Singaporeans’ CPF: “See No Evil, Hear No Evil”

Yesterday, parliament sat to discuss the CPF. It’s been nearly two months since Singaporeans stirred and the national call for the government to be honest and transparent about what they are actually doing with our CPF is still ongoing today. Many truths have finally unravelled over the past two months and more is being exposed each day as we go along.

Since the end of May, there have been numerous attempts by the government to explain their version of what they are doing with our CPF. It first started on The Manpower Blog on 25 May, followed by The Straits Times and Singapolitics. Deputy Prime Minister Tharman Shanmugaratnam and Minister without portfolio Lim Swee Say chimed in last month as well. The government’s feedback portal REACH also did a poll with 1,000 Singaporeans. Parliament also debated the issue at the last sitting and at the current sitting yesterday, where Tharman and Manpower Minister Tan Chuan-Jin had replied to parliamentary questions. PAP’s Member of Parliament (MP) Hri Kumar and Minister for Social and Family Development Chan Chun Sing also held forums with their residents. The other political parties, National Solidarity Party (NSP) and the Singapore People’s Party (SPP) also organised their own forums to get feedback from Singaporeans on the CPF.

There has never been so much debate on the CPF in the recent history of Singapore before. The national interest among Singaporeans to demand for truthful answers from the government has continued for two months now, and will continue as long as answers are not properly given.

Thus far, the government has given textbook scripted answers of their version of the story.

The Government Devised The CPF Minimum Sum To Give Singaporeans $1,200 But Singaporeans Are Only Able To Receive $260?

So the government’s story goes that Singaporeans do not understand what the CPF Minimum Sum is about. The government explains that the CPF Minimum Sum of $155,000 is computed to allow Singaporeans to receive a monthly CPF payout of $1,200 every month or what the government has computed as the basic living expenses necessary for Singaporeans (for a lower-middle income household) – how this computation is done has never been revealed. Yet, where the government finally (somewhat) reveals (for the first time) that possibly about 85% of Singaporeans are not able to meet the CPF Minimum Sum fully in cash, doesn’t this mean that 85% of Singaporeans are unable retire even with the basic amount necessary and are not able to retire adequately?

Also, the government claims that to meet the CPF Minimum Sum, Singaporeans are able to pledge our property to meet half of this amount, but if we do not pledge our property and we only have half of the Minimum Sum, then Tan Chuan-Jin explained that, “What it means is that with your smaller amount, your monthly payout will be correspondingly lesser, and that is all.” That is all?

Doesn’t make sense, does it? Then, so what if you have a policy that allows people to pledge their property as half of the Minimum Sum when it wouldn’t allow you to receive a payout of $1,200 and would at most, be able to receive a payout of less than $600?

In fact, if the property pledge doesn’t serve a practical purpose except to let Singaporeans meet the CPF Minimum Sum on paper but not be able to increase their CPF payouts, then why is it even used as a means to meet the Minimum Sum at all?

Tan Chuan-Jin also revealed that the MPs receive “an average of about 500 appeals annually from members 55 years and older who request to use more Retirement Account savings for housing, (where) … two-thirds of the appeals” are approved. Is it not ironic (and completely unnecessary) that Singaporeans have to appeal to the government to allow us to use our CPF to pay for our homes, only to have to pledge our homes to meet the CPF Minimum Sum, and then might have to sell our homes so that we are able to have even little to retire on? Convoluted much, and unnecessarily so?

Finally, when we look at the actual CPF Life payout that Singaporeans receive, Tharman had revealed in 2011 that the median payout is only a miserly $260. Not surprising, is it, when 85% of Singaporeans are not able to meet the $1,200 mark required in the CPF Minimum Sum, and 70% are not even able to meet the $600 mark?

If 85% of Singaporeans are not only not able to receive $1,200 in payouts but vastly lower amounts of less than $300, doesn’t this mean that the CPF is drastically inadequate and in need of immediate reform?

