Growing Our CPF: Time To Go Back To The Basics

Let’s start with a simple question – if we want our CPF to grow, how can it grow?

The simple answer is this – let the money in the CPF grow.

The next question then is, how can our CPF monies grow?

At the simplest level, two things can be done:

  • Increase our wages, so that we can set aside more money into the CPF
  • Increase the CPF interest rates, so that our CPF monies can grow faster

Slide1So, you see, when we ask the most basic questions, it is very clear what needs to be done to grow our CPF – increase our wages and the CPF interest rates. And indeed, many Singaporeans have already advocated for these two points to the government.

It is thus disappointing that the government hasn’t seemed to take these suggestions into consideration to let Singaporeans grow our CPF.

In Parliament on Wednesday 28 May 2014, Prime Minister Lee Hsien Loong discussed three other ‘approaches” instead:

  • He wanted Singaporeans to “work longer so that you continue to have a salary and you are active and you retire later”
  • He said that Singaporeans could “unlock the value which is in their HDB flats” by “mov(ing) out of their flat and into a studio apartment” or “shorten(ing) the lease on your flat”
  • He also suggested to “enhance CPF-LIFE so that the payouts can keep pace with the cost of living” (Lee Hsien Loong said that he “will say something more about (this) … come National Day Rally”)

Slide2Let’s take a look at these approaches and discuss them.

Why Do Singaporeans Need To Work Longer?

But why do Singaporeans have to work longer? Haven’t we been able to earn enough to safe?

Since 1996, the real wages of Singaporeans have hardly grown. In fact, for low-income Singaporeans, in 1996, they earned $800. Today, they are still only earning $800 and this is after nearly 20 years! For median income Singaporeans – for the most of us – you can see that our wages have remained stagnant as well.

Real median monthly income of resident employed, 1996 to 2009Do low-income and the majority of Singaporeans have to keep working today because we simply didn’t see their wages grow and couldn’t save enough to be able to retire?

Quite clearly, if the government refuses to increase our wages, how will our CPF be able to grow? Wouldn’t it be more logical to increase the wages of Singaporeans to catch up with the lack of our wages growing over the past 20 years, rather than to ask Singaporeans to continue to work on depressed wages?

Why Do Singaporeans Have To Sell Our Homes?

Next, what happened to home flat prices such that our CPF became reduced by high flat prices?

In 1994, the government “liberalised” the CPF to allow it to be used to buy resale flats. Thereafter, prices increased rapidly. The prices of new flats were then increased as well.

Slide31Thus our CPF became depleted via two ways:

  • First, our CPF wasn’t growing because our wages weren’t growing.
  • Second housing prices grew several times faster than our wages and CPF

This meant that we have to use more and more of our CPF to buy the flats.

If Singaporeans have to sell our homes today so that we are able to retire, is it because flat prices were growing too rapidly that it cleaned out a large part of our retirement funds?

Wouldn’t it make more sense to increase our wages to catch up with inflation instead, so that our CPF will grow as well?

How Can CPF Payouts Be Increased?

Here’s another easy question to ask ourselves – if we want the CPF payouts to increase, what can be done?

Increase the CPF itself, right?

We have already discussed above how the CPF can be increased – by increasing wages and the CPF interest rates.

Lee Hsien Loong wants to “say something more about” this at the National Day Rally. The question is, will he announce increases to our wages (to catch up with the wages that we have been losing for the past 20 years) and will he increase the CPF interest rates?

Slide3How Much Should CPF Interest Rates Be?

But it is not just about increasing the CPF interest rates to any arbitrary amount.

Today, Singaporeans earn the lowest interest rates on our retirement funds in the world. We earn only 2.5% to 4% on our CPF and have been earning the lowest interest rates in the world for 16 years now. The last time Singaporeans earn such a low interest rate was before 1963.

Slide28Slide26There was a time when Singaporeans were able to earn much higher interest rates. For more than 1o years in the 1970s until 1986, Singaporeans were earning 6.5% on our CPF. Under the PAP old guards, Singaporeans were well taken care of.

