becoming a viable option for the sandwiched class Singaporeans. Can’t say this with the Malaysians.

    WHAT I AM MORE CONCERNED IS HOW COE HAS ROBBED THE WORKING CLASS OF THEIR RETIREMENT NEST EGG. Maybe you can do some research and write a more convincing article.

    IN one’s lifetime from 25 – 75 (50 years) you may earn 3-5 cars. This means ave COE price of $80,000 = $320 – 400,000. Now, when COE was first introduced, cars don’t last that long. Today, a 10 year old car is mechanically sound and body in good shape. Thanks to improved road surfaces and car technology. With VICOM testing on roadworthiness etc, why scrap a car that is 10 years old, car may be KIA, Lexus, or Cherry QQ. Criminal wastage. Govt ought to look into this!

    • Sgcynic

      I wonder where Temasek Holdings find the spare $ billion to do charity around the region? Raiding from our reserves?

  33. Truth Hurts




  34. Min Sum Growth Rate

    Can some one explain to me why the Min Sum is increasing faster than the inflation rate? If anything, it should increase at the same rate as the inflation rate. The interest CPF pays us (2.5%) already helps to offset inflation somewhat. Why then does the Min Sum need to increase at 2x that of the prevailing inflation?

    I don’t have a background in finance so i’d be grateful is someone can explain this to me. I may have missed something here.

  35. Andrew

    Haha!! very clever. Singapore has 37% contribution, sure. UK only has 22%. UK people can’t buy a house with this money – it covers healthcare and pension only. Earn your wages, pay social contribution and tax and then start saving for a house is the way it has to be. Everyone in UK gets the same government pension – a maximum of around SGD 1000 per month when they retire – regardless of the amount paid to the government during their lifetime. Singapore reaches 18% income tax on any earnings over SGD 320,000 per year – UK has 40% income tax on any earnings above (roughly) SGD 90,000 and 20% below that. Reduce or abolish CPF and then you can complain about the tax rates going up instead!

  36. Pingback: Fraud Exposed: The Dirty Roy Ngerng Scheme to Trick Singaporean | reddotwinston
  37. agree with it

    I do agree with the main points of the writer just that some parts of it may be exaggerated. But in general, the important msg that I see from the article is that The cpf scheme is really a means to lock up our funds permanently and it is a foregone that we will not have Much money yo take out at 55,like it or not.

  38. Siti

    I guess this also applies to CPF for education. My own CPF money used for my son’s polytechnic education. After 3 years, it totalled up to abt 6k. He is in NS now and not working, so he could not pay me the CPF back for the money used for his education..
    I found it a ridiculous idea. Its my own CPF money and I want to spend it on my son when I am still alive. I dont know whether I could ever spend my CPF money with this kind of government being like a BANKSTERS! Worst still, my son needs to pay me back with the interest accrued and now reaching nearly 7K. Aiyoh!

  39. Derek

    Very confusing article but many simple factors not considered. If you are not allowed to use your CPF to pay for your house this means you have to come out with hard cash to service the loan (less money from your monthly income to spent). Using CPF reduces your loan amount and if you are using it together with cash to service your loan, that equates shorter loan period (more money put in to service a fix amount). Shorter loan period equals less interest paid. Overall you save on interest. If you don’t use CPF to make that downpayment and you dont have the cash, you need to borrow the money from another bank which also chargers you interest.

    The accured interest is ultimately paid back to your account, yes paid by you but that is because you took the money out. Banks pay you interest base on money you put in the bank because they have to use that money and invest so that they can pay you interest. If they don’t invest and earn, how to pay you interest? similarly, if you remove all the money from your bank, how to expect them to pay you interest?

    Lastly lets say you don’t need to pay accured interest, you will only have the money you took out from your cpf at your retirement. I rather have 600k than 200k when i retire. Again the CPF is for retirement.

    Been out stationed overseas in many countries over the years and i still think Singapore is the best. That sense of safety is not felt else where. The efficiency of things in the country is unmatched. Its the people’s attitude that needs to change.

  40. AxE Law

    Aiya, 40% of the population is not appreciating the current policy.
    Once the CPF cannot use for housing and education (By the way, this is just following other countries that Roy mentioned in his article), people will realized their short-sighted. That time, they will complain about another thing too

  41. Singapore Singaporeans

    Dear Singaporeans,
    Noticed there are a lot of questions on how the numbers were derived.
    Roy has condensed a lot of points into this article thus many may have missed how they are concluded. Many of the raw numbers are found in my photo album found in the link below. They are available for public viewing. Do note, they are NOT CONCLUDED IN ONE STEP, but many steps.
    It is the intent for Singaporeans to do their own calculations so as to make their own conclusions. It is a precise action of calculating and using the calculator to go through 2 sets of compound interest. The calculator links are found in the link below.
    The number driven exercise was done with the intent to open eyes and not about being a maths or investment expert. Only when Singaporeans starts asking themselves the right questions would we be able to find answers to the issues we have today.
    Majulah Singapura
    Singapore Singaporeans

  42. Farterx

    The government in Singapore as far as I know is the least corrupt in the world. Singapore is a secure country for finance, business and living. But security comes at the expense of freedom. Singaporeans lack freedom, but the government really takes care of us, sometimes too much.
    Take it simply, the government here is like a parent, and the citizens are their children. The parent sets aside this piggie bank (CPF) for the child to save money. Well the child is not suppose to touch the piggie bank till when he is old enough, however if the child wants to take the money out he has to put more money back in just as a deterrent. At the end of the day when the child is old enough the child should get all the money in the piggie bank. However that is if the government remains uncorrupt, once the government becomes corrupt, you can see your piggie bank money being gambled away.
    But I guess complain all you want, Singapore is like that mah… how can you change the system?

    • simon liew

      Hey FCUK OFF! Since when is the government uncorrupt? Just look at the recent OLAM insider trading fiasco? Who is in charge of the takeover? Why is a sinking company being bought over at a high price? Who are the ones who gained? Why SGX did not stop trading? Least corrupt my foot! Only Goons like you believe the PAP.

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