Is it not perplexing that the government continues to hold on strenuously to a system which has become severely broken?

The Singapore Government Pays Singaporeans The Lowest (Un)fair Interest Rates In The World

Second, the government claims that the 2.5% to 4% interest that the government pays is a “secure” interest which is “fair”. What does “fair” mean, anyway? Interest rates are either high or low. Evidently, the 2.5% interest rate that our CPF largely earn is the lowest in the world for retirement funds. Whether it is “fair” or not becomes then an issue of semantics. Low is low.

So, the government hedges the whole “trustworthiness” of their governance to claim that this 2.5% to 4% interest rate is thus “secure” and Singaporeans should thus feel assured. But what does how much our interest earns have anything to do with the government, and whether we can trust them (or not)? Does that mean that as long as we blindly trust the government, we will be able to blindly believe that the interest rates are good enough? The government has also claimed that, “Both Standard and Poor’s and Moody’s recently reaffirmed our credit (triple-A) rating” but the truth is that it was reported yesterday that, “Moody’s Investors Service says its the outlook on Singapore’s banks remains “negative” over the next 12 to 18 months.

The government also claims that the 2.5% to 4% interest is a “floor” rate, or the lowest that the government is willing to give. But isn’t this 2.5% to 4% similarly a “ceiling” as the interest rates on the CPF have never gone above this rate since 1999 or for 15 years now? Doesn’t this mean this is also the highest the government is willing to give? Calling this low interest a “floor” rate becomes then, obviously another game of semantics. To Singaporeans, the low interest is quite clearly a ceiling rate, where we can never earn higher interest rates.

If we put aside the play of words and look at the 2.5% to 4% by itself and compare it to all other retirement funds among the advanced countries which earn an average of 6%, then this interest rate is low. It is low (in fact, it is very low). Period. The government can throw in words, such as “fair”, “secure” “a floor rate” to beautify their presentation and try to sway our perception but take that all away, then low is low. Bad is bad.

Even so, the government still hasn’t explained why our CPF Ordinary Account is earning only a low interest of 2.5%. The CPF OA’s interest is pegged to the banks’ interest rates, but why is this so, when our CPF is invested in government bonds? Then, shouldn’t the CPF OA’s interest be pegged to the government bonds, which are earning a higher interest than the banks?

CPF Interest Rates Over the Decades @ The Heart Truths ROC

Why Has The Government Set Such A High Minimum Sum But Give Singaporeans Such Low Interest Rates On Our CPF That We Will Never Be Able To Meet The Minimum Sum?

The government might thus claim that the CPF Minimum Sum is set at a level to accord basic living but at no point in time did they explain how they are going to help Singaporeans reach this basic minimum. The government continues to reiterate that the 2.5% to 4% is a “fair” return but where the interest rates have remained at this low level for the last 15 years and where Singaporeans are still not able to meet the CPF Minimum Sum, isn’t it sufficiently clear to the government that at this low interest rate that Singaporeans are earning on our CPF, there is no way that we would be able to ever meet the basic minimum amount required?

Isn’t there a clear disjoint then? Why would the government propagate the CPF Minimum Sum, knowing clear well that at the “(un)fair” and low interest rates that they are giving to Singaporeans on our CPF that we will never be able to meet the Minimum Sum, never be able to earn a basic minimum amount and never be able to retire?

Does it not appear then that the policy making of the government thus seem somewhat hypocritical?

Singaporeans Are Made To Take On The Risks For The GIC’s Investments By Paying With Our CPF

Finally, for the first time ever (again), the government finally admits that Singaporeans’ CPF is indeed invested in the GIC, and finally told Singaporeans the truth after hiding this information for so many decades. Singaporeans have speculated about this for years, however the government has refused to admit to this. However, by June this year, when the floodgates can no longer be held back, the government finally bowed down to public pressure and admitted that they have been taking our CPF to invest in the GIC (and in the past, in the Temasek Holdings).