Slide4So why did the CPF interest rates got pushed down by the new PAP politicians? Why did they do this? Why were our CPF interest rates decided arbitrarily?

Then the other question is – what should our CPF interest rates be based on?

As I had written before, it is now a known fact that our CPF is invested in the GIC and Temasek Holdings.

Slide10And since the GIC and Temasek Holdings are earning 6.5% to 16%, shouldn’t our CPF be pegged to those earnings as well? Why then are Singaporeans earning the lowest interest rates in the world, at only 2.5% to 4%?

Slide46Does this make sense when GIC and Temasek Holdings are now the 8th and 9th largest sovereign wealth funds in the world?

Slide40But Singaporeans have the least adequate retirement funds among the high-income countries and one of the lowest in the world?

Slide5Lee Hsien Loong also said that, “But we have to proceed very, very carefully because it is human nature to want more without wanting to pay more for it.” He also said that Singapore is “going against the tide. We are increasing our social spending, precisely at the time when many other countries in the world – developed countries – are trying to cut theirs.”

However, what Lee Hsien Loong had forgotten to mention is that the Singapore government actually spends the lowest public spending among the developed countries.

Slide14Also, the Singapore government spends the least on social protection for Singaporeans – you can see below how we compare with the Asian Tigers.

Slide51Perhaps what Lee Hsien Loong’s had said needs to be seen in context. In a situation in Singapore where social spending is the lowest among the developed countries and one of the lowest in the world, doesn’t that mean that Singaporeans have been shortchanged? And also since 1996, the wages of Singaporeans have remained stagnant. Does this mean that Singaporeans have been shortchanged for nearly 20 years now?

If “Singaporeans want more”, are we being reasonable? It is perfectly reasonable for Singaporeans to demand for more, since we have been shortchanged for so long. Not only that, we have been paying more than we should be getting back!

Thus it is thus unchivalrous for Lee Hsien Loong to say that humans “want more without wanting to pay more for it”, when Singaporeans are already paying more than we should. As I had explained before, when it comes to healthcare, retirement, education and transport, Singaporeans are already paying more and not getting back what we pay.

As such, is it unreasonable for Singaporeans to want the government to return what we have been paying back to us? It is not. It is only right that the government does so.

Lee Hsien Loong had quoted President Tony Tan who had that Singapore should “maintain constructive politics that puts our nation and our people first”.

Lee Hsien Loong had explained that “constructive politics” is about “developing effective policies for Singaporeans (and) … having a robust and open debate to ensure that proposals are scrutinised, are debated, are argued so that we can find out what the strengths are, identify the weaknesses and the problems and we come up with the best ideas and solutions for Singapore.” He had also said that he is “very disappointed that the opposition has offered very little of this in this Parliament.” Finally, he said that he “demand(s) high standards of people in politics” who are able to debate “responsibly, through open, direct raising of pertinent questions, and establishing the truth, to prevent incompetent, dishonest or self-serving people from getting into positions of responsibility and doing great harm to Singapore.”

I had invited to Lee Hsien Loong to an “open dialogue” on our CPF matters so that like he said, we would be able to have a “robust and open debate” on the CPF. We would then be able to “scrutinise” how our CPF is actually being invested in the GIC and Temasek Holdings, so that we can “come up with the best ideas and solutions for Singapore”. He has not responded to the invitation but I still hope that he would accept it.

He had also said that he is “very disappointed that the opposition has offered very little” but may we remind him that Singaporeans have offered many solutions to better Singapore but this has similarly fell on deaf ears. Perhaps Singaporeans are similarly “very disappointed” with the PAP and Lee Hsien Loong’s current administration.

Finally, I agree with him. We should “demand high standards of people in politics” who are able to debate “responsibly, through open, direct raising of pertinent questions, and establishing the truth, to prevent incompetent, dishonest or self-serving people from getting into positions of responsibility and doing great harm to Singapore.”

I think this is what we can all agree on. I look forward to a constructive dialogue.

So far, the discussion in the mainstream media has been shaped by the government. We do not get to hear the voices of the many Singaporeans who have voiced out about our thoughts on the CPF and how we can improve it, such as from concerned Singaporeans such as Leong Sze Hian, Kenneth Jeyaretnam, Goh Meng Seng and Phillip Ang who have written numerous times on the CPF online, and from many other Singaporeans.

Instead of Lee Hsien Loong wanting Singaporeans to work longer and sell our homes to be able to have any money for retirement, wouldn’t it make more sense to increase our wages and increase the CPF interest rates so that we will be able to save more for retirement? Instead of trying to resolve the problem by creating even more problematic layers, it might make more sense to go back to the basics and fix the root of the problem?

Singaporeans have a right to know how our CPF is being used and how it is really being invested in the GIC and Temasek Holdings. Singaporeans also have a right to demand for transparency and accountability on how our CPF is being used. It is not right that when Singaporeans have set aside so much of our CPF (nearly 40%), but we are unable to withdraw our CPF monies to retire. The government has a responsibility to explain clearly to Singaporeans what is really happening to our CPF. Singaporeans cannot be pushed around much further with rhetoric or broad statements that do not gel with the lived experiences that Singaporeans are really going through.

Singaporeans have a right to demand for answers and to know the truth.

On 7 June, we will be organising an event to demand to the Singapore government to #ReturnOurCPF. Read our demands below.

We have also set up a petition that you can sign here.

We look forward to seeing you on 7 June. The Facebook event page can be found here.

Return Our CPF Colour Boxes 2b@EnglishReturn Our CPF Colour Boxes 2b@Chinese@without de


  1. twitter lee

    I support you Roy, please keep up the momentum. I saw what Dr Toh Chin Chye wrote in an article earlier and paste here for all to see.

    I would like to put this question to the Minister for Health or the Minister for Labour who is responsible for administering the CPF. What would this percentage be if the withdrawal age were raised to 60 or 65? Of this amount that was withdrawn, two-thirds were spent on buying houses, mainly HDB flats. So only one-third was spent on retirement…

    What is irksome is this: that the Government is using people’s savings and telling them how to spend their savings. That is the nub of the problem…
    We need to clearly define the boundaries within which the CPF will be used for retirement. We must spell that out. You just cannot say, “Let us raise the withdrawal age to 60 or 65.” It must be 60. It must be 65. Now, at which age? This Paper does not contain any calculation at all to say what will happen if it is withdrawn at 60, or what will happen if it is withdrawn at 65…

    I think fundamental principles are being breached. The fundamental principle is this. The CPF is really a fixed deposit or a loan to Government, which can be redeemed at a fixed date when the contributor is 55 years old. If I were to put this sum of money in a commercial bank and, on the due date I go to the bank to withdraw the money, the manager says, “i am sorry, Dr Toh, you will have to come next year”, there will be a run on the bank! It is as simple as this, that the CPF has lost its credibility, the management of it. This is fundamental. You were taken by surprise by Medisave. Then they say, “6% of your Special Account will be kept for Medisave and you cannot withdraw that, even if you were to die.”

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  3. Why I Vote PAP - ROFL

    Is this true?
    Vote PAP because they can guarantee that you will always have sufficient money in your CPF account for the rest of your life.

    • choofrfreoer

      Of course it’s a loan because the government uses it to invest.

      Now, what do you think would happen to the real value of CPF monies if the government didn’t invest them, but locked them up and left them to the mercy of inflation?

  4. Albert Ng

    To Roy CPF is like ABC, very easy…
    1. Increase Interest Rate. Talk is easy, from where the money? and do CPF still pay you interest if you withdraw it to buy housing? If you have little balance in CPF even pay you 10% interest might not help you much if your income is low.
    By paying high interest rate it will benefit the higher income more because they can have bigger balance in CPF, they can use more cash less CPF but the lower income have no other choice.
    So is Roy trying to help the higher income more than the lower income?

    2. Increase Wages. Talk cock sing song lah! you think you are boss is it? You think only Singapore can produce the kind of product and service is it? You think all business are super money making is it? Everyone also can sing song, pay higher wages and if that is so easy you will be a boss already, no need be a health care worker and asking for donation.