However, even then, the government continues to claim that by transferring our CPF to be invested in the GIC, the government is letting the GIC take on the “risk” of investment. They claim to give us a low 2.5% to 4% interest because this is a “secure” rate. GIC then takes our CPF to supposedly invest in higher risk investments, and because they apparently take on the “risk”, they get to keep the interest earned.

The government also claimed that, “The CPF has also avoided imposing risk on tax-payers”, but where the interest that the GIC (and the Temasek Holdings used to) earns on our CPF is not returned, this has been described by the Asian Development Bank Institute as an “implicit tax” that the government is making Singaporeans pay. Then, isn’t this a risk that Singaporean tax-payers are taking on, for the government? The government might paint the picture that the GIC is taking on the risk for Singaporeans, but the truth is that Singaporeans are the ones taking on the risk for the GIC, by paying this implicit tax to the government (or is it the GIC?), to help the GIC to stay afloat. Meanwhile, who sinks?

And as if it’s not already bad enough, it does not help that the government itself is on the Board of Directors of the GIC. Then, where Singaporeans are made to take on the risk for the GIC, isn’t the government making us shoulder this unnecessary burden? But wait a minute, isn’t the government supposed to protect Singaporeans? Isn’t there a major conflict of interest here?

Government does not interfere @ The Heart Truths ROC

The government has also still not chosen to admit this, but if not for our CPF, will the GIC even have this money to use for investment? If so, isn’t it only logical that the interest earned by the GIC be returned to Singaporeans, unless Singaporeans give specific permission for the government and the GIC to take our money away (but have we?). Why is the government giving us the lowest interest rates on pension funds in the world?

Even as the Worker’s Party Low Thia Kiang questioned how it is that the government has to give this convoluted reasoning, when with about $300 billion in the CPF, there are adequate funds in the CPF for it to be managed on its own, to be able to take on the risks and give higher returns to Singaporeans, the government continues to take the stance that it is better for GIC to take on the “risks”.

Mr Low has obviously exposed the flawed in the government’s reasoning but in a bid to hold its ground, the government continues to defend its stance, which has been much weakened by their circular reasoning.

The CPF System Is So Thoroughly Broken Yet The Government Tries To Fix A Leaking Tap By Stuffing A Cloth

By now, it is clear that the CPF has been very badly managed, to put it the most simply. The government has created layers and layers of problems – the CPF Minimum Sum, the Medi-schemes and liberalisation policies as Tan Chuan-Jin had himself admitted that “Many (Singaporeans) have low CPF balances because of … more liberal withdrawal rules which … (have) depleted their CPF savings”.

It is perhaps also contradictory when the government claims that the CPF offers flexibility for Singaporeans for housing and healthcare, when Lim Swee Say at the same time counters that Singaporeans should “defer cash withdrawals”, which thus directly contradicts the idea of this flexibility, doesn’t it?

Yet, instead of admitting that these patchwork solutions do not work and admit that an overhaul is desperately needed for the CPF to function again, the government chose to go through a series of logical leaps and fanciful words, just so to mask the inherent flaws that is running Singaporeans’ CPF into the ground.

It is perhaps pitiful that where the government has such a perfect opportunity now to finally be transparent about how they are managing the CPF and to be honest but the government chose to go back into their tortoise shell, while continuing to dress up the already cluttered and broken CPF in new clothes.

The government needs to acknowledge that what Singaporeans want at this point is a clear admission by the government on the lack of transparency and clarity of the system and to reform the system by going back to the basics of what a pension fund is supposed to do for Singaporeans – which is to allow us to earn enough to retire. And to do so, the government needs to increase the wages of Singaporeans and the CPF interest rates – two of the only and most direct solutions which would immediately resolve the issue facing us today, and to give Singaporeans choice on how to invest and when to withdraw their monies.

Yet, even as the solutions present themselves the most clearly, the government refuses to take them as the government continues to mire themselves in a convoluted pool of mess. It is perhaps most perplexing what the government is thinking when they rather withdraw than engage honestly.

#ReturnOurCPF Event To Ask The Government To Be Transparent To Singaporeans On What They Are Doing With Our CPF And To Reform The CPF System

As a citizen of our country, we cannot sit back and witness the change, or lack thereof, that is happening in our country and allow that to run our country into the ground. It is not a joke when our elderly Singaporeans are unable to retire and when the CPF system is no longer able to meet the needs of Singaporeans, and yet the government is unable to respond adequately. It is not funny.

At some point, we have to decide whether to take a stand or not, and whether to speak up for our rights, for the longer we stay silent on this issue, the longer we do not see the necessary reforms required for our CPF not done, and the longer our lives are put in an uncomfortable scenario that can be dire for our nation in the longer term.

This Saturday, an event will be held to advocate to the government to be transparent on how they are managing Singaporeans’ CPF and to implement real solutions to reform the CPF. Do come down to the event to make your voice heard. We are at a turning point in our country’s history where the activism of ordinary Singaporeans have a big part to play in shaping our country, and to bring it back on the right track. Do come down and join us. Your participation and your voice means each and every thing for our nation.

You can join the Facebook event page here.

#ReturnOurCPF Poster@pink final


  1. Elaine

    Thank you Roy for speaking for us 40% Singapoeans. If you stand for election in my constituency at AMK, I will surely vote for you. I want Lee HL out. He is not a good leader. We need someone who care for the people, not his own wallet.

    • jasmine

      I agree that Roy does not represent the entire opppsition. He could also represent those 60% who voted PAP. It isnt far fetch that he may represent more than 50% of singaporeans.

      • Ivan

        Unfortunately to a lot of his supporters, they do not think that way. To them criticising Roy equals to being supporters of PAP, in order words Roy represents the entire opposition against PAP, there is no other opposition faction at all.

        This is the part I am very annoyed at. They are implying that what other oppositions such as Chiam See Tong, Low Thia Khiang have done are worthless as compared to the intelligent brave martyred actions of Roy Ngerng.

      • jasmine

        @Ivan, I am also annoyed at PAP’s claim that they represent the “silent” majority. People who don’t have any views naturally are not represented by anyone. Theoretically speaking, only 10-20% of the people are represented by PAP. The rest of the 60% who voted PAP either because they think that voting is not a secret and they fear for their ricebowl or they are not interested in politics and voted for the incumbent. Those who voted conciously for the opposition naturally have views against the PAP and therefore they are fully represented by the opposition party they voted for.

      • Ivan

        But we are not talking about the true percentage of PAP supporters. This is about Roy and his supporters. Many of his fervent supporters are quick to label people who criticise Roy as PAP IB and that is one of the nicer name calling I have seen on this blog. Thereby implying that Roy is the only representative for the entire opposition faction and ignoring the possibility that person criticising Roy may be a supporter of other opposition party.

      • jasmine

        There are also fervant supporters of PAP engaging in name calling, mudslinging and slandering that targets Roy. As pointed out by yourself, being labelled as PAP IB feels nice. If it is nice to you, then you shouldn’t be complaining. I personally don’t care who you support as I have voted for LHL in the past. I know I made a terrible mistake and I am atoning for my mistake by being here to support Roy. Seriously, does it matter who you support? This blog is about exposing the mistake of the PAP government so just stay on topic and tell us what is wrong about the government. Which party you support is irrelevant here.

      • Ivan

        I never said it feels nice. How on earth does name calling feel nice? I stated that it is one of the nicer one I have seen, meaning that there are more horrible name calling I have seen that I don’t wish to type it out.