    • cleareye

      So far i just saw all nice & sweet suggestion by this loser… as the biggest motive are to draw desperate public to fall into the perplex gimmick

      just like rich man son, talking very simple n easy on how to use & spend the father $$
      but without any ways on how to contributing or earning in pratical way to the fortune

    • Ace

      Albert, your comment does not make sense.
      1. Roy already pointed out that higher wages is a solution for the average worker. With higher wages, people will have more money in their CPF and hence are able to grow their CPF. If higher interest rates helps the poor but the rich also happen to benefit from it, then Singapore is a wonderful place to be right? However, this higher interest should only apply to Singaporeans and not PRs who have the ability to give up their PR after working here for a period of time and take out all their CPF and return home.
      2. Higher wages. Your statement is very general and does not apply to many industries here. Tell me, if the hourly rate for a McDonald’s’ helper increases to $10 instead of $6, are you saying that MacDonald will shift all their operation and shops to Batam or JB? Rent has risen over 100% over last 10 years, so if your theory that higher cost chases away business, don’t you think the PAP should implement rent control?

      The true reason for the low wages here is our weak Union and greed of business owners who are demanding an ever higher percentage in profits. If our Union is strong, the other cost and profits would have been kept down to make up for wage increase.

      • Francis

        Ace, of course everyone wants higher wages..but if our labour costs become so high, why would companies move to singapore? it’s the same reason why companies move to china (when their costs were low in the past)..

      • cleareye

        somehow agreed “rental & profits stacking” are the 2 major costs, so u think that simple to make the adjustment & can be done easily in a layman term like u do

      • cleareye

        since u said union are weak…. can u suggest what strong or tactical way u can cut into this but not something like even a pri sch kid also know how to solve it by cutting rental & less profit taking

      • Ace

        You need to pay much higher wages in the USA so why all the major Tech companies are there?
        Obviously wages is not the only consideration for companies when they want to set up a business in a country but you guys are always using wages as the bogey man so that rent and profit can remain high. The reason why rent and profits must be kept high is quite obvious.

        Unions are form to protect labour; not employers or governments. I do not need to teach the union what to do. They are paid to do the job. If they do not know how to do their job, they should step down and let other do the job.

      • wait and die

        Ace, since you pointed out major Tech companies are from USA, what about other industries? why those industries don’t grow big? Can the Unions there helps the industries to turn big too. Nobody deny some of the points here, but we can’t use one or two factors and start making comparison. This just shows shallow thoughts and childish behaviour.

      • cleareye

        is your narrow view or history to think that union are only set for labour.. in today role union act more like- for a overall environment to run cohesively

        “I do not need to teach the union what to do. They are paid to do the job”
        in fact i like the answer u group always put up.. as though u all got nothing to provide beside perplexing attractive calls

        “not know how to do their job, they should step down and let other do the job.”
        so u think next group for example u group take over union can do a better job?? if u really have the insight of the real problem consist of the complicated global environment & not as superficial as u think.. just to attract those desperate fellow beings

      • Albert Ng

        How stupid all those who donated are helping Roy to fight for the high income group.
        If CPF interested is paid 10% what will be the outcome?
        1. The high income group has the most CPF balance so they earn the most interest.
        2. The high income group will use more cash than CPF to purchase their HDB, thus keep more money in CPF to earn 10% interested.
        3. The low income have to withdraw their CPF to purchase HDB, they don’t have a choice. So with very little money in CPF they will earn very little even if CPF interest is 10%.
        4. The low income will avoid medical as they prefer the money in CPF to earn the extra interest. The high income can pay cash to seek medical.

        So paying high interest rate in CPF is helping the rich.. where does the money coming from? So this is really inequality to the lower income and is what Roy is fighting for.

        So many people choose to follow blindly, not everyone is born smart but at least don’t follow a fool.

      • choofrfreoer

        Ace, please compare apples with apples.

        You said “you need to pay higher wages in USA”. Can I refer you to the real GDP per capita? The average Singaporean out-earns the average American by quite a bit.

        If you are only comparing Singapore’s high-tech industries with USA’s, then I ask you this question: Are our high-tech industries on par with those in the USA? Did we found Microsoft, Apple, Facebook, Google, P&G, etc.?

      • May

        Not necessarily, where cash flow permits, the rich are likely to prefer using cash which earns close to nothing in the bank, as compared to CPF. 10% interest is A LOT. Hell, if I have excess cash, I might even put money into CPF to earn it. Which, guess who are the people who do? if I am rich, I’d park my savings in CPF, coz when I’m 55 I can take out whatever is excess of the MS anyway, and if I am really not worried about money, I’ll just leave it in, 10% interest would make me a super happy retiree. That is 10% risk free return! But on the other hand, if I’m the poor guy, I have to take out CPF to buy my house, in which case, I will be risking using my only retirement savings account on a house. So when I retire and do a downgrade, I’ll need to return the amount and accrued interest to CPF. This would set me back a lot at 10%, did I make 10% from the house? what if I bought it high and there was a property burst? would it be possible that 10% would actually wipe out my cashflow?

        it’s not easy to strike a balance, the interest in CPF should be good enough to off set the main bulk of inflation, yet not enough to allow any single group (especially the rich) to take advantage of it. That is the point of a retirement account. We do need to save for bad weather and old age, and it’s a constant struggle for some to not be tempted to spend whatever they have to feel more comfortable in their current situation.

        If anyone is so desperate to use their CPF on a day to day basis or at 55 years old, imagine that guy at 65… 75… without any CPF.

    • cleareye

      i’ve to correct something from your assumption on high incomers will use cash over cpf(if 10% int pay), cash is liquid while cpf not.. most still prefer cash in hand even it cant fight the 10%int gain, but true they will benefit more, to pay lesser cash as in bigger gain on cpf compare to d tiny multiply of a low incomers cpf

      unless u refer to minor treatment, it wouldnt change for neccesary medical, becos most sporean are kia xi… their live still more important than the attractive int,

      for the rich they are placid whether they have that jug of water or not but the low incomers(all their supporters) are so desperate to have that tiny cup of water.. & they know well that where they’re setting up

    • LOL

      Albert, please do your math, understand and read more on cpf contribution first before you make stupid comments like this, increase the 10% cpf interest rate does not make the rich richer, there is a cap limit of how much you can deposit in CPF every year which is $30,600. Even if you max out yr CPF contribution every year of $30,600 per year for thirty years till your retirement, the total is only 30 x $30,600 = $918,000 (where 63.88% will go into ordinary account and 16.66% will go into special account and the rest into medisaves) from age thirty to sixty-five which is the government retirement age now. With your housing price at $350,000 – $ 500,000, more than half of your cpf ordinary account will be gone into housing throughout yr life. 16.66% of $918,000.00 which is $152,838.80 will be the total sum inside your special account excluding the interest rate of 4%. With the inflation rate and medical costs going up every year, even if you max out your payout of $30,600 every year, you still will not be able to retire comfortably at 4%. Your medisave only allow you to withdraw $5000.00 every year, so even if you have alot of money inside your medisave, you also cannot use it under the current government policy. Do you get it?

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  6. Irina Tan

    You raise the issue of Singapore spending very little on social security, but do you realise that most of the countries on that graph have insane public debt levels? For Singapore, a country that has exports over 100% of GDP, having to finance a high level of public debt will wreck our currency faster than you can remember what CPF stands for. Singapore is in a unique situation, and it’s ultimately not right to compare ourselves with other countries like this. Please understand that Singapore faces problems that other countries do not, and thus we cannot use other countries’ numbers as a benchmark for ourselves.

      • John Smith

        How many times to I have to post that we are not a Nordic country?

        Nordic countries have vast amounts of natural resources. Sweden has plenty of iron ore resources, Finland exports trees, Norway has timber, metal and fish. Basically, they generate money by stripping the earth of it’s resources.

        Can Singapore do this? If you want to analyse a country’s financial situation, please analyse why it is in that situation, instead of simply saying “we must follow it”. The more important question is, “can we follow it?”