        I am not whinging about people not caring who I support. What I have been saying numerous times is that a number of Roy’s supporters are assuming that it is only Roy vs PAP, and people who disagree with Roy are automatically labelled as PAP supporters since what Roy says is always right and truthful. So how does this encourage meaningful discussion and debate?

        Lastly political truths are never black and white. There are no truely good or truely evil parties in politics.

  2. Ivan

    The 40% who did not vote for PAP does not equal to all 40% being supporters of Roy.

    There is more to the opposition than Roy Ngerng. Roy does not represent and does not deserve to represent the entire opposition faction against PAP.

    • Eddie

      Roy has never claimed he represented anything but his own views. He is not a politician nor does he head any group. He speaks for himself. So to say “Roy…does not deserve to represent the entire opposition” is unnecessary. I am happy to read what Roy writes.

    • Ivan

      Sorry, this is actually meant to be replied to Elaine above.

      But is it really unnecessary? He can represent part of the opposition against PAP, but to represent the entire opposition faction? I think not.

      However this seems to be the viewpoint of certain people who seems to think that if you are against Roy, you must be supporting the PAP. How is this not thinking that Roy represents the entire opposition? So are LTK, Sylvia Lim not part of the opposition then? Can’t people be against Roy as well as PAP and support other oppositions?

      • Ivan

        I meant my first reply was supposed to be a reply to Elaine, not a standalone comment.

  3. Eddie

    I admire your tenacity and energy. So long as you stick to a healthy robust debate, it serves the greater good for society.

    I offer another perspective: The Government should set up more dormitories for the elderly. This can be one bedroom, can be small bedrooms but with common facilities. And there should be nursing care available, cleaning services available and a certain amount of control so that no hoarding of newspapers, junk, etc. are allowed.

    Those who need money can sell their apartments to the government and moved into tiny flats..Japanese style but down in the void decks will be plenty of air-conditioned common space or even well-ventilated spaces for those who may wish to join in social activities.

    Some arrangements have to be made for cooking and other services.

    The CPF cannot sustain the old age. I will not add to the discussion. Rather I think there should be suggestions on what else can be done for old age and for the needy.

    • leesonghong

      with your suggestion, SINGAPOREANS will be more in debt! and where comes the money?!! already if you earn less then 2400 per month, no income tax is charged, one of the lowest in the world, com’on la, do not bring every cow to force drinking them the drinking the water…CPF and other old age issues are totally different, tackle one a time…ALL I WANT IS TAKING MY MONIES AND HAVING ‘EQUAL’ TREATMENT TO WHAT I AM PAYING AND HAVING THEM BACK, THE REST I DO NOT CARE!! YOU ALREADY SAID, ROY IS NOT A POLITICIAN AND IF YOU WANT ADVOCATE OTHER ISSUES, THEN YOU SPEAK UP FOR THE OLD AGE AND CREATE YOUR VERY OWN RALLY TO BRING THIS TO LIGHT…OR ELSE DO GET LOST!!

  4. Eddie

    One key question: Is the CPF scheme a failure? If most of the people cannot draw sufficient for their old age, then CPF is a failure. And there should enough data to show what % of the population needs extra help.

    To draw down the full CPF may not mean anything to those who have enough savings. For those without enough savings, controlling the CPF draw-down may only hasten an early death due to the suffering imposed. And there is no data as to how many have died and left behind what amount of CPF.

    We need more data. If too much CPF is left behind after death, then why did we not let them enjoy their CPF?

    And if all CPF have been exhausted it does not mean everyone will be dying on the streets. There are often extended family support. Again, where is the data to show what social burdens are imposed on the government.

    • True Or Not - PAP Does Not Want To Help Poor Singaporeans ??

      @ Eddie
      I agree with your viewpoints.
      However you and a lot of Singaporeans need to consider this.
      The PAP government is not interested in helping poor Singaporeans … and they are prepared to lose votes over this issue.
      Old man already said in past interview, policies will not be adjusted/ changed/ adapted to pull the lower strata of society along the national progress.