      • Chris

        As many times as u need. Becos they dun get it. They think money grows on trees.
        The prime question is: is our PM corrupted?
        Yes? Then go ahead and sue him. Roy, the whole Singapore is behind u.
        No? Then what is Roy trying to do?

        That’s more simple for anyone to understand than trying to match our little island country with the likes of USA, uk, Norway, etc.

    • From Beyond

      You guys are a mirror image of your masters. Ministers demand million dollar salary but yet ask WP to provide better alternative. Now pay union leaders to fight for workers, you ask for solution. You think that you are the main contractor looking for a sub-contractor.

      Call PCK in that case.

  7. wait and die

    I am upset and quite furious of the lousy posts made by Roy in the past. I now find him as a public figure more entertaining than irritatng. I feel entertaining and amusing sometimes when reading this blog. For e.g. “very simple to grow CPF … by increase the interest rate”. In Roy’s previous article, we need to pay interest to bank + 2.5% CPF interest accrued when buy & sell HDB subsequently, that’s means government is sucking our blood. Now, if Roy is a truth revealer, than we can expect with the increase of CPF interest rate, say 10%, than we going to pay even more CPF interested accrued (10%). Wonder whether such increase will lead to increase HDB price and make younger generation more difficult to buy HDB? Roy’s proposal is like killing the golden goose for the golden eggs, leave nothing behind for the next generation.

  8. saveus

    what golden goose? There seems to be nothing left for the next generation except for those ‘elite uncaring’ white horses. Our excess CPF goes into what? nation-building? then we should get more free things like basic housing, free education for all, more support for childcare etc, but no have? When we talk to foreigner we tell them we are first world but we actually have 3rd world living standard. suggestions to increase CPF are only to add more to governmental coffers. Why is the HDB which is a concrete thingy around space charged at such a ridiculous price? I believe Roy pointed out salient points which are sound, and if the politician did not want to discuss it in an open letter invitation it sounds fishy. What are they hiding?

    • choofrfreoer

      Sorry, but I’m really interested to know where this sense of entitlement comes from.

      My grandparents were all illiterate and worked part-time in menial jobs like coolies and trishaw riders. But they didn’t complain that their neighbours were richer or lambast the government about their lifestyle. Maybe because as immigrants, they had this drive to work harder.

      Why has this sense of entitlement arisen in recent years? I really question this sometimes. All these sentiments are just proving that old man right when he said we are a “strawberry generation”.

  9. John Koh

    Looks like you have a teams preparing and churning out info for you? With your full time job you can’t be so free! Hope you are not being used….by some invincible hands! You could have been great if you stick to your battle lines on the CPF…but you f**k up with stupid accusations and obsess with taking down the PAP and asking for mass rallies or mass demands.

  10. Mat

    Property prices grow up, cpf is not enough. Why didnt you take in to consideration, people who invested in property using CPF reaped more than your 6.5%, it is a twisted agument. 2nd your economics knowledge is not up to the standard. Singapore is an export oriented economy. We cannot use % of GDP as yard stick to compare against other countries. Why should the government tell you where they have invested ? You think your squirrel brain can match educated and experienced people ? If Singapore is governed the way you want it, forget about 6.5%. Even Singapore Dollar will loose its value. Lucky people like you are in opposition.

    • choofrfreoer

      Short-sighted demagogues never take into account real long-term effects. They only see wages increasing. They don’t see the stagflation, the rise in exchange rate leading to a fall in exports and balance of payments, the subsequent lowering of GDP and eroding of the exchange rate and the difficulty of recovering from supply-side inflation.

      Then again, he never studied economics, did he?

  11. ddddx

    Hi Roy,

    I was mid-way into typing my comment to lambaste you on your suggestions by stating that: 1) higher rates creates higher risks, which cannot exist if the underlying asset have to be risk-free; and 2) There are trade-offs to increasing wages which may affect under critical components of our economy, such as the SMEs. Then, I decided to give you the benefit of the doubt, and took the time to read what you wrote (especially the 2 April 2014 post). Dear Lord, what you have said is actually very very compelling. I did not know about the accrued interest scheme; borrowing against myself, for myself was utterly shocking. Further, the exceedingly high growth rates for both minimum sum draws and falling interest rates where puzzling- in fact, if you looked at your ‘% in CPF minimum sum’ graph again, the largest spikes occurred in the periods of 1996-1998, and 2008-2009. Remember, what events happened in those dates? Asian Financial Crisis in 1997; US Subprime Crisis in 2008. We also know that our sovereign funds are vested in several global entities whom were greatly affected in both recessions. This begs the question on whether there was any sinister usage of our CPF assets as stop-gap measures for them to artificially inflate their returns during those periods.

    In any case, I thank you for during what you do, and I really hope that you do well in the trial. At the end of the day, i still don’t very much agree with your suggestions, but as said, your passion and talent to pry out the skeletons in the CPF closet cannot be underestimated, nor diminished. And at this point of time, we do very much need people like you.

    Good luck.

  12. choofrfreoer

    Hello, Roy.

    1. Do you know what the circular flow of income is and how inflation arises?
    2. Do you know how raising wages affects the aggregate supply adversely via supply-side inflation (way, way, way worse than demand-side inflation)?
    3. Do you know how inflation impacts the exchange rate and affects the balance of trade/balance of payments?
    4. Do you know what will happen to Singapore’s economy if no one buys our exports? Clue: Look at Japan’s “lost decade”.

    If not, please don’t talk about raising wages. Moderate inflation is good and is infinitely better than very low inflation. Deflation is the worst possible economic disaster, even more so than hyperinflation. Did you know this?

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  14. Neo

    Why stated that Singapore cannot take out our CPF but actually we can by monthly and not 1 lump sum?(If you have more then min then you can get a lump sum but need to have min so that it safe guard your life as you will not be able to earn when you are young.) If you want to take all out you can actually, pack up and leave Singapore and they will give you all your CPF but if you going to come in again remember to pay the interest that Govt going to earn while you take away the whole lump sum which can actually help Singapore to improve the country. If you are not keen on helping out our country you can just opt to leave actually.

    But remember every country have their own rules and if you cannot accept what the country plan for the whole of the citizen then there no point for you to shift to other country as you will face the same situation.

    My 2 cents

  15. singapore

    I really not pity you for your mindset. If given chance to elect u and let u run this country, I will be the first one to leave. Are u a qualify auditor, economist of at least a head of a family whom is responsible for the spouse and the kids. You style is INSTIGATION and why not u tell the younger generation to simply sit at the road-side with a signboard ” i AM HOMELESS, i AM JOBLESS, i AM HUNGRY. You just a forever ANGRY BIRDS style following some western culture ” Give me more social welfare, give me free food, give me a BIG house, give me free MEDICAL care, give me Maximum wages but less work hours, give me a DIAMOND secured future without me putting in any effort, give me all the FREEDOM to say to compliant to Make any noise I want, give me…………….. (its sound quite similar to mental patient whereby they living in their own WORLD).
    Why not suggest that the government fore-go all the taxes for Singapore Citizen, empty the treasurers and make sure each and every citizen is at least a millionaire, free housing, free food, free transport,free medical services, free education, free ANYTHING u like.
    Its sounds like u like this country going into a communist state. Everyone get $50 and all everything else free. Guess you feel comfortable as in this situation u feel comfortable and fair as if you did not make it, at least everyone not make it.
    In the three words “ENVY, JEALOUSY and HATE” , you just got the J and H.
    U want to understand how this small fishing village become a well respected county ? U should sit down with the finance minister to understand the future plan but OUTRIGHT u not qualify as your mindset is totally BURNT.
    Last but not least…….
    TILL DATE what have u contribute to this society?


    go back to basics…. why why why

    at school …
    why people everyday study i watch tv

    at work …
    why people chao pia i chao keng
    why people do OT i go KTV
    why people FD get $2 i casino get -$1000

    at sick …
    why people exercise i sleep at home
    why people eat salad i eat char kway teow
    why people normal weight i overweight

    at retire …
    why people stay condo i stay hdb
    why people drive merz i take mrt
    why people eat restaurant i eat kopitiam
    why people wife prettiest my batam girlfriend prettiest
    why people live on cash i need cpf
    why i want marnee gahmen no sponsor me!!!

    so many questions in life….