      Where is my proof?
      He unapologetically said he is prepared to lose those votes in elections. So be it.
      ( YouTube: Lee Kuan Yew Interview – Hard Truths To Keep Singapore Going- Hot buttons Topics )
      Please see at 28 min 30 second EXACTLY what he said.

      So please don’t vote PAP in GE 2016.
      And then come here suggesting that PAP should do this or that social work shit.
      PAP is not interested.

    • Xmen

      One comment on drawing down the “full” CPF –

      The “full” CPF should be significantly higher than what’s printed on the CPF statement. The government has been underpaying return on your CPF savings over your working life. Given that pensions in general make 8% over the years, you are missing 4-6% interest on your savings to the government. The 8% return rate is used by many governments and pension funds for long term benefits calculations and is not an imaginary number. If you combine GIC/Temasek/MAS long term returns, you should get something very close to the number. (Ignore Temasek’s Warren Buffett beating return claim for now.) You can also check out returns by other big pension funds such as CalPERS. Their returns are public information. But the key here is the REAL return, i.e. the inflation adjusted return.

      The government is failing its fiduciary duty by managing people’s retirement savings in a fixed deposit savings account. This is Finance 101 for retirement savings.

  5. Conflict of Interest

    The government GIC looks after the government interest, supposedly to maximize returns for the government. So who looks after the interest of the CPF members? Nobody. The government gives a “fair”, “derisory” interest rate that is much lower than returns made by other pension funds (Malaysia, Norway, etc.). The only way forward is to restructure CPF Board so that it takes care of CPF members. The CPF Board must be an independent investment board, not one that simply passes all our monies to the government at whatever rate the government wants. This has led to estimated losses of $1.5 million per CPF member. This is totally unacceptable!

    • David Pittey

      There is no doubt the Government is under intense pressure to change the way CPF is structured. I am sure behind the scenes Civil Servants are working frantically to produce alternatives. All so the government can say ” Look! we do care! we listen to what the people want” However I can almost guarantee that on the surface it will appear Ok; but underneath it will be costing the citizen more one way or another.

  6. Govt Do This, Govt Do That

    @ Xmen, Conflict of Interest & David Pittey
    You guys seem to think or assume that the PAP government is here to serve all Singaporeans.
    I’d argue that the PAP government is only interested in serving the PAP’s definition of elites.

    Nothing wrong with all the changes to CPF that you are proposing.
    Just don’t expect the PAP government to do it.
    You want those changes?
    You will need a change of government.
    You will need to vote for a pro Singaporean political party.

    • PAP Not Interested In The Non-Elites

      I think LKY has already said PAP is not interested in the non-elites.
      And that he is prepared to lose those non-elite votes in elections.
      ( YouTube: Lee Kuan Yew Interview – Hard Truths To Keep Singapore Going- Hot buttons Topics )
      Please see at 28 min 30 second EXACTLY what he said.

      Since social welfare programs are associated with the non-elites and the poor.
      So then is it fair to say that there will be very little improvement of social services for the non-elites and the poor under a PAP government?
      So if you want a more caring & sharing type of Singapore, you will have to vote for a regime change – Is this the hard truth?

      And if you are poor or a non-elite … you got to be stupid to vote PAP …. since PAP has openly declared that they are not interested in helping you.
      Is this also another hard truth?

  7. Pingback: Daily SG: 10 Jul 2014 | The Singapore Daily
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  9. Minsck

    I think you should go and read up a bit more before you write… Much of what you mention has already been gone through before.

    As for engaging honestly, are you doing the same? Are you misrepresenting what was said in Parliament, leaving out parts of what was said, and cherry-picking specific points to argue against? Have you considered the entirety of the content of the speeches given, or are you just attacking a straw man? Your commentary isn’t very convincing otherwise…

    Finally, what would happen without the CPF? What would be the possible implications without such a fund?

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