  17. 23yo

    Read the first sentence and I know the rest of this post is not worth my time. Dear, if you’re looking to GROW your cpf, you’re at a wrong starting point. That’s as good as putting your cash in a bank account and hope the interests will make you rich. Good luck.😂

  18. Steven

    To roy,

    To be honest, even 2% to 4% interest per annum is considered high… Besides, its risk-free. Ask yourself this question, which investment can give you a sure win profit constantly per year?

    Besides, if we were to increase interest rates for cpf, the rich will benefit more in this case, which will cause more social problems like inflation in property prices. The rich will use more cpf to purchase their properties. Then, with a higher property price, the poorer singaporeans will be affected in the long run.

    So to roy, i hope you can call off this campaign and all the best of luck to your upcoming case.

  19. Daddy

    First, the nordic countries such as Norway, Sweden, Denmark, Finland adopted a pension scheme that generally is a Pay-As-You-Go, which is actually a TAX on income earned. The monies collected formed a common pool of pension fund to be re-distributed based on certain principle that may be different for each country. While most of these countries had declared excellent returns beyond 6.5% on average, what was not told is the fact that the outflow (pension payout) is greater than the inflow (pension premium + funds returns) because (1) high pension payout, (2) smaller population (contribution), (3) pple living longer, etc. Fortunately, these countries had rich natural resources such as oil and gas in the North Sea, big MNCs paying high corporate taxes (25%), high personal income tax (up to 46% of earned income) and VAT (up to 25%) to contribute to the national spending which includes supporting the pension scheme. In fact, most of these countries had revamped their pension scheme in the 2000s from a common pension fund to individualised pension account as the previous scheme was not sustainable and discourage work. The promise of high pension payout continued to be a bugbear given that these countries also have minimum wage (impact cost of living) and any shortfall will ultimately be paid by taxpayers of future (smaller) generation.

    While I would love higher returns for my CPF monies, I would rather the govt share the fruit of Spore economic success indirectly rather than increase the CPF rates so that the benefit is targeted at Sporean only. For example, it could be a lump sum top up into CPF Life for low and middle income earners that will bring the overall returns of our CPF monies to be in line/higher than inflation/economic growth (over the same period of the person working life) so that the annuity payout can be higher.

  20. Economist14

    Dear Roy,

    the very low pension replacement rates you show are highly misleading, since they only include the CPF savings in the special account. This is what the OECD has to say about this:
    “The relatively low replacement rate for Singapore shown in Figure 1 of 13% is because the calculations only consider the earmarked retirement account. If an individual were to put the general account towards retirement-income provision as well, then the replacement rate would be 82%.”

    A study by the Ministry of Finance puts the replacement rate for the median male earner at 70.2% under the LIFE Standard Plan, even adjusted for any payments for house purchases. If the imputed rent from housing is taking into account, the figure rises to 77.8%. All these figures are higher than the OECD average of 59%>

    Click to access Occasional-Paper-CPF-IRR.pdf

  21. Fangster

    I don’t understand why are there pple out there asking for in-depth solutions from Roy. He mentioned that he is voicing out his concerns standing from the perspective of an ordinary singaporean. He gave his suggestions, and yes, it may be short sighted but he never said he is an expert. But at least, he voiced out rather than those who are knowledgeable but takes a back seat and just passing judgements.

    And so many goes on abt economics… because of this.. blah blah blah… so its like this… Do you guys really know how to do problem solving? If your mind is alrdy fixed on these impacts and constraints, you will never find a solution. And of course, this is a complex issue with many areas requiring in-depth understanding so to weight the pros and cons for the best solution. I am not an expert in economics, but i do know the fundamental approach to problem solving.

    Anyway, thanks Roy for speaking up! But stay objective, once emotions sets in, it will cloud your mind and your statements may be biased, hence reducing your credibility and invite questions to your true intent. Singaporean are smart people, most are able to read between the lines.

  22. Pingback: The CPF Conundrum | Inenet Consultancy Pte Ltd
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